My Trading Game Plan Revealed - 02/02/2026: Contagion Risk From Gold, Silver, and Bitcoin Threatens S&P 500

Following a weekend characterized by extreme volatility in commodities and cryptocurrencies, markets opened Monday facing significant questions about risk appetite and potential contagion. In this morning’s My Trading Game Plan show, Gareth Soloway, Chief Market Strategist at VerifiedInvesting.com, broke down the chaotic price action that saw gold and silver collapse alongside a sharp drop in Bitcoin.

The central theme of today’s analysis is the concept of "contagion." When asset classes that have gone parabolic—driven by emotion and narrative—suddenly unwind, the selling pressure rarely stays contained. With the S&P 500 and Nasdaq hovering at precarious technical breakdown points, the critical question for the week ahead is whether the de-risking in metals and crypto will spill over into the broader equity markets.

The S&P 500: Retracing to the "Scene of the Crime"

The technical posture of the S&P 500 remains the primary concern for the broader economy. While the overnight futures market saw a sharp 1.4% drop before recovering, the daily chart reveals a structural weakness that cannot be ignored. The index has broken below a massive parallel trendline that dates back to the COVID lows—a five-year technical support level that has now been violated.

In technical analysis, when a major support level is broken, price often rallies back to test that level from the underside. Gareth refers to this as "retracing to the scene of the crime." The S&P 500 has done exactly this, bouncing back to test the breakdown point, where it is now facing resistance.

"But if you looked at 100 of these setups, about 70 of them have big moves to the downside. And so, again, it doesn't guarantee anything. Nothing in technical analysis is guaranteed. But probability-wise, it strongly favors the downside on the S&P."

This setup creates a high-probability bearish scenario. Unless the S&P 500 can reclaim and confirm a close above this multi-year trendline, the path of least resistance remains lower. A similar pattern is visible on the Nasdaq, which hit its trendline five times before breaking down and is now being pushed lower after a retest.

With Amazon and Alphabet set to report earnings this week, alongside critical jobs data, the bulls have a narrow window to negate this setup. However, history suggests that even positive news may be sold into if the technical damage is severe enough.

The Metals Crash: A Warning on Emotional Trading

The most dramatic action of the weekend occurred in the precious metals market. After a parabolic run-up fueled by narratives of currency debasement and "this time is different" thinking, reality struck hard. Gold collapsed to approximately $4,400 overnight, while Silver experienced a staggering 26% drop on Friday alone.

This flush-out serves as a potent reminder of the dangers of emotional trading. When an asset goes vertical, it detaches from its fundamental value and becomes a vehicle for speculation.

"It went from fundamental reasons why silver and gold were going up to then an emotional trade. Once it becomes emotional, then you're going to get a flush out at some point."

Technical Damage and Support Levels

Despite the carnage, the charts provided precise levels where buyers stepped in. Gold’s overnight low of $4,400 coincided perfectly with a trendline connecting highs from September 2025. This precision illustrates why charts often beat narratives—algorithms and institutional traders respect these levels regardless of the headlines.

However, the damage is substantial. The market has created a layer of "bag holders"—investors who bought at the top ($5,000+ for Gold, $115-$120 for Silver) and are now underwater. These investors typically look to exit at break-even, creating overhead supply that makes new all-time highs difficult to achieve in the near term.

For Silver, the critical level to watch is $71.35. A break below this support could open the door for a slide down to the $50-$55 range. For Gold, if the $4,400 level fails, the next major pivot low support sits at approximately $3,900.

Bitcoin and the Crypto Contagion

Bitcoin also participated in the weekend sell-off, dropping below $75,000 before staging a recovery to around $78,000. This move fulfilled the "bear flag" formation that Gareth had previously identified. When a bear flag triggers, it implies a measured move lower, which is exactly what played out.

The current price action in Bitcoin is testing a significant historical level. The overnight low tagged the exact breakout point from previous highs—a classic case of former resistance becoming support.

"Look at the low in the overnight, right to that level… So in the near-term, Bitcoin is now due for a bounce."

While a short-term bounce toward $80,000, $85,000, or even $90,000 is likely due to oversold conditions, the longer-term outlook for 2026 remains cautious. If the stock market undergoes the de-risking event suggested by the S&P 500’s technical breakdown, Bitcoin—as a risk asset—is likely to face continued headwinds.

This crypto volatility brings Coinbase into focus. The stock is approaching an interesting technical zone around $183-$187. While not a confirmed bottom, this area represents a potential swing trade opportunity if Bitcoin stabilizes and bounces as expected.

Macro Drivers: The Dollar, Yields, and Debt

The macroeconomic backdrop continues to exert pressure on risk assets. The U.S. Dollar has staged a significant bounce following the nomination of Kevin Warsh as the new Federal Reserve chairman. The Dollar Index is now approaching a critical resistance zone defined by the 50% to 61.8% Fibonacci retracement levels.

Simultaneously, the 10-year Treasury Yield is exhibiting a bullish technical pattern. Having broken out and retraced, the yield looks poised to head higher. This creates a difficult environment for equities, as higher yields typically compress valuation multiples, particularly for growth stocks.

Oracle’s Debt Surprise

In the corporate debt market, Oracle provided a fascinating case study in market expectations. The company announced it would raise $40 to $50 billion in debt to finance data centers. While a massive sum, the stock actually rallied on the news.

Why? Because the whisper numbers were significantly higher.

"We're all hearing $100 billion… I've heard $120 billion. Well, guess what? $40 to $50 billion is what they're doing right now. And that's less than the market was pricing in."

This "less bad than feared" reaction allowed Oracle to bounce. However, prudent investors should remain cautious. If the broader market corrects, Oracle has a major accumulation zone much lower, between $140 and $145, which aligns with long-term trendlines from the 2022 bear market lows.

Strategic Setups in a Volatile Market

Despite the overarching caution, volatility creates opportunities for disciplined traders who focus on specific levels rather than chasing momentum.

Disney (DIS)

Following its earnings report, Disney beat on earnings but missed slightly on revenue. The stock’s reaction was muted. For traders, the lack of a major gap or impulsive move makes it less attractive for immediate action. A more significant support level for a potential long position sits lower, around $101-$102, which coincides with gap windows and former pivots.

Roblox (RBLX)

Roblox has been in a sharp downtrend, exacerbated by news of Google introducing a competitor. However, the stock is bouncing today to the $67-$68 range. Approaching earnings, this beaten-down name is starting to look interesting for a potential mean-reversion trade, though timing is critical given the broader market weakness.

Oil and Natural Gas

Oil is pulling back today following de-escalation rhetoric regarding Iran and OPEC’s decision not to cut production further. The chart remains constructive, with a key support level to monitor at $61.75-$61.50.

Meanwhile, Natural Gas has seen a sharp reversal as weather forecasts shift warmer. Gareth noted a successful trade in KOLD (the inverse natural gas ETF), highlighting the importance of taking profits when a commodity moves too far, too fast due to temporary weather events.

The Psychology of Probability

A recurring theme in today’s analysis is the reliance on probability over certainty. Novice traders often look for guarantees, wanting to know exactly where a stock will go. Professionals, however, operate in terms of odds.

The current setup on the S&P 500—a break and retest of a 5-year trendline—has a historical failure rate of roughly 70%. This doesn't mean a crash is certain, but it means the smart money is positioning for downside.

"Once you get to the 70%, 75% odds, those are the trades I start to take… I'm looking for the high-percentage scenarios that can give me a high, high win rate."

This disciplined approach is essential when markets become "wild," as they did this weekend. By ignoring the hype and focusing on the charts, traders can identify when an emotional trade (like the recent metals rally) is about to unwind, and where the next logical support levels reside.

Conclusion: Watching for Contagion

As we move through this week, the intermarket relationships between commodities, crypto, and equities will be paramount. The collapse in Gold, Silver, and the drop in Bitcoin are "shots across the bow"—warning signs that liquidity and risk appetite are drying up.

The stock market has thus far remained resilient compared to these other assets, but the technicals suggest it may be next in line for a correction. With the S&P 500 sitting below its 5-year trendline and major earnings on deck, caution is the watchword.

"It's a matter of time before the contagion, think about a virus, it spreads from one thing to the next to the next. And that's my concern about the markets."

By maintaining strict discipline, respecting technical stop-losses, and waiting for price to reach high-probability levels, investors can navigate this period of heightened volatility and potential de-risking.