My Trading Game Plan Revealed - 02/04/2026: Markets Break Down, Nasdaq Eyes 20,000, AMD Gap Fill, Bitcoin Short-Term Bounce

The markets are teetering on a precipice. Following a massive sell-off yesterday that saw the Nasdaq shed 1.5% and the S&P 500 drop roughly 1%, investors are waking up to a flat open and a deluge of mixed economic signals. In this morning's My Trading Game Plan show, Gareth Soloway, Chief Market Strategist at Verified Investing, dissected the critical technical breakdowns occurring in the major indices and provided a roadmap for navigating an environment where liquidity is drying up and inflation is rearing its head again.

The Macro Paradox: Stagnation Meets Inflation

Before diving into the charts, it is crucial to understand the economic backdrop driving price action. This morning, the ADP private sector data revealed a gain of only 22,000 jobs in January—a number that missed expectations and signals virtually zero growth in the labor market. While we aren't seeing mass layoffs yet, the engine of job creation has stalled. Complicating matters, the official non-farm payrolls report due Friday will be delayed until early next week due to the short government shutdown.

This labor weakness is occurring simultaneously with a resurgence in inflation signals. Oil prices are up 10-15%, and we are seeing surges in commodities ranging from silver and platinum to live cattle. This creates a nightmare scenario for the Federal Reserve.

As Gareth noted, the economy's apparent strength via GDP numbers is largely an illusion fueled by massive AI infrastructure spending:

"If you took out that CapEx from the names of Meta, Microsoft, Nvidia, I mean, all of these players, the economy would probably be flat like the jobs in the labor market. That's just the honest answer to it."

With inflation ticking up and the economy flatlining, the Fed—and potentially new nominee Kevin Worsch—will be handcuffed. The market's hope for aggressive rate cuts is colliding with the reality of sticky inflation, a dynamic that the 10-year Treasury yield is already pricing in. The 10-year chart shows a classic bull flag pattern: a strong move up, a consolidation phase, and now a breakout that suggests yields are heading higher. This is a recipe for a more significant market decline in 2026 than many are currently prepared for.

Indices at the Breaking Point

The technical picture for the major indices has shifted from bullish consolidation to a confirmed breakdown. The S&P 500 is currently sitting at a pivotal junction, but the charts are signaling that the path of least resistance is now to the downside.

The key technical feature is the trendline extending back to the lows of April 2025. For months, the market respected this line—hitting it, bouncing, and hitting it again. However, that line has now broken. The market recently retraced to test the breakdown point (the "scene of the crime") and is now rolling over.

The Nasdaq's Downside Targets

The Nasdaq Composite shows an even more precarious setup. Having broken its similar trendline support, the index is facing a potential liquidity crunch. We are already seeing software stocks like Roblox and Oracle suffer epic collapses, signaling that institutional money is de-risking.

Gareth laid out specific downside targets for the Nasdaq based on this technical breakdown:

1. Short-Term Target: A move down to approximately 22,000. This represents the near-term pivot low and is likely to occur within the next couple of weeks.
2. Mid-Term Target: A more severe decline to roughly 20,000.

Considering the Nasdaq's highs were around 24,000, a move to 20,000 would represent a massive percentage drop. This isn't about panic; it is about probability. When a major trendline that has held for nearly a year breaks, the probabilities shift heavily in favor of the bears.

Semiconductor Volatility: AMD and The Trap of Greed

Earnings season continues to provide volatility, particularly in the semiconductor space. AMD reported earnings that the market has rejected violently, with the stock down over 10% to trade around $218.

For traders, this volatility creates opportunity, provided one knows exactly where the institutional support lies. Gareth identified two distinct levels for AMD, distinguishing between a quick day trade and a longer-term swing position.

The Day Trade Setup

The first level of interest for a potential bounce is at $208. This level coincides with an "underbelly" of support from previous price action. At $208, multiple technical factors align to suggest a temporary reprieve from the selling, making it a viable level for intraday traders.

The Swing Trade Setup

For those looking to hold a position for weeks or months, the chart suggests patience is required. There is a massive gap fill waiting at significantly lower levels.

"Based on that, see this huge gap in here… When gaps are filled, that usually signals a significant bounce, especially the bigger the gap, the bigger the support essentially. So what we're going to look for here on a swing trade basis, gap fill at $164."

This analysis highlights the discipline required in trading. While a drop to $208 is significant, a drop to the gap fill at $164 offers a much higher probability for a sustained reversal.

The Warning in Sandisk (SNDK)

Conversely, stocks like Sandisk (SNDK) serve as a warning against chasing momentum. Despite being down about 4% today, the stock remains incredibly extended. Gareth drew a parallel between Sandisk and the recent price action in silver. When fundamentals give way to pure momentum and greed, the eventual correction is rarely shallow. Investors should be prepared for potential drops of 10% to 40% from peak to trough when the "weak hands" are finally flushed out.

Strategic Earnings Plays: Novo Nordisk and Chipotle

Beyond chips, other major names are reacting to earnings, creating specific technical setups.

Novo Nordisk (NVO)

Novo Nordisk reported strong earnings, beating estimates with $1.00 per share versus the expected $0.90. However, fears of competition from Pfizer's emerging weight-loss data have pressured the stock.

This disconnect between strong earnings and a falling stock price often creates opportunity. The technicals reveal a robust support zone between $45 and $43. This area represents a confluence of a gap fill and a double bottom. If the stock pierces $45, it enters a high-probability buy zone for a trade, banking on the market overreacting to the competitive threat.

Chipotle (CMG)

Chipotle experienced an initial flush on earnings but has since stabilized. The daily chart reveals a specific level of interest at a pierce of $35. This level aligns with a small gap fill and a pivot high where the stock previously consolidated before breaking out. In trading, previous resistance often turns into support, making this $35 level a key area to watch for a reaction.

Bitcoin and Precious Metals: Counter-Intuitive Moves

The analysis of Bitcoin and precious metals highlights the importance of separating sentiment from technical reality.

Bitcoin's Contrarian Bounce

Bitcoin is showing weakness, yet it is holding a critical short-term support level at a pivot low. Furthermore, a trendline connecting previous highs cuts exactly through the recent low, providing a "two-factor" support zone.

Perhaps most importantly, sentiment in the crypto space has turned overwhelmingly bearish. As a contrarian indicator, extreme bearish sentiment often precedes a bounce.

"The worse it gets, the more I think we're due for a short term bull move in Bitcoin… I would not be surprised, and I am bullish, in the very short term for the next few days, on Bitcoin, unless we take out this key support level."

The technicals suggest a potential bounce back toward $85,000 to $86,000—a $10,000 move from current levels. However, traders must remain aware of the larger head-and-shoulders pattern developing, which poses a longer-term threat.

Gold and Silver: Selling the Bounce

Gold and silver are currently in the midst of a bounce that was predicted in previous shows. However, this bounce is likely a retracement within a new downtrend rather than a resumption of the bull market.

• Silver: The target for this bounce is the 50% to 61.8% Fibonacci retracement level, which sits between $96.50 and $102.50. Once silver enters this zone, the strategy flips back to bearish.
• Gold: Similarly, gold is approaching its 61.8% retracement level around $5,170.

The psychology here is vital: as these metals rally into resistance, bullish sentiment will likely return, trapping retail traders just as the charts signal a reversal back to the downside.

The Psychology of Discipline

Throughout the analysis of stocks like SMCI (Super Micro Computer), a core theme of successful trading emerged: the ability to do nothing.

SMCI is currently up 7-8%, but it sits in a "no trade" zone. It is not high enough to short (target: $46 swing or $39-$40 day trade breakdown), and it is not low enough to buy. For many traders, the urge to participate is overwhelming, leading to forced trades and losses.

"A good trader can sit on their dang hands and not force a trade. That's how you actually hold on to money versus most traders. They want the adrenaline. They're addicted to always being in a trade."

This discipline is what separates those who accumulate wealth from those who churn their accounts. Whether it is waiting for AMD to hit $164 or waiting for Natural Gas to hit a specific buy zone, the money is made in the waiting, not just the executing.

Conclusion: Probability Over Narrative

As we navigate the rest of this week, the message is clear: ignore the narratives and focus on the probabilities. The S&P 500 and Nasdaq have broken major trendlines, signaling a shift in market character. The labor market is stalling while inflation pressures mount, creating a difficult environment for the Fed.

However, within this volatility lie precise opportunities. Whether it is the gap fill on AMD, the support zone on Novo Nordisk, or the contrarian bounce in Bitcoin, the charts provide a roadmap. By adhering to strict technical levels and managing risk, traders can navigate the coming storms. The key is to remain humble, respect the charts, and execute only when the probabilities are heavily in your favor.