My Trading Game Plan Revealed - 08/31/2026: Oil Near $86 Yields Surge and S&P Megaphone Signals Market Risk

Renewed fighting between the U.S. and Iran pushed crude oil sharply higher Monday morning, while markets continued digesting Federal Reserve Chair Kevin Warsh's hawkish message from Jackson Hole.

Those are significant headlines. They are not, by themselves, trading signals.

In Monday's My Trading Game Plan Revealed, Gareth Soloway focused instead on what price would have to do to turn those headlines into something more consequential. Oil is pressing resistance. The 10-year Treasury yield is approaching another major threshold. The S&P 500 remains inside a broadening pattern despite the growing macro pressure.

The question across all three is the same: does price confirm the concern?

Oil Is Testing the Level That Could Change the Inflation Conversation

West Texas Intermediate crude pushed above $86 Monday morning after renewed military action between the U.S. and Iran.

That makes the geopolitical backdrop difficult to ignore. Gareth's chart, however, shows why the move still needs confirmation.

Oil has pushed into a wedge boundary defined by prior pivot points, but it was already pulling back from its initial move higher during the morning session.

"While oil is testing the line here, look at how we were up more and we are already starting to pull back," Gareth said. "Essentially, price is being kept at least for now under or at resistance."

That distinction matters because a test of resistance is not the same thing as a breakout.

If crude cannot establish itself above the upper boundary, Gareth sees the possibility of continued back-and-forth trade, broadly between the mid-$70s and mid-$80s. A confirmed breakout would be more consequential.

Oil feeds directly into the inflation discussion through transportation, manufacturing and other input costs. With the Federal Reserve already focused on inflation remaining above target, sustained energy strength could make the path for interest rates more difficult.

For now, $86 is less important as a number than as a confirmation point.

The 10-Year Yield May Be the Bigger Threat

The more important macro chart may be the 10-year Treasury yield.

The yield pushed above 4.7%, reaching its highest level in roughly a year. Gareth has an additional resistance area around 4.8%. Above that, the 5% level that marked the 2023 peak comes back into view.

"At some point, rates at high levels will break the stock market," Gareth said. "You can have all the great earnings that we've had. You can have the capex spending by these hyperscalers and these AI plays that's just been absolutely enormous. But if rates keep going up, eventually it breaks something."

That does not mean 4.7% automatically produces an equity selloff.

It does mean the market has less room to ignore higher borrowing costs if yields continue climbing.

Higher rates increase financing costs, make refinancing more expensive and raise the discount rate applied to future corporate earnings. That becomes particularly important for a market carrying elevated valuations in many of its largest growth stocks.

Warsh's Jackson Hole remarks added another layer to that pressure. Expectations for a September rate increase climbed sharply following the speech, putting even more attention on the economic data arriving before the Federal Reserve's September 16 decision.

The chart gives traders a simple progression to watch: 4.7%, then roughly 4.8%, with 5% becoming much more relevant if resistance continues to break.

The S&P 500 Still Has Not Broken

What makes the setup more interesting is that equities have remained relatively resilient.

Despite higher oil, higher yields and another geopolitical escalation, the S&P 500 remains close to its highs.

Gareth continues to track a megaphone, or broadening, formation on the daily chart. Unlike a wedge, where the trend lines converge, the boundaries of a megaphone move farther apart as volatility expands.

The S&P is currently trading between those boundaries.

That leaves plenty of room for alarming headlines without necessarily producing a technical break.

As long as the index remains inside the structure, Gareth's read stays broadly neutral to slightly bullish. A breakout through the upper boundary would strengthen the bullish case and could eventually open the door toward his 8,200 technical target.

A break of the lower boundary would tell a very different story and create the possibility of substantially deeper downside.

Neither has happened yet.

That is why the S&P chart is useful here. While the macro backdrop has become more uncomfortable, price has not yet confirmed that conditions have deteriorated enough to break the larger structure.

The Dollar Returned to the "Scene of the Crime"

The U.S. Dollar Index is providing another test of the market's reaction to Warsh.

The dollar surged following his Jackson Hole speech, then pulled back Monday morning toward a previously broken trend line.

Gareth calls this type of retest a return to the "scene of the crime."

The concept is straightforward. Support breaks, price moves below it, and the same level can become resistance when price returns from underneath.

That is what Gareth is watching now.

He also pointed to the way the dollar weakened along the trend line before the original break.

"When you get a bear flag, notice how this move was not vertical," he said. "It was basically hugging the line or weakening the line."

His analogy was a woodpecker repeatedly striking the same spot. Each test can weaken the level until support finally gives way.

Now the dollar is testing that area from the opposite side.

A rejection would reinforce the breakdown. A reclaim would force a reassessment.

Again, confirmation matters more than the initial move.

PCG and EIX Show Why Time Frame Changes the Trade

The selloff in California utilities provided one of the morning's clearest examples of why a technically attractive price does not automatically make something a swing trade.

Pacific Gas and Electric and Edison International were both under heavy selling pressure Monday morning following regulatory developments affecting the state's utilities.

On PCG, Gareth is watching approximately $13 as the first important technical area. Below that, $12.50 becomes the next level.

EIX is moving toward a gap-fill area around $55.76. Additional support sits near $52, followed by a larger double-bottom zone around $48.

Those levels may create potential short-term reaction areas.

Gareth was much more cautious about extrapolating that into a longer-term position.

"On a swing trade basis, I've got to let the dust settle," he said. "I've got to see where this all pans out, like what type of impact does it have on these companies."

That is an important distinction.

A day trader can sometimes trade a technically stretched move without needing to resolve every fundamental question surrounding the company. A swing trade requires more confidence that the underlying situation will not continue deteriorating while the position is held.

The same chart can therefore produce two very different decisions depending on the time frame.

NVIDIA's Earnings Reaction Is More Important Than the Earnings Headline

NVIDIA presents a similar lesson from the opposite direction.

The company delivered strong earnings and guidance, yet the stock was unable to hold most of its initial gains.

That reaction caught Gareth's attention.

When positive news produces weak price action, the failure itself becomes information. It suggests buyers may already have incorporated much of the good news into the stock or that investors are questioning some part of the forward outlook.

One issue receiving increasing attention is NVIDIA's investment activity across the broader AI ecosystem and whether financing relationships with customers and partners are affecting how investors evaluate future demand.

The chart remains the cleaner decision point.

NVIDIA is sitting between significant trend lines, with ascending support underneath the stock. A successful test could keep the larger structure intact. A clean break would expose lower levels and potentially begin filling prior gaps.

The important signal is not that NVIDIA reported good numbers.

It is what the stock did after receiving them.

Gold Gets Its First Test at $4,400

Gold has now reached an area Gareth identified ahead of the move.

After pulling back, the metal tested ascending trend-line support around $4,400.

"This is your first test as a bull at $4,400. Can price hold?" Gareth said.

That creates a straightforward technical sequence.

If $4,400 holds, the existing structure remains intact. If it fails, Gareth is watching approximately $4,330 next, followed by a larger support area around $4,150.

Silver offered another example of the same process after reaching Gareth's resistance area Friday and reversing.

The usefulness of those levels is not that every one will hold. It is that they establish where the chart should prove or invalidate the thesis before the move occurs.

Bitcoin's Bear Flag Could Put $67,000 Back in Play

Bitcoin is developing a different setup.

Following last week's sharp reversal, Gareth sees the early stages of a potential bear flag. Price is consolidating after the decline rather than immediately reclaiming the move.

A break lower would keep the bearish short-term structure intact.

Instead of treating that possibility purely as a negative, Gareth is already mapping where a larger decline would become technically interesting.

His major level sits around $67,000.

"I'm going to eye $67,000 as a huge buying opportunity," Gareth said. "That would be a retrace to a big pivot point where when you broke out, this is really when the momentum got crazy."

That level corresponds with an important prior breakout area and would represent a much deeper retracement from current prices.

Bitcoin does not have to get there.

The point is to define the level before emotion enters the trade.

The Headlines Are Getting Louder. The Levels Are Getting More Important.

Monday's market opened with plenty of reasons for investors to react.

The U.S. and Iran exchanged strikes. Oil moved above $86. The 10-year remained near 4.7%. Markets are reconsidering the possibility of another Federal Reserve rate increase.

Yet several of the most important charts are still testing rather than breaking.

Oil is at resistance. The S&P remains inside its megaphone. The dollar is retesting broken support. Gold is sitting on its first major support level. Bitcoin has not yet confirmed its bear flag.

That leaves the market at an unusually useful point.

The macro risks are visible, but many of the charts have not yet confirmed them.

For Gareth, that means there is little reason to anticipate the break. Define the level, see how price behaves when it gets there, and let confirmation determine what comes next.