My Trading Game Plan Revealed - 10/09/2025: S&P at Crossroads as AI Co

Good morning and welcome to your daily deep dive into the markets. In this morning's My Trading Game Plan, Gareth Soloway, Chief Market Strategist at Verified Investing, navigated a complex tapestry of market signals. While one bearish indicator on the S&P 500 has failed, the index is now pressing against a formidable wall of multi-year resistance. At the same time, silver is making history, surging past a price level not seen in decades, while startling new data reveals just how narrowly focused this bull market truly is. Today, we'll unpack these critical themes, exploring the technical battleground, the concentration risk in the AI trade, and the key levels that could define the market's direction into year-end.

The S&P 500 at a Generational Crossroads

The market is a game of probabilities, where signals appear, strengthen, and sometimes fail. Yesterday, we witnessed the failure of a key bearish signal: the topping tail that formed on the S&P 500 last Friday. A close above the high of that candle has negated its immediate reversal power. However, this doesn't give the bulls a clear path forward. Instead, it pushes the index directly into a far more significant zone of resistance.

As Gareth detailed, two major technical barriers are converging right at current prices. The first is a critical trendline that originates in October 2023 and has served as a precise line of resistance through multiple pullbacks this year. The second is a parallel channel drawn from the COVID lows in 2020, connecting the major pivot points of the last five years.

"We still have this trend line, which has been an epic trend line going back to 2023… In addition, take a look at this guys… we're going to go all the way back to the COVID low in 2020."

These two lines create a confluence of resistance today between 6,772 and 6,775 on the S&P 500. This isn't just a minor level; it's a multi-faceted barrier with years of price history behind it. The market's reaction here will be pivotal. A firm rejection could send the index back down to test its lower support trendline. However, a confirmed close above this zone could ignite a powerful rally. As Gareth noted, "if we confirm above this multi-level faceted area on the S&P, that melt up can happen into year-end." This is the battle line that traders must watch.

The AI Economy: A Foundation of Glass?

While the S&P 500 tests its technical limits, a sobering report from a Morgan Stanley analyst sheds light on the incredibly narrow foundation supporting this market. The analysis revealed that over the last two years, the AI trade—comprising the "Magnificent Seven" and a handful of related software and data center companies—has been responsible for:

75% of all market gains
80% of all profits
90% of all capital expenditures in the S&P 500

These are staggering figures that paint a picture of extreme concentration. It suggests that without the AI boom, the broader economy and market would be nearly stagnant.

"The GDP of the U.S. would probably be like we'd probably be growing at like 0.5% or 0.3% if it wasn't for the AI trade, which now has has GDP in the U.S. at 3.8%. I mean, that's a huge difference. So the AI trade is the economy."

This hyper-concentration creates immense systemic risk. The market's health is tethered to a single narrative. If anything were to damage the psychology or fundamentals of the AI bull run, the ripple effects could be devastating. This sentiment was echoed by Jamie Dimon, who again warned that markets are on "shaky ground" due to high valuations. This fragility is visible when you compare the high-flying AI stocks with established, profitable companies in other sectors. Names like Pfizer, Pepsi, and Dr. Pepper are trading near 52-week lows, completely left behind by the AI frenzy. This bifurcation is a classic hallmark of a market bubble, reminiscent of the dot-com era of 1999-2000.

Silver's Historic Breakout Meets a Wall of History

Away from the equity markets, a monumental move is taking place in precious metals. This morning, silver breached the psychologically significant $50.00 USD level, hitting new all-time highs. While this is a powerful bullish breakout, it's also running directly into a technical resistance level with over 40 years of history.

Gareth highlighted a simple yet profound trendline on the long-term silver chart, connecting the high from 1980 with the high from 2011. Today, that line sits just above $50.00 USD, precisely where the price is hitting resistance.

"Beautiful trend line, the high from 1980, the high from 2011, we connect those simple, simple, right? Keep it simple… And that gives us this level."

Adding to the case for a near-term pullback is the fact that silver has rallied for eight consecutive weeks, a sign of an extended, overbought condition. This combination of a multi-decade resistance line and an overstretched rally creates a high-probability setup for a short-term reversal or consolidation. While Gareth remains bullish on silver long-term with targets of $60.00 to $62.00 USD, he acted on this technical setup by initiating a short swing trade for a potential 5-10% pullback. This is a masterclass in separating long-term bias from short-term, probability-based trading opportunities.

Earnings Season Reveals a Divided Consumer

Earnings season is now underway, and early reports are reinforcing the theme of economic bifurcation. Delta Air Lines (DAL) reported strong numbers, with the CEO noting that their higher-end consumer base is traveling and spending robustly. The stock is now approaching a key double-top resistance at $64.00 USD.

In stark contrast, luxury carmaker Ferrari (RACE) plunged 13% after lowering its guidance. This is a fascinating development, suggesting that even at the highest end of the consumer spectrum, some cracks may be appearing. For traders, this sharp drop brings the stock down toward a potential day-trade support level at a double bottom between $390.00 and $395.00 USD.

Meanwhile, PepsiCo (PEP) delivered a solid report, beating on both revenue and earnings. The market's reaction? A collective shrug. The stock is trading flat, languishing near 52-week lows. This illustrates the market's current obsession. As Gareth joked, "if Pepsi came out in the conference call today and was like, 'Oh, we're incorporating AI into our brands or whatever,' the stock would be up like 40% today." This stark contrast between the market's reaction to solid fundamentals versus a compelling narrative is a defining feature of the current environment.

Watching the Momentum Leaders for Clues

In a market driven by a narrow group of leaders, it's crucial to watch the most speculative, high-momentum names for signs of exhaustion. Yesterday, despite a strong rally in the Nasdaq, several of these darlings showed signs of distribution and selling pressure.

Robinhood (HOOD): After rallying back to a key parallel channel, the stock was firmly rejected. This level is now critical resistance to watch.
Rocket Labs (RKLB): This stock ran directly into a parallel trendline that Gareth had identified, where it was met with significant selling pressure, providing a profitable day trade short for members of the live trading room.
Rigetti (RGTI): This supercomputer play also showed weakness, finishing red on a day when the Nasdaq was up over 1%. This relative weakness suggests that large players may be using market strength to sell their positions.

When the hottest stocks can't rally with the broader market, it often serves as an early warning that risk appetite is beginning to wane. These are the "canaries in the coal mine" that traders should monitor closely for clues about the market's underlying health.

Conclusion: Trust the Charts, Not the Hype

In a market defined by conflicting signals, extreme concentration, and powerful narratives, the most reliable guide remains the price chart itself. Opinions about whether AI is a bubble or if silver is going to the moon are secondary to the objective reality of price action.

"Opinions are opinions versus charts are what they are. They're just price action. There's no narratives or bias."

The path forward is about following the levels. If the S&P 500 confirms a breakout above 6,775, the logical conclusion is to expect a continued melt-up. If silver is rejected from its multi-decade trendline, a pullback is the highest probability outcome. If AMD fails to confirm its breakout above the $227.00 USD double top, the breakout is considered false. This disciplined, stair-step approach, grounded in the critical concept of the confirmation signal, removes emotion and bias from the decision-making process. As we navigate the days ahead, this adherence to pure technical analysis will be the key to capitalizing on opportunities while managing the immense risks present in this historic market.