My Trading Game Plan Revealed - 10/10/2025: S&P Pressure Cooker, Dollar Breakout, and Confirmation Rules for Traders

The stock market is holding its breath. After weeks of grinding higher, the S&P 500 has been squeezed into an increasingly tight range, coiled like a spring and ready for a major move. As traders await clarity on everything from a potential government shutdown to the full impact of tariffs, the charts are providing the clearest roadmap. In this morning's My Trading Game Plan, Gareth Soloway, Chief Market Strategist at Verified Investing, cut through the noise to deliver a masterclass in technical analysis, revealing the critical levels that will likely dictate the market's direction into the end of the year.

From a multi-factor setup in the US Dollar to a perfect "retrace to the scene of the crime" in a blue-chip stock, today's analysis is packed with actionable insights and timeless trading wisdom.

The S&P 500's Pressure Cooker Moment

The daily chart of the S&P 500 is, as Gareth described it, "a thing of beauty." Price action is currently being compressed between two monumentally important trend lines. The first is an ascending line that dates back to the October 2023 lows. The second is a much larger parallel channel line connecting the COVID low, the 2021 bull market high, and the 2022 bear market low. These two lines are converging, creating a technical pressure cooker.

"Next week, I'm really cueing in on this as these lines tighten more and more, keeping the S&P in a tighter range, also winding it like a pressure cooker or spring for a major move when we break out or we break down."

This isn't just random chart-watching; it's about identifying a critical inflection point. The market is being forced to make a decision. A confirmed breakout above this compression zone could trigger a melt-up into the year's end, potentially adding another 5% to 10% for the quarter. Conversely, a breakdown below could open the floodgates to the downside. The lower trend line is approaching its seventh test, a significant number in cycle analysis, which increases the probability of a break if it is tested again.

For traders, this is a moment of clarity. The noise of daily headlines fades into the background. The only thing that matters is which side of this structure the market chooses. It’s a time for patience, not prediction, as the market prepares to reveal its next major directional move.

Stacking Factors: A Masterclass on the US Dollar

While the S&P 500 waits, the US Dollar Index (DXY) is providing a powerful lesson in high-probability trading. The DXY has just broken out of a classic inverse head and shoulders pattern, a bullish formation that suggests further strength ahead. But the real magic happens when we calculate the target and see how it aligns with other technical factors.

By measuring the distance from the bottom of the "head" to the neckline and projecting that distance from the breakout point, we get a target just below the 101 level. On its own, that's a useful piece of information. But as Gareth demonstrated, elite traders don't rely on single indicators. They stack factors to increase their odds of success.

"The more factors you can stack, the odds of your success go up. It's just common sense… What if you have a door and a brick wall behind that and another cement wall behind that? That's what factors are. You're stacking factors. You're thickening that resistance zone."

When we zoom out on the DXY chart, we find that the target of 100.9 coincides perfectly with a major historical pivot zone—an area that acted as support multiple times before breaking and turning into resistance. But there's more. A trend line connecting key recent lows also converges at that exact same price point.

This confluence of three distinct technical factors—a pattern target, historical price structure, and a trend line—transforms a simple price target into a formidable resistance zone. This is what separates professional analysis from amateur chart-gazing. It’s not about finding one reason for a trade; it’s about finding multiple, independent reasons that all point to the same conclusion.

This potential dollar strength is occurring against a backdrop of "de-dollarization," a long-term theme where countries are diversifying away from US assets. For the first time in a very long time, central banks are holding more gold than US Treasuries, signaling a foundational shift. While this is a multi-decade process, the technicals suggest a final push higher for the dollar may be coming before a more significant, long-term decline could begin.

The Indispensable Role of Confirmation

One of the most crucial concepts in trading is confirmation. A stock may gap above a key level, but until it closes above the high of that breakout candle, the move is not confirmed and remains vulnerable to failure. This theme played out across multiple charts in today's analysis.

NVIDIA (NVDA): The AI giant used what Gareth calls the "River Theory" to overcome a stubborn resistance level by gapping above it. However, the stock printed a near-topping tail yesterday, a bearish reversal signal. The breakout is not yet a sure thing. For the move to be validated, NVIDIA must close above yesterday's high of $195.30. If it does, a move above $200 is likely, with a potential run toward a staggering $5 trillion valuation at approximately $205 per share. If it fails, the gap-up could be a "fake out."

Natural Gas: This chart provided a textbook example of non-confirmation. After rallying to a key trend line, natural gas failed to close above it. The result? A sharp reversal back to the downside. Traders who waited for confirmation were saved from a losing trade, while those who jumped the gun were trapped.

Gold: The yellow metal also teased a breakout yesterday but failed to confirm, resulting in a "massive flush" and a bearish reversal candle. The lesson is clear: breakouts are meaningless without confirmation. It is the single most important signal that separates a real move from a false one.

A Perfect Retrace: The Pfizer Case Study

In a market obsessed with high-flying AI stocks, it’s easy to overlook the opportunities in more traditional, value-oriented names. Pfizer (PFE) offered a stunning educational setup that highlights a powerful pattern for patient traders.

Last week, Pfizer broke out above two converging trend lines on positive news. Following this strong move, the stock has spent the last few days pulling back. This isn't a sign of weakness; it's a classic technical pattern Gareth calls a "retrace to the scene of the crime." Price is returning to test the former resistance level, which should now act as support.

But again, the analysis deepens when we stack the factors. By drawing a Fibonacci retracement from the beginning of the recent move to its peak, we see that the pullback has brought Pfizer directly to its 61.8% retracement level.

"Here's your six one eight yesterday. You came basically back to your .618 Fibonacci retrace on Pfizer. So not only did it retrace into the two trend lines, which were resistance and now act as support, but you also have your Fibonacci retrace."

This is a high-probability long setup. You have a retest of a breakout point combined with a key Fibonacci level. While Pfizer isn't an exciting AI play that will double overnight, it offers a nearly 7% dividend yield and a technically sound setup for potential price appreciation, making it an attractive safety hedge in an uncertain market.

The Stories Behind the Headlines: Tariffs and Trade Talks

Successful trading requires looking beyond the news and understanding the strategic motivations behind it. Two stocks discussed this morning, Levi's (LEVI) and Qualcomm (QCOM), perfectly illustrate this point.

Levi's stock suffered a significant breakdown after the company warned that tariff costs are beginning to hurt its business. This is a direct, tangible impact of macroeconomic policy on corporate earnings. For traders, the key is to ignore the panic and identify logical support levels. While an aggressive level exists around $21.15, a more probable support zone lies between $18.60 and the gap fill at $19.24.

Qualcomm, on the other hand, is a different story. News that China is curbing rare earth exports and investigating Qualcomm for monopolistic practices might seem alarming. However, Gareth explained that this is likely strategic posturing ahead of upcoming trade talks between the US and China.

"What is China doing? They're basically putting chips on the table… So now when we get to the bargaining table, we have these new chips to bargain with. I mean, that's really what it's about."

This is not about the fundamentals of Qualcomm. It's about geopolitics. By understanding the context, traders can avoid reacting emotionally to headlines that are designed to be bargaining tools, not genuine threats to a company's business model.

Conclusion: Clarity Through Charts

As we head into a pivotal week for the markets, the noise and uncertainty are palpable. Yet, the charts continue to provide a clear, unbiased roadmap. The S&P 500 is coiled for a major move, the US Dollar is executing a textbook pattern, and individual stocks and commodities are offering distinct, high-probability setups for those who know what to look for.

The key takeaways are universal: wait for confirmation, stack multiple technical factors to increase your odds, and understand the difference between market noise and actionable information. By adhering to these disciplined, probability-based principles, traders can navigate any market environment with confidence, ready to act decisively when the "pressure cooker" finally releases.