My Trading Game Plan Revealed - 10/16/2025: S&P Yellow Alert NVIDIA Save Gold Echoes 1980 Bitcoin at Risk

Good morning and welcome to your daily deep dive into the markets. Yesterday, traders were taken on a wild ride. After gapping sharply higher at the open, the S&P 500 experienced a stunning midday collapse, plummeting 114 points before staging a recovery to close slightly in the green. This volatility is a symptom of a market at a critical crossroads. In this morning’s My Trading Game Plan, Gareth Soloway, Chief Market Strategist at Verified Investing, broke down the key technical patterns that place the market in a precarious "warning zone," where the next move could determine the trend for weeks to come.

Today, we'll expand on that analysis, exploring the high-stakes drama on the NVIDIA chart, an incredible historical parallel in gold that echoes the 1980 market top, and the concerning weakness in Bitcoin that could be a canary in the coal mine for risk assets.

The Market's "Yellow Alert" Zone

The most important chart for the overall market right now is the S&P 500 daily chart, which is currently flashing a major warning signal. For weeks, the index has been grinding higher within a wedge pattern. Last Friday, it closed below the lower trendline of that pattern—a break, but not yet a confirmed breakdown. This distinction is crucial for disciplined traders. A break indicates vulnerability, but confirmation is required to signal a true trend change.

As Gareth explained, the market is now trapped in a state of limbo:

"Anything between here and here is a warning zone. It's a yellow alert, essentially a warning flag that the market is vulnerable, but it is not a confirmed breakdown yet. So while vulnerable, it's not like, oh my goodness, this market is done, right? We're not at that point."

This "yellow alert" zone is defined by two critical price levels. To the upside, a daily close above 6,710 would recapture the broken trendline, putting the market back in the "green flag of sideways chop where we can go up a little, down a little… and chop to the upside." This would negate the breakdown signal and suggest new all-time highs are possible. To the downside, a daily close below the recent low of 6,550 would provide confirmation of the breakdown. At that point, the probabilities would shift dramatically, signaling a potential market top is in place.

Adding to the complexity is a divergence with the tech-heavy NASDAQ 100. While the S&P 500 rallied back to test its broken trendline yesterday, the NASDAQ did not. This relative weakness suggests that leadership is fractured, a common characteristic of a market that is losing momentum. For the NASDAQ, a confirmed breakdown would occur on a close below the 589 level on the QQQ.

NVIDIA's Last-Second Save: A Lesson in Confirmation

Nowhere was the battle between bulls and bears more apparent yesterday than on the chart of NVIDIA. The action was, as Gareth described it, a "remarkable display" of the power of confirmation levels and the awareness of institutional players.

Two days ago, NVIDIA closed below a major long-term wedge pattern. This put the stock on high alert for a confirmed breakdown. Yesterday, the stock initially gapped up, looking as if it might immediately negate the bearish signal. Then, the midday market sell-off hit, and NVIDIA plunged to a low of $177.35 USD, well below the confirmation level. A breakdown seemed imminent.

But in the final moments of the trading day, a surge of buying pressure emerged, pushing the stock just high enough to close above the critical confirmation point. It was a photo finish that saved the chart from a technical breakdown.

"Look, here's your low from the previous day right here, and just at the end of the day, they closed it back above. I mean, that is, if you're a technician like me, that's just like, holy cow. Like talk about being saved by the skinny of its chinny chin chin or whatever you want to say here."

This event provides two invaluable lessons. First, it underscores the principle that "price is truth." It doesn't matter why the stock was saved; all that matters is where it closed. Since it did not confirm the breakdown, the bearish signal remains unvalidated. Second, it reveals that large institutions are acutely aware of these technical levels. The precise defense of this level was likely not a coincidence; it was a calculated move to prevent a cascade of sell orders that a confirmed breakdown would have triggered. Today, on the back of strong earnings from Taiwan Semiconductor, NVIDIA is trading higher, a direct result of yesterday's last-second save.

Gold's Astonishing Echo of the 1980 Peak

While equity markets are caught in a state of indecision, the gold market is providing one of the most fascinating technical studies in recent memory. After confirming a breakout from a parallel channel, gold has continued its powerful ascent, currently trading around $4,247 USD. The rally has now reached a logical target based on a "measured move"—a technical concept where the length of the initial rally leg is projected from the end of a consolidation phase to forecast the next target.

But a deeper dive into the charts reveals something far more compelling. Gareth, a student of market history, identified a stunning parallel between gold's current price action and its historic run-up into the 1980 peak.

"You want to see something cool? Up move, consolidation, up move. Up move in 1970, 70s, consolidation, up move. It's virtually repeating the 1970s move."

The structural similarity is uncanny. Both periods feature a powerful initial surge, followed by a period of sideways consolidation (a bull flag), and then a final, explosive leg higher. The parallel becomes even more striking when analyzing the weekly candles. The final leg of the rally in late 1979 consisted of nine consecutive positive weekly candles. The tenth week gapped higher before reversing violently, creating a massive engulfing candle that marked the cycle top for decades.

Incredibly, gold is currently on its ninth consecutive week up. This doesn't guarantee a similar reversal next week, but the symmetry is too precise to ignore. It suggests that, while the long-term bull market in gold may be far from over due to persistent inflation and government spending, a significant pullback could be imminent. This historical fractal serves as a powerful reminder that human psychology—the driving force behind market patterns—remains unchanged over time.

The Curious Case of Bitcoin's Weakness

As equities and precious metals capture the headlines, a concerning divergence is developing in the cryptocurrency space. While the stock market managed a decent bounce off last Friday's lows, Bitcoin "can't get off the floor." The digital asset has been repeatedly testing major support around the $110,000 USD level without generating any meaningful upward momentum.

This persistent testing of a key support level is a major technical red flag. As Gareth noted, "in technical analysis, the more you hit the line, the weaker it becomes." In the last seven trading days, price has touched this critical support line on six separate occasions. While the level has held thus far, each test chips away at the wall of buy orders, making it more vulnerable to an eventual break.

The concern is what happens if the stock market, which is already in a "yellow alert" zone, experiences another wave of selling. Last Friday, Bitcoin dropped in lockstep with equities. If that correlation holds, another down day in the S&P 500 could be the catalyst that finally breaks Bitcoin's support. A confirmed break of $110,000 USD would open the door to a swift decline, with an initial target around $98,000 USD and a more significant target zone between $94,000 and $95,000 USD.

Intermarket Signals and the Search for Clarity

The beauty of technical analysis lies in its ability to provide clear, objective levels that cut through the market noise. Whether it's a bull or bear pattern, a properly drawn chart tells you exactly where the thesis is validated and where it fails. This provides a roadmap for navigating uncertain times.

Beyond individual charts, the broader intermarket picture is also providing clues. The 10-year Treasury yield continues to look weak and is on the verge of confirming a breakdown on its weekly chart. A move lower in yields is often associated with a "flight to safety," where investors sell riskier assets like stocks and pile into the perceived safety of government bonds. This potential signal of rising fear aligns with the precarious position of the equity markets.

Meanwhile, other individual stocks are offering specific, planned trading opportunities. J.B. Hunt, a major transportation stock, is rallying on strong earnings, but it is approaching a multi-pivot resistance zone between $163 and $165 USD, which could present a tactical shorting opportunity for day traders. Taiwan Semiconductor, despite its strong report, is also nearing a key trendline around $315 USD that could serve as initial resistance.

Conclusion: A Time for Discipline and Patience

The market is sending a clear message: proceed with caution. The S&P 500 is in a technical no-man's-land, vulnerable to a breakdown but not yet confirmed. The dramatic save in NVIDIA highlights the intense battle being waged at critical technical levels. The historical parallel in gold suggests a major inflection point is near, while the persistent weakness in Bitcoin serves as a potential warning for all risk assets.

In this environment, discipline is paramount. The key is to wait for confirmation. Avoid jumping the gun on a breakdown that hasn't happened, but also respect the warning signs the market is giving. By identifying the precise levels that define the bull and bear case—6,710 and 6,550 on the S&P 500—traders can create a clear game plan and react logically, not emotionally, to whatever comes next. The watch continues.