My Trading Game Plan Revealed - 10/17/2025: Markets on a Knife's Edge S&P 6550 NVIDIA Risk Bond Breakdown

The market is on a knife's edge. Fears of a burgeoning banking crisis are accelerating, with two more banks revealing major losses just a day after Jamie Dimon warned, "where there's one cockroach, there's many." This unexpected risk, something not on most traders' "bingo card," sent markets tumbling yesterday. While an overnight tweet from Donald Trump regarding Chinese tariffs sparked a pre-market rally back to the flatline, the underlying technical picture remains precarious.

In this morning's My Trading Game Plan, Gareth Soloway, Chief Market Strategist at Verified Investing, cut through the noise to reveal the critical chart patterns that are holding the market's fate in their balance. From unconfirmed breakdowns in major indices to historical parallels in the gold market, a clear, probability-based roadmap is emerging for those who know where to look.

The S&P 500: Broken, But Not Confirmed

For months, a well-defined wedge pattern has governed the S&P 500, providing clear boundaries of support and resistance. Last Friday, the market experienced a significant technical event: a massive red candle that broke below the lower boundary of this pattern. While this breakdown caused significant technical damage, it's crucial to understand the distinction between a break and a confirmed breakdown.

As Gareth explained, rushing to act on an initial break is a classic trap that ensnares inexperienced traders. “How many times have we all been in this situation where we're like, oh, it's going to break down. Let me exit my longs, maybe short the market or short the stock. And then what happens? It goes right back up. And before you know it, we're just rallying back up. And essentially, you get faked out.”

To avoid these costly fakeouts, professional traders rely on a confirmation signal. For this breakdown to be confirmed, the S&P 500 needs a daily close below the low of that initial breakdown candle, which sits at 6,550. Until that happens, the market is in what Gareth calls a "warning zone." This doesn't signal an imminent collapse, but it demands heightened alertness and risk management.

Currently, the price action is telling a compelling story. For the past three days, the S&P has rallied back to the broken trendline, hammering on its "underbelly." This former support is now acting as minor resistance, and a bearish flag pattern appears to be forming just below it. Should the market fail to reclaim the trendline and instead break below 6,550, the confirmation would be locked in, dramatically increasing the odds of a major market top. In that scenario, the next major target to the downside would be around the 6,100 level.

The 75-80% Edge: Why Confirmation is King

The discipline of waiting for confirmation isn't just about avoiding frustration; it's a core principle of probability-based trading. It fundamentally shifts the odds in a trader's favor, moving them from a gambler's coin flip to a casino's statistical edge.

“The idea behind confirmation is once you get a confirmed breakdown or breakout, the odds of it being successful in that direction go up to about 75 to 80%,” Gareth noted. This is a monumental advantage in an environment defined by uncertainty. By waiting for that second signal—the close below the low—a trader is filtering out the noise and acting only when the market provides a higher-probability setup.

This same principle applies across the market. The tech-heavy Nasdaq 100 (QQQ) ETF exhibits a nearly identical pattern to the S&P 500. It too has broken its uptrend line from the April 7th lows but has yet to confirm the breakdown by closing below the low of its own breakdown candle. This synchronized posture across major indices underscores the market-wide significance of the current technical juncture. The entire market is holding its breath, waiting for either a confirmation of weakness or a powerful reclaim of the broken trend.

An Ominous Signal from the Bond Market

While equity markets hover in an unconfirmed state, the 10-year Treasury yield is sending a much clearer—and more concerning—signal. Looking at the weekly chart, the 10-year yield has decisively broken and closed below a critical multi-year trendline connecting the lows of 2022, 2024, and early 2025. This is a confirmed breakdown.

Conventional wisdom might suggest that falling yields are bullish for stocks, as they imply lower borrowing costs. However, in the current context, the opposite is likely true. A sharp, confirmed breakdown in yields isn't happening in a vacuum; it's occurring alongside rising fears of a banking crisis. This suggests the bond market is pricing in a significantly weaker U.S. economy.

As Gareth articulated, a weakening economy translates to weaker consumer spending, which in turn leads to falling corporate profits. While the AI capital expenditure boom may provide a partial buffer, it cannot indefinitely shield the market from a broad-based economic slowdown. Therefore, this breakdown in yields should be viewed not as a tailwind, but as a major warning sign that the economic foundation supporting the stock market is beginning to crack. The likely trajectory for yields is now lower, towards a range of 3.3% to 3.6%.

NVIDIA: The Market's $4.5 Trillion Linchpin

No single stock is more important to the current market structure than NVIDIA. Its chart is a masterclass in technical analysis. A long-term trendline drawn from the 2021 bull market high perfectly pinpointed the stock's recent peak, demonstrating how historical levels can dictate future price action with uncanny precision. This is the essence of trading with a plan rather than just guessing. “At least you have factors that give you the odds in your favor, like a casino versus the gambler,” Gareth emphasized.

Like the broader indices, NVIDIA has also broken below its key uptrend line from the April lows. The situation is incredibly tense. Just two days ago, the stock was on the verge of confirming its breakdown, only to be saved by a surge of buying volume in the final three minutes of the trading day. This last-second rescue highlights the fragility of its position.

A confirmed breakdown in NVIDIA would be a seismic event for the market. With a market cap of $4.5 trillion, representing roughly 10% of the S&P 500 and 15% of the Nasdaq 100, its fall would create a gravitational pull that would be difficult for the rest of the market to resist.

However, there is a crucial nuance to consider. The broader semiconductor ETF (SMH) is not in the same precarious position. While it shares a similar chart formation, it is not yet close to its lower trendline. This indicates that while the leader, NVIDIA, is faltering, the rest of the semiconductor army (like AMD and Micron) is still holding strong near all-time highs. For a true market panic to set in, we would need to see this broader weakness spread, with the SMH beginning to break down as well.

Gold's 1979 Echo: History as a Guide

Shifting to the commodities space, the chart of gold is revealing a fascinating historical parallel. The current surge in gold in 2025 bears a striking resemblance to the iconic bull run of 1979-1980. Both periods, when viewed on a weekly timeframe, show an initial surge, a period of consolidation, and then a climactic blow-off top that lasted for exactly nine consecutive weeks.

Why do charts replicate patterns from over four decades ago? “Charts are made up of people, right? People buying and selling, essentially greed and fear… human nature doesn't change,” Gareth explained. The same emotions that drove the market in 1979 are driving it today. Anecdotal reports of lines forming around the block in Australia to buy physical gold bars further support the idea that we are reaching a point of short-term speculative fever.

If human nature doesn't change, then the subsequent price action might also rhyme. After the nine-week surge in 1980, gold experienced a major correction, pulling back to the price level of its prior breakout high. Applying this historical precedent to today's chart provides a logical target for a potential pullback. The previous high suggests a buy zone for gold could emerge on a flush-out down to the $3,500 USD per ounce area. While Gareth remains a long-term gold bull, this technical and historical analysis points to a healthy 10-15% correction before the next major leg up.

Bitcoin's Breakdown and the De-Risking Signal

As a leading indicator for risk appetite, Bitcoin's price action demands close attention. The digital asset is currently at risk of confirming its own major breakdown below a key trendline. A confirmed close below this level would signal that investors are actively de-risking their portfolios.

“If this is dumping out like this, what does it tell us about the mentality, the psychology of retail investors or any investors? It says they're de-risking,” Gareth stated. This is a significant red flag for the equity markets. If the most speculative end of the risk spectrum is seeing a flight to safety, it's highly probable that this sentiment will bleed over into stocks.

A confirmed breakdown in Bitcoin would open the door to a downside move toward the $95,000 to $98,000 USD support zone. Furthermore, the former support level around $110,000 USD would flip to become a major ceiling of resistance on any subsequent bounces.

Conclusion: Navigating the Warning Zone

The market has entered a period of heightened risk and uncertainty. The major indices are in a fragile "warning zone," having broken key support but not yet confirmed a major top. The confirmed breakdown in the 10-year yield and the precarious position of market-leader NVIDIA are flashing serious warning signs, while Bitcoin's weakness suggests a broader de-risking is underway.

In this environment, discipline is paramount. The key levels—6,550 on the S&P 500, NVIDIA's breakdown low, and Bitcoin's confirmation point—are the lines in the sand. By waiting for the charts to provide clear, confirmed signals, traders can navigate this treacherous landscape with a statistical edge, relying on probabilities over hype and narratives. The coming days will be critical in determining whether the market can avert a deeper correction or if these initial cracks will widen into a significant decline.