My Trading Game Plan Revealed - 11/07/2025: NVIDIA Breakdown Sparks Market Correction and Key Swing-Trade Levels

The markets took a sharp turn downwards yesterday, a freefall driven by mounting concerns over stretched valuations and the health of the U.S. economy. For weeks, a correction has been brewing, and now it appears to be accelerating. As futures point to another down day, traders are scrambling to make sense of the move and position themselves for what comes next.

In this morning's My Trading Game Plan, Gareth Soloway, Chief Market Strategist at Verified Investing, cut through the noise and laid out a clear, logical framework for navigating this volatile environment. The key, as always, lies in the charts—not the hype, not the fear, but the cold, hard data of price action and technical levels.

The Semiconductor Catalyst: NVIDIA at a Breaking Point

The primary culprit behind the market's sudden weakness is the semiconductor sector, which has been the engine of the bull market for nearly two years. Leading the charge lower is NVIDIA, a stock that just a week ago boasted a valuation north of $5 trillion USD. This morning, it’s trading at $185 USD, sitting precariously on a trend line that could determine the market's fate for weeks to come.

This isn't just any trend line. It connects a series of critical pivot lows, a level that has served as definitive support time and again. A daily close below this line would signal a technical breakdown of immense significance. As Gareth explained, this would be a profoundly negative development for the entire market.

"In the near term if we close below this level it's looking like a breakdown in NVIDIA which again even though it will have bounces along the way, this would be a very detrimental move for the overall markets."

Why is one stock's trend line so important? Because AI and chip stocks have accounted for over 75% of the S&P 500's upside over the past two years. When the market's primary driver begins to sputter and break key technical structures, it’s a clear warning that the broader trend is in jeopardy. The price action in NVIDIA isn't just a story about one company; it's a barometer for the entire risk-on sentiment that has defined this market cycle.

A Cautionary Tale: The Oracle Hype Cycle Evaporates

For a perfect illustration of how quickly market narratives can collapse in the face of technical reality, look no further than Oracle. Not long ago, the company announced monstrous earnings and a massive backlog, sending the stock soaring 40% in a single day. The hype was deafening, and bullish sentiment was off the charts.

But charts have a longer memory than headlines. Yesterday, Oracle’s stock quietly filled the entire gap created by that explosive earnings announcement, returning to the price level it occupied before the hype began.

"Whatever happened to that hype huh? …it literally yesterday filled the gap back to the levels where it was trading before that announcement came in. It's incredible folks and it's set to open below this trend line today."

This is a powerful lesson for every investor. Hype is fleeting, but technical levels are durable. For Oracle, the next key levels to watch are subsequent gap fills around $2.33 USD and a more significant one near $2.23 USD. While these levels may offer a short-term bounce opportunity for a disciplined swing trader, they underscore the danger of chasing parabolic moves fueled by narrative alone.

The Big Picture: Why This Correction Was Expected

The current market sell-off should not come as a surprise to those watching the bigger picture. The weekly chart of the S&P 500 has been flashing a major warning sign. A massive parallel channel, drawn from the 2020 COVID lows, the 2021 bull market highs, and the 2022 bear market lows, has perfectly defined the market's boundaries.

Last week, the market made a valiant attempt to break out above the upper boundary of this channel. It traded above the line for several days, but crucially, it failed to achieve a weekly close above it. That failure was the starting gun for the current correction.

"Right there I said, okay game on, let's do this, let's see a good correction in this market."

Now that the correction is underway, the most important tool a trader has is emotional discipline. The same greed that causes investors to buy at all-time highs can morph into a paralyzing fear on the way down. The key is to ignore both emotions and focus on the charts. The long-term target for this correction could eventually be the lower end of that parallel channel, but markets rarely move in a straight line. A more realistic near-term target for a significant bounce would be the area of the former all-time highs, around the 6,100 to 6,200 level on the S&P 500. This is where smart money will be looking to buy for a technical bounce, not to panic-sell.

The Million-Dollar Chart Pattern

Confirming the topping signal in the broader market is a specific, powerful pattern Gareth identified in the semiconductor index itself. This wasn't a random observation; it was the result of dedicated chart study—the kind of work that separates professionals from amateurs.

The pattern is simple yet profound. In 2024, the semiconductor index rallied exactly 102% above its weekly 200-moving average before succumbing to a major correction. Recently, the index once again hit that same 102% extension above the weekly 200 MA. The subsequent reversal has been swift and severe, suggesting a cycle high is in place.

"I study charts, not because I have to, but because I love to, because the potential for discovering something like this… can make me literally hundreds of thousands, if not millions of dollars."

This discovery highlights a crucial truth: the most profitable insights don't come from financial news networks or social media hype. They come from diligent, focused analysis of price charts. While the index is unlikely to fall straight down to its moving average—there will be bounces and pullbacks along the way—this pattern provides a clear roadmap for the sector's likely path over the coming months.

Cracks in the Consumer Foundation

While technicals are pointing down, the fundamental picture painted by recent earnings reports is equally concerning, particularly regarding the health of the American consumer. Outside of the AI darlings, earnings season has been brutal for companies that rely on consumer spending.

Names like Chipotle, DoorDash, CarMax (KMX), and Elf Beauty have seen their stocks plummet 20-30% after reporting. This isn't just a random collection of bad reports; it's a clear signal from the front lines of the economy.

"That's telling you something about the consumer. The consumer generally is hurting unless they're in that top one percentile of income."

This is a critical piece of the puzzle. The stock market's rise has created a wealth effect that has helped prop up spending, even among the affluent. As the market begins to correct, that wealth effect will evaporate, likely causing even the top-tier consumers to tighten their belts. This creates a negative feedback loop that could accelerate an economic slowdown.

A Swing Trader's Game Plan

In a corrective market, the strategy shifts from long-term investing to nimble swing trading. The goal is not to predict the ultimate bottom but to identify high-probability levels where beaten-down stocks can stage short-term bounces. Gareth laid out several key setups he is monitoring:

• Meta (META): A major trend line connecting the 2022 lows is fast approaching. The zone between $570 USD and $572 USD presents a compelling level to begin nibbling on a long position for a technical bounce.
• Microsoft (MSFT): Two key levels stand out. The first is a former pivot top at $467 USD, which should offer initial support. A more significant level lies below at $455 USD.
• Robinhood (HOOD): The stock has confirmed a breakdown from a parallel channel, opening the door for a move down to fill a large gap between $101 USD and $100 USD over the coming weeks.
• Bitcoin (BTC): While Bitcoin has found some temporary support, the ultimate bounce level Gareth is watching is the long-term trend line support between $93,000 USD and $94,000 USD.
• Ethereum (ETH): Having broken its key uptrend line, ETH is now targeting the lower parallel of its channel, which coincides with major support around $2,800 USD.

The Mindset for Survival: Be a Nibbler, Not a Gambler

Perhaps the most valuable lesson from today's analysis is not about a specific chart, but about the mindset required to survive and thrive in volatile markets. Gareth shared his personal evolution from a young, reckless trader to a seasoned professional, emphasizing a crucial shift in approach.

"I never go all in on any first buy. I'm a nibbler… I always go into trades expecting to be wrong and it changes your mindset."

This "nibbler" mentality is the antidote to the ego-driven, all-or-nothing bets that blow up so many accounts. By entering positions in small increments and planning for the possibility of being wrong, a trader can average into a position defensively, manage risk effectively, and avoid the emotional shock of a trade moving immediately against them.

This cautious, methodical approach is informed by a sobering long-term outlook. Gareth candidly shared his concerns about a potential 100-year cycle event, mirroring the Great Depression, driven by a confluence of factors including mass unemployment from AI and unsustainable U.S. debt levels. While he hopes to be wrong, this long-term view reinforces the wisdom of focusing on high-probability swing trades rather than blindly holding for the long term in the current environment.

Conclusion: A Market of Levels and Logic

The market is now in a confirmed correction, led by the very stocks that propelled it to unsustainable heights. Fear is rising, and uncertainty is rampant. In times like these, a trading game plan based on logic, charts, and discipline is not just an advantage; it's a necessity.

By identifying key technical levels, understanding the broader market context, and maintaining emotional control, traders can navigate this downturn not as victims, but as opportunists. The coming days and weeks will offer numerous chances to capitalize on short-term bounces, but only for those who have done their homework and have the patience to wait for their price. As the market continues its freefall, the charts will provide the only reliable roadmap through the turbulence.