My Trading Game Plan Revealed - 11/10/2025: Bull Trap Warning As Semiconductors Hit 200-Week Stretch

The markets are surging on news of a potential deal to reopen the U.S. government, sparking a wave of optimism. But as traders rush to buy the dip, a critical question looms: Is this a genuine, sustainable rally, or a cleverly disguised bull trap designed to lure in unsuspecting investors before the next leg down? In this morning's My Trading Game Plan, Gareth Soloway, Chief Market Strategist at Verified Investing, cut through the noise and turned to the only source he trusts for unbiased answers.

As Gareth emphasized, the key to navigating these volatile conditions is to remove emotion and focus on pure, data-driven analysis. “The charts are the answer here. You follow the charts, whatever the charts are saying, that's what it is. At least that's the highest probable outcome.” This article will expand on the key technical levels and historical precedents Gareth identified, providing a deeper look into the patterns that could determine the market’s next major move.

The Unwavering Guide of Parallel Channels

In a market driven by headlines and narratives, from government shutdowns to AI hype, technical patterns like parallel channels provide an objective framework for understanding price action. These channels, formed by connecting major pivot highs and lows with parallel trendlines, have defined the market's boundaries for years. Gareth’s analysis of the S&P 500 and the Nasdaq 100 reveals just how critical these levels are right now.

For the S&P 500, the big picture remains unchanged despite the morning rally. The index is still trading within a massive parallel channel that connects the 2021 bull market peak with the subsequent highs. The lower boundary of this channel has consistently marked major bottoms, including the COVID low and other significant sell-offs, each time providing a springboard for powerful rallies. Conversely, the upper boundary has marked major tops.

Even with today’s 50-point gap up, the S&P 500 is still well below the key resistance level around 6,900. Until that level is decisively broken, the highest probability outcome, based on historical precedent, is that this is a rally into resistance, not the start of a new bull leg. As Gareth puts it, “the parallel channel continues to be my answer to what is the market expected to do. I follow the charts.”

The Nasdaq 100 provides an even more compelling, real-time example of this principle. On Friday, the tech-heavy index was selling off sharply and appeared to be on the verge of a major breakdown below its own parallel channel. However, by the end of the day, a late rally saved the index, pushing it to close back inside the channel. This technical "save" was a powerful clue that a larger collapse was not yet imminent, preceding the positive weekend news and Monday’s subsequent gap higher. The charts knew before the headlines were confirmed.

A Historical Warning Sign from the Semiconductor Sector

While the broad indices are testing key trendlines, the semiconductor sector may be flashing a much more specific and historically reliable warning sign. The VanEck Semiconductor ETF (SMH) has been a primary engine of the market's advance, but a unique metric suggests it may have flown too close to the sun.

Gareth highlighted a fascinating pattern: major tops in the SMH have historically occurred when its price stretches approximately 102% above its 200-week moving average.

• In 2021, the SMH peaked at 102% above this long-term average before correcting by 45%.
• In 2024, it again topped out at 102% above the average before falling 40%.
• Just two weeks ago, at its most recent high, the SMH once again reached that same metric: 102% above the 200-week moving average.

This isn't a coincidence; it's a quantifiable measure of extreme extension. When a sector gets this far ahead of its long-term trend, it becomes incredibly vulnerable to a reversion to the mean. This historical precedent forms one of the core theses for why the semiconductor sector, and by extension the AI-driven market, may be at or very near a significant top.

Further evidence is emerging from the sector's largest components. While NVIDIA, the $5 trillion behemoth, was saved from a technical breakdown on Friday, the second-largest player, Broadcom ($1.65 trillion market cap), was not so lucky. Broadcom clearly broke and closed below its key trendline support. This divergence is critical. Often, the second or third-largest companies in a sector will break down before the leader, acting as a "canary in the coal mine" for the rest of the group. A confirmed breakdown in Broadcom, with a close below Friday's low of $336, would be a significant red flag for the entire semiconductor space.

Decoding Divergence: Big Money Distribution in Micron?

Sometimes, the most powerful signals are not on the price chart itself, but in the relationship between price and momentum. Gareth’s analysis of Micron (MU) provides a textbook example of a "negative divergence" using the Relative Strength Indicator (RSI), a tool that measures the speed and change of price movements.

A negative divergence occurs when an asset’s price is making a series of higher highs, but the RSI is simultaneously making a series of lower highs. This indicates that while the price is still inching upward, the underlying momentum and strength behind the move are fading. It’s often a sign that large institutional players, or "big money," are quietly selling their positions into the buying enthusiasm of retail investors.

On Micron’s chart, this pattern is crystal clear:

• Price: Making a clear series of higher highs, moving from around $114 to nearly $250.
• RSI: Making a distinct series of lower highs, forming a downtrend.

“What that tells me is that big money is dumping into the retail enthusiasm for names like Micron,” Gareth explained. This divergence suggests that a significant correction is likely on the horizon. The key question for traders is timing. A potential upside target exists at a major trendline around the $256 level. A move to that level followed by a sharp rejection would be a classic setup for a short trade, with initial downside targets at $192 and a gap fill near $181.

The Anatomy of a Top: A Case Study in Oracle

While many charts are signaling potential tops, the chart of Oracle (ORCL) shows what happens after a top is in. The stock provides a masterclass in market psychology and the importance of trading the chart, not the story.

Following a blockbuster earnings report, Oracle experienced a historic 45% gap up, briefly making its founder, Larry Ellison, the richest person in the world. The media and retail investors piled in, captivated by the narrative of a massive backlog and AI-fueled growth. Gareth, however, saw something different. “I'm looking at the chart and I'm like, guys, this is the top. This is how things top.”

He was right. Since that peak near $345, the stock has been in a relentless downtrend as institutions used the retail frenzy as exit liquidity. The stock collapsed over $110 down to a low of $233. But this is where discipline and technical analysis create opportunity. On Friday, Oracle’s price came down to perfectly fill the gap created by that initial earnings announcement. This gap fill, combined with the sheer magnitude of the drop, created a high-probability swing trade setup. Gareth took a long position, anticipating a bounce back toward the $270 level, demonstrating that even in a bearish market, calculated long opportunities exist at key technical levels.

Key Levels Across the Markets

Beyond the major indices and semiconductors, several other assets are at critical inflection points that traders should be monitoring closely.

• Bitcoin: After finding support at the 50% Fibonacci retracement level of its recent advance, Bitcoin is bouncing. However, it is now approaching a major resistance zone around $107,200. This area represents a confluence of previous support levels that should now act as resistance. A failure here would open the door for a move down to the primary bull market trendline support near the $94,000-$95,000 zone.
• Gold: The precious metal is getting a bounce today but remains within a classic bear flag formation. This pattern—a slight upward consolidation after a sharp down move—typically resolves to the downside. While the long-term outlook for gold is bullish, the chart suggests it may first need to test its next major support target around the $3,845 level.
• Earnings Movers: Earnings season continues to create volatility. monday.com (MNDY) is down roughly 20% post-earnings, with a key gap-fill support level for day traders around $140-$141. Looking ahead, CoreWeave (CRWV), a critical player in the AI space, is coiled in a wedge pattern. A rally on earnings could target $142, while a breakdown could send it toward $85. Its results could send shockwaves through the entire AI sector.

Conclusion: Navigating the Bull Trap Territory

Today’s rally feels good, but the charts are urging caution. The S&P 500 is approaching massive overhead resistance within its long-term channel. The semiconductor sector, the market's primary engine, is flashing a historical topping signal that has preceded 40%+ corrections in the past. These are not signals to be taken lightly.

As Gareth concluded, these factors are what should give investors pause. “Those to me cut out emotion. Those to me are the two factors right now that have me thinking today's rally could be a bull trap that's coaxing in retail to buy the dip once again, when maybe [we’ve] got to be a little bit more careful.”

The path forward requires discipline. It means respecting the powerful resistance levels overhead and watching for confirmation of breakdowns in key sectors. It means understanding that while broad market risk is elevated, specific, high-probability opportunities will still present themselves to patient traders who wait for price to hit their levels. By letting the charts be the ultimate guide, traders can navigate this complex environment with clarity and confidence.