My Trading Game Plan Revealed - 11/17/2025: Semiconductor Canary Signals 10% S&P and 15% Nasdaq Correction Ahead

The market kicked off the week with a curious mix of headline-grabbing news and underlying technical weakness. While news broke that Warren Buffett’s Berkshire Hathaway had taken a significant stake in Alphabet (Google), the market’s reaction was surprisingly muted. In fact, after an initial overnight pop, the S&P 500 futures faded into negative territory, led by the very sector that has powered this bull run: semiconductors. In this morning's My Trading Game Plan, Gareth Soloway, Chief Market Strategist at Verified Investing, dug beneath the surface-level news to reveal the critical data points and chart patterns suggesting a significant market correction may have already begun.

The Semiconductor Canary in the Coal Mine

For weeks, the semiconductor sector has been flashing a major warning sign, and it forms the bedrock of the current bearish thesis. The VanEck Semiconductor ETF (SMH) reached a historic level of extension, a technical condition that has previously preceded massive drawdowns. This isn't guesswork or a gut feeling; it's a data-driven analysis based on historical precedent.

As Gareth explained, the analysis hinges on the sector's distance from its weekly 200-period moving average, a long-term barometer of trend and value. “I chose the 102% extension because that was the most you ever got extended in 2021 before a 45% drop in the semis and in 2024 we got 102% above that moving average before we collapsed 40%. And so there's always a method, there's data to the madness, if you will.”

This specific 102% extension level has now been reached for a third time. History doesn't always repeat, but it often rhymes, and when a technical extreme has twice led to declines of 40% or more, it represents a high-probability signal that risk is extraordinarily elevated. The current weakness in chip stocks, even on a day with otherwise bullish news for big tech, suggests that this historical pattern may be starting to play out once again. This makes the semiconductor sector the proverbial canary in the coal mine; its health, or lack thereof, could signal a much broader market downturn.

Nvidia: The Market's Make-or-Break Moment

All eyes now turn to Nvidia, the undisputed king of the AI trade, which is set to report earnings on Wednesday after the market closes. The price action in Nvidia is already telling a cautionary tale. In the pre-market session, the stock traded as high as $192.00 USD, only to fall sharply to $187.00 USD. This $5.00 USD reversal is significant, especially heading into such a pivotal event.

Gareth highlighted the immense pressure on this single report: “That's going to be a make or break for this market. The reason I say that is because not only is it the biggest market cap company, but ultimately what we do know is that the AI trade has ruled the roost for the markets, meaning it's basically been 75% of all the upside in the S&P.”

The technical chart for Nvidia is equally precarious. On Friday, the stock gapped below a key up-sloping trendline but was saved by a late-day rally that pushed it back above. The battle for this line is now the most important short-term factor. A daily close below this trendline, followed by a confirmation on the next trading day, would signal a technical breakdown just ahead of its earnings report. Such a development would be profoundly bearish, suggesting that institutional players may already be positioning for a negative reaction, regardless of the headline numbers. If the chart is already signaling weakness before the news, it often means the "smart money" is distributing shares to an unsuspecting public.

Decoding the Broader Market's Warning Signs

The technical alarms aren't confined to the semiconductor sector. The S&P 500 and Nasdaq 100 are both exhibiting patterns that suggest the recent all-time highs could represent a major cycle top. Based on this analysis, Gareth has outlined a clear forecast: a 10% correction for the S&P 500 and a 15% correction for the Nasdaq over the next one to two months.

The S&P 500’s weekly chart shows a powerful rejection from a parallel trendline that connects the 2021 bull market peak with the recent highs. This is the same channel whose lower boundary marked the bottom of the market five separate times. A rejection from the top of such a well-defined channel is a classic signal of trend exhaustion. The 10% correction target (technically 11%) is derived from a common technical principle: former major highs often become future major support. A pullback to the 2024 highs would represent a logical first target for a corrective move.

Meanwhile, the Nasdaq 100 (QQQ) is testing the bottom of its own parallel channel. A break of a trendline is one thing, but a confirmation is what gives traders a higher-probability edge. Gareth’s proprietary confirmation signal requires a close below the low of the initial breakdown candle. For the QQQ, that critical level is 606. A close below that price would confirm the breakdown and significantly increase the odds of a move toward the 15% correction target.

The Psychology of a Market Top

Understanding the technicals is only half the battle. The other half is mastering the psychology of a market that has been conditioned for years to "buy the dip." This ingrained behavior is precisely why major market tops are processes, not events.

“Markets don't do that because psychology, which is the driving force behind price action is run by people that have been conditioned… to assume every pullback is a buying opportunity,” Gareth explained.

This mentality creates a specific pattern during downturns. The initial drop is met with buying. A 3% dip is seen as a gift. A 5% dip is a bargain. This buying pressure creates bounces and rallies within the downtrend, leading to a frustrating, stair-stepping decline. It’s a process that slowly wears down the bulls.

The true panic and capitulation—the V-bottoms everyone now expects—don't happen at the highs. They happen at the lows, after the "buy the dip" strategy has failed repeatedly. Referencing the 2008 financial crisis, Gareth showed how the market went down, bounced, went down further, and bounced again. The steepest, most panic-driven selling occurred months after the initial top, culminating in a brutal 24% drop in less than a month from February to March 2009. This is when the last of the bulls finally give up. For the prepared trader, this is not a time to panic; it's a time to prepare. When mainstream fear reaches its peak, that's when the best buying opportunities emerge.

When Good News is Bad News

Two case studies from today’s market perfectly illustrate how institutional players operate. First, the reaction to the Warren Buffett news in Google. A stock receiving the ultimate seal of approval from the world’s most famous investor should, in theory, soar and hold its gains. Instead, after an initial pop, Google’s price action showed a significant rollover.

This is a classic bearish signal. “When you have good news and you still sell off on good news, that's when the market's telling you something, because that is a signal institutions are unloading,” Gareth noted. Retail investors hear good news and buy; institutions often use that influx of retail buying as liquidity to sell their large positions.

Second, Netflix recently announced a stock split. While often perceived as bullish, the timing is suspect. The company executed the split after a period of bad news and slowing growth. This is a form of financial engineering designed to make the share price appear cheaper to attract less sophisticated investors and artificially prop up the stock. It’s a defensive move, not one made from a position of strength, and can be interpreted as a "bear market signal" for the company itself.

Key Levels in Crypto and Commodities

Beyond the equity markets, several other asset classes are at critical inflection points:

• Bitcoin (BTC): The crypto king is holding a massively important trendline support in the $93,000 USD to $95,000 USD zone. This line traces back to the beginning of the bull market. A confirmed break below this "epic level" could open the door to a much deeper correction toward the $73,000 USD to $75,000 USD range. A successful hold, however, could provide the base for an eventual return to all-time highs.
• Silver: The precious metal has been rejected twice from a major double-top resistance zone formed by the financial crisis low, the bull market high, and the COVID low. This powerful rejection provided a high-probability shorting opportunity.
• Oil: A bullish "cup and handle" pattern remains in play. As long as the recent lows hold, the technical formation points toward an eventual breakout, with a potential target in the $65.00 USD to $67.00 USD range.
• MicroStrategy (MSTR): For the first time in a long while, the company is trading slightly below the value of its Bitcoin holdings. While its debt load complicates the valuation, the stock is approaching a significant technical support zone between $175.00 USD and $185.00 USD, which could present a trading opportunity.

Conclusion: Navigating the Inflection Point

The market stands at a critical juncture. While headlines may point one way, the charts and data are telling a different story—one of historical over-extension, technical breakdowns, and institutional distribution. The semiconductor sector has fired a clear warning shot, and Nvidia's upcoming earnings report is poised to be the catalyst that either confirms the bearish thesis or grants the market a temporary reprieve.

The key for investors and traders in the coming weeks will be to ignore the noise, trust the data, and understand the psychological traps that ensnare the unprepared during market tops. The "buy the dip" mentality may have worked for years, but the technical evidence suggests that a new chapter, one that rewards patience and discipline, may be about to begin. By focusing on probabilities and clearly defined levels, traders can navigate this challenging environment with clarity and confidence.