My Trading Game Plan Revealed - 11/18/2025: S&P Resistance, Nasdaq Breakdown, AI Bubble Risks

The market's recent downturn is confirming the warnings Gareth Soloway, Chief Market Strategist at Verified Investing, has been issuing for weeks. As the selling pressure mounts, the narrative of a potential market correction, or even a significant cycle top, is moving from a possibility to a reality. In this morning's My Trading Game Plan, Gareth broke down the critical technical levels that are defining this market shift, highlighting how smart money is taking profits while retail investors remain conditioned to buy every dip.

This article dives deeper into the charts and logic behind this cautious outlook. We'll explore the monumental resistance facing the S&P 500, the confirmed technical breakdown in the tech sector, the widening cracks in the AI narrative, and how, even in a falling market, a disciplined trader can identify high-probability buying opportunities.

The S&P 500's Date with Destiny

The most important chart for understanding the market's current predicament is the weekly chart of the S&P 500. A massive parallel trendline, connecting the COVID lows, the 2022 bear market bottom, and other key pivots, now sits directly overhead, acting as formidable resistance. This isn't just a line on a chart; it represents a historical ceiling that has repeatedly capped major market advances.

As Gareth emphasized, the core principle for any technician is to respect these levels until they are decisively broken. "Trust the level until proven otherwise. What that means is that it's a top on the market because every past scenario has shown us that this parallel is valid." This approach removes emotion and opinion from the equation, forcing an investor to react to what the market is actually doing, not what they hope it will do.

To understand the power of such a long-term technical boundary, we need only look at the chart of silver. A similar parallel channel on silver's multi-year chart perfectly identified the major highs. The metal hit the upper band, pulled back 16%, rallied back for a "double tap," and was rejected again. This historical precedent in a different asset class reinforces the potential significance of the resistance the S&P 500 is currently facing.

While the upside is capped, a new and critical support level has formed on the S&P 500's weekly chart. The recent weekly lows have clustered tightly around the 6,637 to 6,635 level. A sustained break below this price floor would signal an acceleration of the downturn, with the next major technical target sitting at 6,550.

The Nasdaq's Confirmed Breakdown

While the S&P 500 is testing its ceiling, the tech-heavy Nasdaq 100 has already started to crack. The QQQ, the ETF that tracks the Nasdaq 100, has not only broken below a key ascending trendline but has now confirmed that breakdown. In technical analysis, a confirmation occurs when the price closes below the low of the initial breakdown candle, signaling that sellers have taken firm control.

This is a significant bearish development for the market's leading sector. "I repeat the QQQ has confirmed a breakdown, the NASDAQ 100," Gareth stated, underscoring the importance of this signal. A confirmed breakdown means that the old support trendline now becomes new resistance. Any bounces are likely to be sold into, with the expectation of lower prices to follow.

The timing of this breakdown is particularly fascinating, as it comes just before NVIDIA reports earnings tomorrow after the bell. This sets up a crucial test. Even if NVIDIA delivers a blockbuster report and the stock rallies, the broader index may simply use that strength to retrace back to the underside of the broken trendline, offering a prime shorting opportunity for traders who understand the technical landscape.

The Cracks Widening in the AI Narrative

The technical weakness in tech is being mirrored by growing fundamental questions about the sustainability of the AI boom. For months, the AI narrative has been a primary driver of market gains, but a closer look reveals significant issues that smart money is no longer ignoring. The valuation of many AI-related stocks has priced in perfection for years to come, leaving no room for error.

Gareth highlighted several key concerns:

• Creative Accounting: Hyperscalers—the massive cloud companies buying AI chips—have been depreciating these chips over a seven-year period. However, research suggests a high-end AI chip loses as much as 90% of its value within the first two years. This accounting choice drastically inflates reported earnings, masking the true, rapid decay in asset value.
• The Power Grid Problem: The immense energy consumption of AI data centers is straining power grids. Consequently, projects are being halted due to a simple lack of available electricity. This physical constraint puts a hard cap on the industry's near-term growth potential. As Gareth pointed out, the irony is palpable: "How ridiculous is it that you and I are going to have our electric bills go up like two, three times to power AI, which will then eventually take our jobs."
• Circular Money Flows: The web of investments and purchases between major AI players—where Company A invests in Company B, which then uses the money to buy Company A's products—raises questions about the organic nature of the reported revenue growth.

"My issue. It's the valuation," Gareth clarified. At a different price, these are fantastic companies. But when their stock prices reflect revenues and profits projected out to 2030, the risk-reward proposition becomes dangerously skewed to the downside.

A Historical Warning for Semiconductors

Nowhere is the valuation concern more evident than in the semiconductor sector. The SMH, the semiconductor ETF, recently triggered a historical warning signal that Gareth brought to viewers' attention two weeks ago. The ETF had climbed 102% above its 200-week moving average.

This isn't an arbitrary number. Looking back at market history, the last two times the SMH reached this level of extension, it was followed by catastrophic declines of 45% and 40%, respectively. To simply return to its 200-week moving average from the recent highs would require a 49% drop. While the moving average will gradually climb, this historical precedent suggests a correction of as much as 40% in the semiconductor space could be on the table. This provides a sobering, data-driven context for the current sell-off.

Finding Longs in a Falling Market

Being bearish on the overall market doesn't mean a trader sits on their hands. In fact, significant pullbacks create high-probability, short-term buying opportunities for those who can identify key technical support levels. A skilled trader is neither a permabull nor a permabear; they are a realist who plays the probabilities presented by the charts.

Gareth outlined several specific stocks that are approaching powerful support zones where a bounce is likely:

• Meta (META): A beautiful, long-term trendline originating from the October 2022 bear market low at $85.00 USD is fast approaching. This line provides a major support level around the $575.00 USD price point.
• Amazon (AMZN): A confluence of two technical levels creates a strong support zone for a potential day trade. A gap fill level and an intersecting trendline converge around $222.00 USD.
• Dell (DELL): After a nearly 30% drop, Dell is nearing a significant support zone created by multiple prior pivot highs and lows between $118.00 USD and $116.00 USD.
• Robinhood (HOOD): A clear gap fill from a previous breakout provides a tradable support level between $101.00 USD and $100.00 USD.

The strategy here is not to buy and hold for a new all-time high. In a corrective market, the goal is to play for a calculated bounce to a logical resistance area, take profits, and reassess. "You always want to plan, have realistic top targets in your trades, not like, oh, well, I just hope I'm going to be a zillionaire by holding this."

What Crypto's Weakness is Signaling

The cryptocurrency market, often a leading indicator for risk appetite, is flashing its own warning signs. Bitcoin has flushed below a major trendline that defined the bull market, though it has yet to confirm the breakdown. A confirmation would open the door to a much deeper correction, with a target zone between $75,000 USD and $73,000 USD.

Even more telling is the merciless selling in the altcoin space. Assets like Polygon, Chainlink, and Avalanche are breaking down, grinding to new lows. This is classic de-risking behavior. Historically, we've seen this pattern play out repeatedly:

1. High-risk assets like crypto and altcoins top out first as smart money gets cautious.
2. Four to six weeks later, the broader stock market begins to fall.

This exact sequence occurred in 2017 and 2021, and it appears to be unfolding again. The weakness in crypto is not an isolated event; it's a canary in the coal mine for broader market risk.

Conclusion: Navigating the Correction with Logic and Charts

The market is at a critical juncture. The S&P 500 is battling monumental overhead resistance, the Nasdaq has confirmed a technical breakdown, and the foundational narrative of the AI boom is showing serious cracks. Historical precedents and leading indicators from the crypto market all point toward a deepening correction.

However, this environment is not a reason to panic. It's a reason to be disciplined. By trusting the charts, respecting key technical levels, and maintaining a flexible mindset, traders can navigate this volatility. The plan is clear: remain cautious on the overall market while staying ready to act on high-probability, short-term long setups as individual stocks hit major support. As the hype and narrative fade, logic and charts will continue to provide the most reliable roadmap for the path ahead.