My Trading Game Plan Revealed - 11/25/2025: Japan Yield Shock, AI Chip Shake-Up, and Nasdaq Reversal

In this morning's My Trading Game Plan, Gareth Soloway, Chief Market Strategist at Verified Investing, cut through the hype of a seemingly simple market bounce to reveal the complex undercurrents shaping today's trading landscape. While weaker-than-expected retail sales data confirmed a struggling consumer, the real story lies in the global bond market, a major shake-up in the AI chip sector, and the powerful psychological patterns forming on the charts. Today, we'll dive deeper into these critical themes, providing the context you need to navigate the opportunities and risks ahead.

A Warning Shot from Across the Pacific

While most of Wall Street was focused on domestic data, a critical correlation has been developing between the U.S. stock market and the Japanese 10-year Treasury yield. This isn't a coincidence; it's a warning sign that many are ignoring. As Gareth pointed out, the sharp market sell-off a week ago coincided perfectly with a spike in Japan's 10-year yield. Yesterday's market rally, in turn, came as that same yield pulled back.

"We're definitely seeing a correlation, albeit mainstream media is not talking about it, but there is a correlation between spiking 10-year rates in Japan and what we're seeing here."

To understand why this matters, we need to look at the staggering debt levels involved. Japan's debt-to-GDP ratio sits at a massive 240%. The United States is not far behind at 130%. When a country carries this much debt, other nations and investors who buy that debt begin to demand higher interest rates to compensate for the increased risk. This is precisely what's happening in Japan. The rising yields are a signal that lenders are getting nervous.

This dynamic has profound implications for the U.S. market. It's a "shot across the bow," as Gareth described it, signaling that the era of endlessly cheap borrowing is facing a global reality check. The U.S. relies on foreign investment to fund its debt, and if those investors start demanding higher yields, it puts pressure on everything from government spending to corporate borrowing costs and, ultimately, stock market valuations. This isn't just a technical pattern; it's a fundamental economic pressure point that could define market action for months to come.

The Psychology of a Broken Rally

Yesterday's bounce in the S&P 500 and Nasdaq 100 was a welcome sight for bulls, but a closer look at the charts reveals a market grappling with significant psychological damage. The S&P 500 remains trapped within a large parallel channel, with its first major downside target around 6,130, representing an 11% decline from the all-time highs. The only thing that would negate this bearish outlook is a decisive break above the 6,925 level.

However, the more telling story is on the Nasdaq 100 (QQQ) chart. The recent bounce is dwarfed by the massive, wide-range reversal candle from last week. This isn't just a red bar on a chart; it's a monument to a failed breakout and a psychological barrier for investors.

"Think about last week, NVIDIA comes out, the markets are setting up to gap higher, the earnings were fantastic, and then the rug was pulled… Think about psychologically what that does to investors, and that's why the chart and the wide range reversal candle has staying power usually, because of that psychological damage."

Markets are a reflection of collective human psychology. When investors are positioned for a breakout on seemingly great news (like NVIDIA's earnings) and are instead met with a brutal reversal, it creates fear and hesitation. That "wall" of resistance, as Gareth calls it, is built from the trapped positions of everyone who bought near the top. They are now looking for any opportunity to sell at their breakeven point, creating a supply overhang that makes it difficult for the index to rally further. Understanding this psychological component is key to recognizing why such patterns have so much power over future price action.

The Great AI Chip Shake-Up

The AI sector, the undisputed leader of the market, was rocked this morning by news that Meta may be choosing Alphabet's AI chips over NVIDIA's. This single piece of news has triggered a seismic shift, validating a theme Gareth has been warning about for months: competition is coming for the king.

NVIDIA, which has enjoyed near-monopolistic margins, saw its stock drop sharply in the pre-market, trading around $174.00 USD and nearing a critical gap-fill support level at $170.00 USD. AMD, its closest competitor, was also "trounced," falling below the key $200.00 USD level. This is the beautiful, and sometimes brutal, reality of capitalism.

"When you are king of the hill, guess what, every other company is trying to create chips that are going to compete and beat your chips… Ultimately what is this going to do? It's going to drive margins down… and that is one of the reasons why… these stocks are going to go lower over the next 6-12 months in my opinion."

While NVIDIA and AMD faltered, Alphabet (Google) soared, gapping up toward a monumental resistance level on its monthly chart. The stock has been on a parabolic run, rising over 130% since April and ballooning from a sub-$2 trillion company to over $4 trillion. This is where contrarian thinking and technical analysis converge. Despite the seemingly bullish news, Gareth revealed he is short 15,000 shares of Google, targeting a pullback from the top of a multi-year parallel channel around $332.00-$333.00 USD.

The rationale is a masterclass in trading psychology. Just months ago, the narrative was that Google was finished, doomed to lose its search dominance to AI. Now, the narrative has flipped to one of extreme euphoria.

"When the narrative gets this bullish, I look to shorten to that, absolutely every single time. When the narrative is negative and nasty on a company, that's what I'm looking to buy."

This is a classic "buy the rumor, sell the news" scenario on a grand scale. The stock's incredible run has already priced in immense optimism. The chart is like a "rubber band that is stretched so far," and this final euphoric push provides a high-probability opportunity for a snap-back, with Gareth targeting a move back below $300.00 USD.

A Masterclass in Evolving Risk/Reward: The Oil Trade

One of the most valuable lessons from today's session came from an unexpected place: the crude oil chart. For weeks, oil has been forming a classic cup and handle pattern, a bullish formation. Yet, the trade hasn't been actionable until now. Why? Because the risk-to-reward ratio has finally shifted into a highly favorable position.

"The pattern on oil has been the same pattern it's been for a month now… but because the risk reward is slowly getting better and better, the odds of me getting in this trade are advancing."

This is a crucial concept for all traders to grasp. A pattern alone is not a trade signal. The genius of professional trading lies in waiting for the moment when the potential reward vastly outweighs the potential risk. As oil has drifted closer to the low of the cup, the stop-out point has become clearer and closer.

Specifically, a long position in oil now carries a defined risk of just 2.7% (a close below $55.90 USD). The potential reward, based on a measured move from the cup and handle pattern, is a rally to the $64.00-$66.00 USD range, representing an 11% to 15% gain. This is the kind of asymmetric bet that defines a high-probability setup. The pattern hasn't changed, but the trade has matured into a prime opportunity.

Key Levels Across the Board

Beyond the main headlines, several other key assets are at critical inflection points that traders should be monitoring closely:

• Bitcoin: After a bounce from its 100-week moving average, Bitcoin could see a near-term rally toward the psychological $100,000 level. However, Gareth still believes the ultimate trajectory is lower, with a target zone of $73,000 to $75,000 USD.
• Gold and Silver: Both precious metals are coiling tightly within large wedge patterns. The direction is uncertain, and the only logical approach is to wait for a confirmed breakout or breakdown. While Gareth's bias remains slightly bearish, he stresses the importance of letting the chart dictate the trade. "The charts are the charts. They're in charge. It just is what it is."
• Apple: The tech giant appears to be in a phase of bullish consolidation and may want to push slightly higher. However, a major resistance level looms at the top of its parallel channel, around $283.00 USD. A move into this zone would present a strong shorting opportunity, regardless of one's personal feelings about the company's products.

The Trader's Mindset: Logic Over Emotion

Ultimately, navigating today's market successfully comes down to mindset. It's about focusing on what's moving, where emotion and retail participation create an edge over cold, calculating algorithms. It's also about the disciplined practice of letting logic and charts, not feelings, guide your decisions. Gareth's experience with Apple serves as a powerful reminder.

"You might love your iPhone… but the chart's the chart, and I've learned that the hard way… As soon as I let my heart, my feelings, all those mushy things that we all have get in the way, my account goes that way [down]. When I don't, my account goes this way [up]."

This is the core principle of profitable trading. It's not about being right 100% of the time; it's about having a logical, probability-based process that produces a positive outcome over time. The market is presenting a complex picture: a global economic warning, a psychological battle in the major indices, and a massive rotation within the market's leading sector. By staying disciplined, focusing on high-probability setups with defined risk, and letting the charts be your guide, you can position yourself to thrive in any environment.