TRADING GAME PLAN REVEALED: Pivotal Market Levels, PCE Data & Key Stock Breakdowns

The market is coiled like a spring, resting on a series of critical technical levels that could dictate the next major directional move. After three consecutive down days, a pre-market rally has brought major indices right back to the brink. In this morning's TRADING GAME PLAN REVEALED show, Gareth Soloway, Chief Market Strategist at VerifiedInvesting.com, cut through the noise to reveal the three most important charts traders must watch now. He also shed light on some highly suspicious market action surrounding this morning’s economic data release, providing a crucial lesson in market awareness for every investor.

An Hour of Truth Before the Data

Before diving into the pivotal chart levels, it's essential to understand the context of this morning's rally. The Personal Consumption Expenditures (PCE) Price Index, a key inflation gauge for the Federal Reserve, was released at 8:30 AM ET. The data came in perfectly in line with expectations—benign numbers that the market celebrated with a pop higher. However, the real story began a full hour earlier.

As Gareth pointed out, the price action leading into the report was anything but random. After a quiet overnight session, the S&P 500 futures were flat. Then, at exactly 7:30 AM ET, something changed.

"Literally one hour of just consistent buy, buy, buy, buy, buy, buy. Oh, economic data comes out, PCE. It's in line with estimates... Futures rip higher, all right? This I have seen more over the last three to six months than I have ever seen in my trading career of 26 years."

This phenomenon, where a steady, directional bid appears just before market-moving data is officially released, points to a troubling trend: information is likely leaking to certain players before the public sees it. While the idea of insiders having an edge is as old as the markets themselves, the recent blatancy of these moves is what’s alarming.

"It is a little ridiculous. It's almost making it out like people think that retail is too stupid now. It's ridiculous. And it honestly pisses me off a little bit."

For the retail investor, this isn't a call to cry foul, but a call to be aware. Recognizing these patterns is part of developing a professional trading mindset. When you see a one-sided, persistent move into a major data release, it can provide a strong clue about the likely outcome of the data itself. It’s another piece of the puzzle, a real-time tell that savvy traders can incorporate into their analysis.

The Three Trendlines That Define This Market

With the market pushing higher on the PCE news, it has now arrived at a critical juncture. Gareth identified three specific, multi-touch trendlines on the S&P 500, the Nasdaq 100, and the Semiconductor ETF that are acting as the last line of defense for the bulls. A confirmed break below any of these would signal a significant shift in market character.

1. The S&P 500: A clear trendline extends from the 2023 lows and has been tested successfully six times, including during yesterday’s flush. The market bounced perfectly off this level. This line represents the primary uptrend support. As long as the S&P 500 remains above it, the market can continue to consolidate or even push to new highs. However, a break would be a major warning shot. "If we break this line, watch out below," Gareth cautioned.

2. The Nasdaq 100 (QQQ): The tech-heavy index has a similar, well-defined trendline connecting its recent lows. The mechanics behind a break of such a significant level are crucial to understand. It’s not just about human psychology; it’s about machine-driven trading.

"If we break here, the floodgates should open to the downside... there are algorithms and algorithms know these lines. And so they will go into sell mode when these levels are broken and it will start a fear factor that will slowly increase amongst institutions and retail."

This is how minor pullbacks can escalate into sharp corrections. Once a key technical level is breached, automated selling programs are triggered, which pushes prices lower, which in turn triggers more stop-losses and creates fear among human traders, leading to a cascade of selling.

Why Semiconductors Are the Whole Story

Of the three charts, the most important may be the VanEck Semiconductor ETF (SMH). Its trendline, connecting the October lows, was tagged and held yesterday. A break below this line, currently around the $314.00 USD level, could be the ultimate catalyst for a market-wide sell-off. But why is this one ETF so critical?

"This is the market. Like literally the semiconductors are the market right now," Gareth stated emphatically.

This isn't an exaggeration. The entire narrative of economic strength in the U.S. is currently being propped up by one theme: Artificial Intelligence. The massive capital expenditures from companies like NVIDIA, Oracle, and others on AI infrastructure are single-handedly keeping the U.S. out of a recession. Take that spending away, and the economic picture looks vastly different.

Therefore, the health of the semiconductor sector is a direct proxy for the health of the entire market's primary growth engine. If the SMH breaks its key support, it signals that the AI trade is faltering, and the pillar supporting the broader market is cracking. The first logical target on a breakdown would be the gap fill below, followed by a probable retrace to the trendline (the "scene of the crime"), and then the next major leg lower.

Price Action Over Opinion: The Trader's Creed

The market’s reaction to the PCE data—with the dollar and 10-year yields pulling back—highlights a fundamental principle of successful trading: you must trade the market's reaction, not your personal opinion of the data. Many investors, and even Gareth himself, may look at rising prices in the real world and question the validity of official inflation statistics. But that skepticism has no place in a trading decision.

"Regardless of what we think or feel, it doesn't really matter. We trade price action. Always remember that guys, because again, when we start to allow our emotions or our extracurricular thoughts to influence our investing, that's where we make mistakes."

This is the core discipline that separates consistently profitable traders from the rest. Gareth openly shares that it took him five years of making every mistake imaginable—buying tops, panic-selling bottoms, and replenishing his account—before he learned this lesson and achieved consistent profitability. It is the ability to set aside personal bias and focus solely on what the charts are saying that creates a sustainable edge.

A Glimpse of the Future: Key Stock Setups

To understand what a trendline break looks like in practice, one only needs to look at Amazon (AMZN). The stock had a beautiful, multi-touch trendline very similar to the ones the S&P 500 and NVIDIA are currently testing. Amazon broke its line and has since seen a significant downward move. This chart serves as a potential roadmap for the broader market.

"Amazon shows us essentially the future of what potentially could be in store for a chart like Nvidia," Gareth noted.

Here are other key individual stocks at critical junctures:

Costco (COST): Despite decent earnings, the stock is breaking its uptrend. Management’s commentary was telling: they see a struggling consumer and are actively working to mitigate the impact of tariffs. This macro headwind, combined with the technical breakdown, suggests a potential move down to the $785.00 to $800.00 USD support zone over the coming months.
Meta Platforms (META): A textbook head and shoulders pattern has formed. This is a classic topping pattern, but it is crucial to remember the educational point: the pattern is not active until the neckline is broken. A confirmed close below the neckline would trigger the pattern, opening the door for a drop toward the $650.00-$660.00 USD range.
Tesla (TSLA): The analysis on Tesla has been spot-on, correctly identifying the breakout, the retrace to the scene of the crime as a buying opportunity, and the current resistance. If Tesla can push through the ~$443.00 USD level, the next upside targets are $465.00 USD and then the double top area around $488.00-$489.00 USD.

Crypto and Commodities Update

Bitcoin (BTC): A head and shoulders pattern here has officially broken its neckline. While confirmation is still needed, a measured move calculation points to a potential downside target of $90,000. If the price can reclaim the neckline before confirming the breakdown, the pattern would be negated, but for now, the technical bias is to the downside.
Gold (XAUUSD): The yellow metal is getting a slight bid from the weaker dollar but remains within a large parallel channel. It is currently bumping against significant resistance near $3,800/oz. An interesting possibility is a "double tap" of the lower channel line, similar to a previous pattern, before a more sustained move.
Silver (XAGUSD): Silver is showing impressive relative strength. It broke out above the minor resistance at $44.00 USD and only paused for two days before continuing its ascent. This powerful price action suggests it is well on its way to the next major target zone between $48.00 and $50.00 USD per ounce.

Conclusion: A Market at an Inflection Point

This week has culminated in a fascinating and precarious setup. The market is perched atop critical, well-defined support levels across all major indices. The leadership sector, semiconductors, is testing its own make-or-break line. We have clear case studies, like Amazon, showing the potential consequences of a breakdown, and developing patterns, like the one in Meta, offering a glimpse of what may come.

The key takeaway is the need for discipline and vigilance. These trendlines provide a clear, unbiased roadmap. As long as they hold, the bullish trend remains intact. But if they break and confirm, the character of the market will change, and algorithms will likely accelerate the move. By focusing on price action, respecting the technical levels, and ignoring emotional biases, traders can navigate this inflection point with clarity and confidence.