Trading The Close Market Recap - 02/10/2026: Markets Vulnerable Ahead of NFP — S&P Resistance, Dow Topping Tail & Yield Drop

The markets began the day with a deceptive optimism, grinding higher in the morning session before succumbing to a slow, methodical fade that left major indices in the red. By the closing bell, the S&P 500 had retreated approximately a third of a percent, while the tech-heavy Nasdaq shed six-tenths of a percent. This price action wasn't random noise; it was a palpable expression of anxiety as Wall Street braces for the Non-Farm Payrolls report. In this afternoon's Trading The Close Market, Chief Market Strategist Gareth Soloway at Verified Investing broke down the technical damage, the specific red flags in the labor market, and the critical levels traders must watch as we head into a volatile end of the week.

The Macro backdrop: Labor Market Jitters

The immediate catalyst for the intraday reversal lies in the economic calendar. Markets are visibly nervous ahead of the 8:30 a.m. Eastern time Nonfarm Payrolls report. This anxiety isn't unfounded; it follows a string of concerning data points that suggest the labor market—the engine of the U.S. economy—is sputtering.

Recent data revealed that Challenger job cuts for January were the highest for that month since 2009. When we contextualize this against rising initial jobless claims and weakness in JOLTS job openings, a clear picture emerges: the employment landscape is softening. This creates a binary risk environment where bad news could be interpreted as a signal for rate cuts, or conversely, as a harbinger of a deeper recession.

As Gareth Soloway noted during the broadcast:

"A lot of things are building here, making investors nervous going into tomorrow's data… The charts are the charts. We always remember that. We have the S&P 500 that is still unbelievably vulnerable based on major support levels that have broken."

This vulnerability is the lens through which all incoming data must be viewed. The market is not currently in a position of strength where it can shrug off bad news; it is technically compromised, making every data point a potential trigger for volatility.

Index Technicals: The Probability of Downside

A core tenet of professional trading is ignoring the narrative and focusing on the price action. The technical setup on the S&P 500 remains precarious. The index is currently contending with a major resistance trend line dating back to April 2025. This upward-sloping line, which once acted as support, has now flipped to become a formidable ceiling.

The behavior of price at this level is textbook technical analysis: the market broke the level, retraced back up to test it, and is now failing to reclaim it. Until the S&P 500 can close decisively above this "epic resistance zone," the bias remains firmly to the downside.

Understanding Market Probabilities

One of the most valuable insights from today's recap is the quantification of risk. Trading is not about certainty; it is about assessing probabilities. Currently, the technical structure suggests a low probability of a bullish breakout.

"If the market wants to show its strength, it needs to break above this level… If that were to happen, it brings the market into price discovery mode… But the odds, the probabilities of that happening, are not high, maybe 20% chance, maybe 30% if we're lucky. That means 80%, 70% to 80% chance that the markets curl over here based on technical analysis."

When a trader identifies a setup with a 70-80% probability of a specific outcome, it dictates a defensive posture. It explains why chasing rallies in this environment is dangerous and why the "fade" we witnessed today was technically justified.

The Dow Jones "Topping Tail" Signal

While the S&P 500 and Nasdaq have been struggling below resistance, the Dow Jones Industrial Average has been the outlier, recently hitting all-time highs as capital rotated into defensive names like Walmart and Home Depot. However, today's price action generated a specific and potent bearish signal known as a "topping tail."

The Dow rallied significantly intraday—up nearly 400 points—pushing above its own key trend line. However, by the close, sellers had regained control, pushing the index back down to close below that critical level. This intraday reversal creates a candle with a long upper shadow (the "tail"), indicating that higher prices were rejected by the market.

"The Dow Jones Industrial Average just put in a topping tail while also ending the day below a key trend line. What that tells me is probabilities flipped even more so to a negative bias on the Dow."

This development is significant because the Dow was the last bastion of strength. If the defensive rotation trade begins to fail, it removes a key pillar of support for the broader market.

The Bond Market's Warning: 10-Year Yields

The bond market is often considered the "smart money," and its movements today provided a clue regarding expectations for the upcoming jobs data. The 10-year Treasury yield fell, breaking back below the 4.2% support range to sit at 4.14%.

In a vacuum, lower yields are often good for tech stocks. However, the context here matters. The yield is falling not because inflation has vanished, but because bond traders are front-running the potential for weak economic data. A drop in yields suggests the market is pricing in a higher likelihood of Federal Reserve rate cuts necessitated by economic deterioration.

"What is that telling us about expectations for tomorrow's jobs report? Is it saying, oh, it's going to be an amazingly strong report? No. What it's saying is that investors are anticipating a weak number."

This creates a complex dynamic for equity traders. If the jobs number is weak, yields may fall further, but stocks might sell off due to recession fears rather than rallying on rate cut hopes. This decoupling is a classic late-cycle phenomenon.

Earnings Season: Technical Precision in Volatility

Earnings season continues to provide actionable volatility. Today's analysis highlighted how technical levels can help traders navigate post-earnings moves, regardless of the fundamental headline numbers.

Lyft: The Anatomy of a Gap Fill

Ride-sharing company Lyft was punished in after-hours trading, dropping from a close near $17 to around $14.50. While the drop is severe, it opens up a high-probability technical setup known as a "gap fill."

A gap fill occurs when price returns to a level where a previous jump in price left a void on the chart. These levels often act as magnets and subsequent support zones. For Lyft, there is a clear gap fill level at $13.00, with a pivot low just above it at $13.25.

"Technical analysis has shown us in countless examples that there's usually support there and a bounce. And so on a technical analysis basis, tomorrow, if we fall into this $13.25 to $13.00 level in Lyft, I will be looking to go long."

This approach—waiting for the price to come to a specific level rather than panic-selling or FOMO-buying—is the hallmark of disciplined trading.

Robinhood and Cloudflare

Similar discipline applies to other earnings movers:

• Robinhood: The stock has been in freefall, but a major support level looms at the former pivot high of $66 to $67. This level represents a structural support zone where previous resistance turned into support (polarity change), making it a prime location for a potential bounce.
• Cloudflare (NET): Despite a pop on earnings, the stock faces resistance. A day-trade short opportunity exists at the pivot high of $215-$216. However, for a swing trade, patience is required, with a better entry targeting the $250 level.

Crypto and Commodities: Diverging Narratives

Bitcoin's Conflicting Timeframes

Bitcoin continues to trade in correlation with risk assets, dipping slightly as the stock market rolled over. The technical picture for Bitcoin presents a conflict between short-term price action and long-term structure.

In the immediate term, Bitcoin is forming a "bull flag" or inside bar formation. As long as this tight consolidation holds, the probabilities favor a short-term move higher. However, zooming out reveals a more concerning landscape. The broader pattern remains a series of consolidations followed by downward breaks.

"To me, I still think Bitcoin is going lower… Worst-case scenario, if we get all the way down, the head and shoulders, this head and shoulders right here, it would complete its move, its measured move [is] at $35,000."

This dichotomy illustrates why timeframe matters. A day trader might be long Bitcoin for the flag breakout, while a position trader remains cautious or short, anticipating the completion of the larger bearish structure.

Gold vs. Silver: Relative Strength

A distinct divergence has emerged in the precious metals complex. Gold remains resilient, hovering near recent highs, while Silver is languishing significantly below its peaks.

This relative strength in Gold suggests it is acting as the primary safe-haven asset, while Silver's industrial component weighs it down. The chart for Silver shows a bearish "inside bar" pattern following a drop, suggesting another leg lower is the higher probability outcome. Traders looking for exposure to metals should note this disparity; Gold is currently the stronger chart, while Silver remains trapped in a potentially bearish consolidation.

The CPI Wildcard: Oil and Housing

Looking ahead to Friday's CPI data, Crude Oil has broken out of a wedge pattern, with a target of $70 per barrel. While energy prices, along with copper and live cattle, have been rising, the CPI number might not fully reflect this inflation.

This is due to the heavy weighting of shelter (rent and housing) in the CPI calculation—approximately 30%. With rent metrics stalling or inching down, they may mask the inflationary pressures building in the commodity complex.

"You may not see as hot a number on CPI as many of us would think by going to the grocery store or looking at precious metals… because one of the key components… is the rent and housing costs."

This nuance is critical. A "cool" CPI print might spark a rally, even if real-world costs for food and energy are rising, creating a disconnect between market reaction and economic reality.

Conclusion: The Discipline of Waiting

The overarching theme of today's market action is caution. The S&P 500 and Nasdaq are trading below key resistance trend lines. The Dow Jones has issued a topping signal. Yields are pricing in economic weakness.

In this environment, the most profitable position is often patience. As Gareth Soloway emphasized, "There's a huge flashing red light that is telling me to be very cautious in this market."

For traders, this means respecting the technicals over the narratives. It means waiting for price to hit specific levels—like the $13.00 gap fill on Lyft or the $66 support on Robinhood—rather than chasing momentum. Until the major indices can prove their strength by reclaiming their broken trend lines, the probabilities heavily favor the downside, and capital preservation must remain the primary objective.

The market will provide the answers in the next 48 hours via the jobs report and CPI data. Until then, the charts suggest the path of least resistance remains lower.