Trading The Close Market Recap - 10/21/2025: Doji Indecision, Gold Plunge, Bitcoin Crossroads & Meme-Stock Mania

On a day defined by sideways chop and indecision, the broader market seemed to hold its breath, waiting for the next major catalyst. While the S&P 500 and Nasdaq traced out narrow patterns, beneath the surface, powerful currents were at work. A historic plunge in precious metals, explosive moves in meme stocks, and critical earnings reports created a complex and fascinating trading landscape. In this afternoon's Trading The Close, Pro Trader Drew Dosek of Verified Investing dissected these divergent signals, revealing key technical levels and historical patterns that could dictate the market's next move.

The Market's Moment of Indecision

After a period of strong recovery, both the S&P 500 and the Nasdaq 100 spent the day coiling into tight patterns, closing nearly flat and forming doji candles. In technical analysis, a doji candle—characterized by a very narrow body where the open and close prices are nearly identical—is a classic sign of a stalemate between buyers and sellers. It represents a pause in the prevailing trend and often precedes a significant reversal or continuation.

As Drew explained, this pattern is particularly noteworthy given its location: “Notice these narrow body bars, how they occur oftentimes right at the tops of the charts. And when they occur at the top of the charts, that's telling you there's equal amounts of buyers and sellers. It's basically a battle going on right there contained in that candle.” This equilibrium suggests that the bullish conviction that drove the recent rally is now being met with equal force by sellers taking profits or initiating short positions.

The key battleground for the S&P 500 remains a massive red candle from a previous session. The index has rallied back to the top of this candle but has so far failed to break decisively above it. An inclining trendline provides critical support, converging with the top of that candle around the 6,740 level. With major earnings from Netflix and Tesla this week, this zone of indecision is unlikely to last. The market is at a pivotal point where the next move could be sharp and decisive.

A Tale of Two Metals: Gold's Historical Echo

While equities chopped sideways, the precious metals market experienced a dramatic and violent sell-off. Gold was hit particularly hard, plummeting 5.81% in a single session. This move wasn't entirely unexpected for viewers of the show. Drew had previously highlighted a striking parallel between gold's current price action and its parabolic run and subsequent collapse in the late 1970s.

By analyzing the weekly charts from 1979-1980, a clear pattern emerges: a powerful, multi-week breakout followed by a massive reversal candle that wiped out a significant portion of the gains. Drew noted that the candle count of the current rally closely mirrored the historical precedent. The 1970s chart showed a reversal on the ninth weekly candle of the breakout. Today, we are witnessing a similar sharp decline on the eighth or ninth candle, depending on the starting point of the count.

This historical analogue suggests that the selling pressure may not be over. The 1980 chart shows that after the initial plunge, gold saw a brief bounce before continuing its decline, eventually retracing close to its pre-breakout consolidation zone. Applying this pattern to today, a similar drawback could take gold prices down toward the top of its recent consolidation range. Drew identified a key technical target around the $3,700 level, where the top of a long-term parallel channel should provide major support. For now, this is not a dip-buying opportunity; it's a time for caution as sellers remain firmly in control.

Silver’s Masterclass in Technical Analysis

Silver also plunged, but its intraday price action provided a perfect textbook example of how technical support and resistance levels function in real-time. Drew had a key daily support trendline mapped at $49.83. When the selling accelerated, price didn't just hit this line and bounce; it plunged through it.

However, as seen on the 10-minute chart, the level remained critical. Price fought to reclaim it, briefly rallying to $50.39 before failing. It then came back down, bounced off the $49.83 level again, and then finally broke down decisively. This sequence perfectly illustrates a core tenet of technical analysis that Drew frequently emphasizes: “When price breaks a trendline, it likes to go back and retest the trendline, much like it did right here on the 10-minute chart before plunging further down on the charts.”

This retest action confirms the breakdown and validates the level's importance. For traders looking to go long on silver, Drew advised against buying the first level of support after such a massive rally. Instead, he identified potential buy zones much lower, under $46.79 and potentially near a long-term inclining trendline that projects out to $41.40.

Bitcoin at a Technical Crossroads

Bitcoin had a strong session, trading up above $110,000, but its chart structure presents a critical long-term scenario. Since the beginning of 2025, Bitcoin’s price action has been largely contained within a well-defined inclining parallel channel. Recently, it found significant support at the bottom of this channel, around the $105,000 area, which propelled the current bounce.

The immediate resistance lies at the channel's midpoint, around $116,000. However, the more significant risk lies in another test of the lower trendline. This support level has now been tested three times. In technical analysis, the more a support or resistance level is tested, the weaker it becomes. A fourth test of this trendline would present a "coin flip" chance of a breakdown.

Should that breakdown occur, the next major target would be $97,000. A move below the psychological $100,000 mark would likely trigger a wave of both panic selling and opportunistic buying. Drew noted he would be among the latter group, stating, "I'd be scooping up some more Bitcoin down here near $100,000 for a potential chance of a rebound."

The Meme Stock Canary in the Coal Mine

Amidst the indecision in major indices and the carnage in metals, a familiar sign of speculative froth has returned to the market: the meme stock. Shares of Beyond Meat (BYND), a company that produces plant-based meat substitutes, exploded over 550% in just three trading days, rocketing from $0.64 to over $4.20.

The rally was ignited by a combination of positive news—a partnership with Walmart—and a classic short squeeze setup. With over 60% of the company's shares held short by institutions, the buying frenzy forced short-sellers to cover their positions, adding fuel to the fire.

While these parabolic moves often end poorly for retail investors who chase the top, Drew highlighted the phenomenon as a crucial indicator of overall market sentiment. “As long as this sort of stuff with Beyond Meat is going on in the markets, we likely are still going to stay elevated because all of these type of plays tells us that people are willing to speculate,” he explained. “And not only just speculate, they're willing to gamble… And when that happens, that means risk on.”

This "risk-on" appetite, where investors are willing to make highly speculative bets, creates a supportive backdrop for the entire market. It’s a powerful counter-signal to the warning signs of doji candles and weakness in other sectors.

Conclusion: Navigating a Market of Contradictions

Today’s market action presents a puzzle of conflicting signals. On one hand, we have major indices showing signs of exhaustion and indecision at key resistance levels. Precious metals, a traditional safe haven, have broken down violently. On the other hand, the speculative mania seen in stocks like Beyond Meat suggests that animal spirits are alive and well, providing a powerful tailwind of liquidity and risk appetite.

The after-hours earnings report from Netflix, which saw the stock drop from $1,241 to $1,181, could be the catalyst that resolves the market's indecision. A negative reaction in a market leader could give sellers the upper hand and lead to a test of lower support levels.

For traders and investors, this environment demands vigilance and a multi-faceted approach. It requires paying close attention to key technical levels, understanding historical precedents, and correctly interpreting the sentiment signals bubbling up from all corners of the market. The battle between buyers and sellers is reaching a fever pitch, and the coming days will likely determine who wins the war.