Trading The Close Market Recap - 12/03/2025: VIX Complacency Warning, Silver's Historic Echo & ON Semiconductor Trendline

In this afternoon's Trading The Close show, Pro Trader Drew Dosek of Verified Investing guided viewers through a masterclass in technical analysis, revealing how historical patterns, driven by human psychology, are re-emerging across the charts. From a concerning complacency signal in the VIX to a stunning historical echo in the silver market, the day's analysis provided a critical roadmap for navigating a market that may be quieter than it appears.

The Complacency Conundrum

While major indices showed strength, a key underlying indicator flashed a significant warning sign. The VIX, which measures volatility for the S&P 500, has fallen to 16.09. This level is not just low; it’s a return to the exact zone of complacency we witnessed right before the sharp sell-off in November. This suggests that a sense of calm has returned to the market, but as seasoned traders know, maximum calm often precedes the storm.

Drew highlighted this critical observation, noting the danger that lurks when fear evaporates from the market, especially on lighter trading volume. "When there's complacency you need to stand guard," he warned. This isn't a prediction of an imminent crash, but rather a professional assessment of risk. When the VIX is this low, it implies that protective options are cheap and market participants are not pricing in significant downside risk. History shows that these are the precise conditions where sudden, sharp moves can catch the unprepared off guard. It’s a reminder that traders must remain vigilant and disciplined, because selling pressure can re-emerge at any time, often when it is least expected.

Silver’s Historical Echo: A Lesson in Human Psychology

One of the most compelling charts of the day was Silver, which offered a profound lesson on how market history, driven by immutable human emotions, tends to repeat itself. While Silver posted a green candle today, a look at the monthly chart reveals a pattern that is both explosive and cautionary. Drew guided viewers back through decades of price action, illustrating a powerful and recurring theme.

"Look back on this chart… every time silver has spiked up… it's been met with equally hard selling pressure straight back down," Drew explained, pointing to dramatic spikes in 1979 and 2011 that were followed by catastrophic declines. The chart shows we are in the midst of a similar vertical ascent right now. This isn't a coincidence; it's a reflection of human psychology. The same frenzy, greed, and eventual panic that drove those past cycles are at play today. As Drew aptly put it, "All of this is human psychology and it all repeats. You know why? Because we're still human folks."

This historical precedent is supported by modern technical indicators. The Relative Strength Index (RSI) on the monthly chart is screaming overbought at a reading of 85.98, far above the 70 level that typically signals an exhausted trend. While resistance looms higher at $62.58, the message from the chart is clear: such accelerated moves are unsustainable and historically lead to severe profit-taking. This brings to mind one of Drew’s favorite axioms: "History doesn't necessarily repeat to a tee. I like to say and think it often rhymes." The current setup in Silver is rhyming loudly with its past, suggesting that while the timing is uncertain, a significant pullback could be on the horizon.

The Illuminating Power of a Single Trendline

In a stunning display of technical precision, the chart for ON Semiconductor (ON) became a live demonstration of how a single, well-drawn trendline can unlock a wealth of information about a stock's past, present, and future. After a massive 11.01% gain today that pushed it through a near-term declining trendline, the bigger picture revealed a much more powerful technical story.

Drew drew a single inclining trendline starting from the October 2022 lows and connecting through the April 2024 pivot. The result was extraordinary. This one line not only connected those two points perfectly but also precisely identified the pivot high from July 2025 and served as the exact level where the stock found resistance before its subsequent decline. It then became the level price action needed to re-test from below. This single line effectively mapped out the stock’s entire journey for over two years.

This is the essence of multi-factor technical analysis. It’s not about drawing random lines, but about identifying the key levels that the market itself is respecting. For ON, this same trendline now projects a potential long-term resistance target all the way up at $94.20. As Drew emphasized, the stock won't move there in a straight line. It will likely face pullbacks and consolidation. But that single trendline provides a clear roadmap and a tangible target for traders to watch as the price action unfolds.

Breakout Stars and the Winning "Trifecta"

Several individual stocks made headlines today with powerful upside moves, each offering a lesson in what drives investor excitement. Microchip Technology (MCHP) was a standout, rocketing up 12.17%. The reason for this explosive move was what Drew called the "trifecta" — the perfect recipe for attracting institutional and retail money. MCHP raised its guidance, announced a strong order backlog, and is heavily involved in the artificial intelligence (AI) sector. This combination of positive forward-looking statements, proven demand, and exposure to the market's hottest theme is the "perfect secret sauce" for a major rally.

DIX also had a strong showing, gaining 8.84% after raising guidance and announcing strategic moves, including streamlining its Foot Locker acquisition and naming a new president. Investors rewarded this proactive management, but the stock is now pushing into a heavy resistance zone of prior consolidation.

These powerful moves in MCHP, DIX, and ON Semiconductor highlight a critical trading strategy. After a stock breaks through a key resistance level, like a declining trendline, the most disciplined approach is not to chase the initial move. Instead, traders should watch for two things: first, a close above the breakout level to confirm the move's validity, and second, a subsequent pullback or "retrace" to that same trendline. When a former resistance level is successfully tested and holds as new support, it presents a much lower-risk entry point for the next leg higher.

Commodities and Crypto at Key Crossroads

Across the board, other key assets are also testing critical technical levels.

• Bitcoin: After yesterday's rejection from the upper portion of its parallel channel, Bitcoin found support precisely at the 50% median line on the 10-minute chart. For bulls, the mission is clear: a follow-up day with a close above today's high is needed to solidify this 50% line as a new, more durable level of support.
• Gold: The yellow metal printed a "doji" candle, a classic sign of indecision. Price is hovering directly on the 50% area of its parallel channel. Bulls need to see price move decisively away from this level toward the channel's top near $4,355 USD. A failure to hold here would likely trigger a move back down to the bottom of the channel around $3,992 USD.
• Natural Gas: On the weekly timeframe, Natural Gas has had a beautiful run, pushing up to tag the high pivot from March 2025. However, with the weekly RSI now overbought at 73.08, a pullback would not be surprising. The next major resistance sits higher at $5.54, but a healthy consolidation or a retrace to the 50% parallel line could occur before it attempts that next leg up.

A Viewer's View on Costco

A viewer request to analyze Costco (COST) provided a perfect case study that synthesized many of the day's themes. The chart is complex and telling. The good news for bulls is that the price has climbed back into the top half of its long-term parallel channel. The challenge, however, is that it has run directly into a significant declining trendline that has now been tested four times.

Each test of a trendline theoretically weakens it, increasing the probability of an eventual breakout. Should Costco manage to push higher and confirm a break, a retrace to the trendline could offer a buying opportunity with an ultimate target at the resistance level of $970.53. However, if this trendline holds as resistance yet again, support lies below at $853.88, followed by a more significant level at $787.00—a level derived from a past pivot high that has already proven its importance.

Conclusion: Navigating a Market of Rhyme and Reason

Today’s market action serves as a powerful reminder that while headlines and narratives may change, the charts are driven by a force that remains constant: human psychology. From the historical echoes in Silver to the precise geometry of a single trendline on ON Semiconductor, technical analysis provides a framework for understanding these repeating patterns.

The warning signal from the VIX suggests that now is a time for caution, not complacency. The explosive moves in individual stocks demonstrate what the market rewards, but also teach the importance of disciplined entries on breakouts and retraces. By studying the charts, respecting historical precedent, and maintaining a disciplined, probability-based approach, traders can position themselves to navigate the opportunities and risks that lie ahead.