Trading The Close Market Recap - 12/10/2025: Fed-Fueled Rallies Send SMH & IWM to All-Time Highs; Silver Hits 40-Year Trendline

In a market session supercharged by the latest FOMC announcement, traders witnessed a surge of activity that sent key indices to new all-time highs and pushed individual stocks to incredible single-day gains. The Fed’s actions acted as a catalyst, turning potentially bearish setups on their head and rewarding disciplined bulls. In this afternoon's Trading The Close, Pro Trader Drew Dosek of Verified Investing dissected the explosive moves, highlighting critical resistance levels, the enduring power of decades-old trendlines, and the subtle clues that separate high-probability setups from dangerous traps.

All-Time Highs and the Need for Confirmation

The semiconductor sector, a key barometer for market health and technological innovation, put on a stunning display of strength. The VanEck Semiconductor ETF (SMH), which was trading at just $314 USD on November 21st, has rocketed 60 points higher in a matter of weeks. Today's session saw it not only reach the other side of its parallel channel but also close at a new all-time high. This type of rapid ascension is a testament to the powerful momentum currently driving the market.

However, as seasoned traders know, one day does not make a trend. As Drew pointed out, the critical question now is whether this breakout can be sustained. “This is one day closing above, can we follow it up with the backup move tomorrow? Then we'll start planning potential targets for a move in the very near term.” This emphasis on confirmation is a cornerstone of disciplined trading. A breakout on high volume that is followed by another positive close or a successful retest of the breakout level provides a much stronger signal than a single-day spike that could easily reverse. For now, the larger bull flag pattern on the S&P 500 (SPY) still points to a potential target of 412.94, but confirmation from leadership sectors like semiconductors is crucial.

Similarly, the iShares Russell 2000 ETF (IWM), which tracks small-cap stocks, benefited immensely from the prospect of capped or lower interest rates. The IWM surged to its own new all-time high, validating a short but potent bull flag pattern that had formed over just three days of consolidation. This powerful move suggests that the next major resistance target lies just over $260 USD, a level that could be tested by the end of the week if momentum continues. The synchronized move to all-time highs in both large-cap tech (via SMH) and small-cap domestics (via IWM) paints a picture of broad market participation, a healthy sign for the bulls.

The Unwavering Power of a 40-Year-Old Trendline

While new highs dominated the headlines, one of the most profound technical lessons of the day came from the silver market. Silver continued its recent surge, but its rally came to a screeching halt at a level of immense historical significance. The high of the day for silver was $61.94 USD, just pennies shy of a trendline sitting at $61.97 USD. What makes this trendline so remarkable? It originates all the way back in 1980.

This scenario often raises a valid question from newer traders, which Drew addressed directly: “Drew, what does a trend line have to do with now in current times? Do your TA, understand, draw these trend lines. We're still, even though we may not be the same people trading these charts that were trading these charts back in the 80s, guys, it's all human psychology and human emotions. When you see these patterns develop, they can last and go on upwards of multiple decades just like this trend line is showing.”

This is a masterclass in the principles of technical analysis. Markets have memory, not because the charts themselves remember, but because human behavior—driven by the timeless emotions of fear and greed—is remarkably consistent. A trendline that has been respected for over four decades represents a major psychological barrier. Generations of traders and algorithms have recognized this level, creating a self-fulfilling prophecy of supply and demand.

As if the multi-decade resistance wasn't enough, the weekly Relative Strength Index (RSI) for silver is screaming a warning. At a reading of 84.35, it is far above the traditional overbought threshold of 70. This confluence of extreme overbought conditions and a historically powerful resistance level creates a very high probability for a pullback or consolidation in the near term. The euphoria that drove silver to this point is likely to simmer, providing a stark reminder that even the strongest trends encounter formidable obstacles.

Precious Metals, Bitcoin, and the Dollar: A Divergent Story

While silver was hitting a wall of resistance, gold continued its pattern of "bullish consolidation." The fact that gold has refused to break down further after its recent run is a sign of underlying strength. This constructive price action suggests that gold has a good chance to move higher and retest its all-time highs near $4,380 USD, which conveniently aligns with the top of its current parallel channel. The contrast between gold’s patient consolidation and silver’s euphoric spike offers a fascinating look at the different personalities of these two precious metals.

Meanwhile, Bitcoin remains in a holding pattern. For weeks, the story has been the same: the 50% midline of its parallel channel is the "line in the sand." Price has been hovering in this zone for nearly a month, but historical precedent shows this is not unusual. The last time Bitcoin reached this 50% area, it consolidated for about two months before making its next decisive move. This context is crucial for managing expectations. Traders looking for immediate resolution may be frustrated, but the chart is simply building energy for its next major leg, whether up or down.

The driver behind much of the action in commodities was the sharp drop in the U.S. Dollar Index (DXY). The FOMC's announcement, implying more money creation to purchase securities, inherently devalues the dollar. A weaker dollar is typically a tailwind for hard assets like gold, silver, and Bitcoin. While gold and silver clearly benefited, Bitcoin’s sticky price action suggests it is currently more influenced by its own technical structure than by currency fluctuations.

The Danger of a "Teased" Support Level

The energy sector provided another subtle but critical trading lesson, particularly in Natural Gas (NatGas). After a steep sell-off, NatGas found its footing today, but not at the ideal technical level. Drew had identified solid support at $4.23 USD, but buyers jumped in early at $4.27 USD, pushing the price back up to $4.43 USD. While this may seem bullish on the surface, it creates a precarious situation.

As Drew explained, this is a classic case of a "teased" level. “Whenever levels get very close to being hit and then get a small bounce, their next approach likely will plunge through the level. So if you're a bull, you would have rather seen price come straight into that level, buy it, that way that level's done, and then price can move up higher rather than teasing it like what happened today.”

This insight into market mechanics is invaluable. A clean tag of a support level allows for a definitive test where demand overwhelms supply, clearing the way for a more sustainable bounce. When a level is merely approached and then bounces, it leaves unfinished business. The sellers who were waiting at the true support level never got a chance to be absorbed by buyers, meaning that supply is likely still lurking just below. The next trip down to that area is therefore more likely to break through as the "teased" buyers from the initial bounce may turn into sellers themselves.

Navigating Earnings and Upgrades with Caution

Individual stocks provided no shortage of drama, from incredible breakouts to shocking reversals. GEV surged an astounding 15.62% on a "trifecta of good news," including a double dividend, increased share repurchases, and a stronger long-term outlook. The move sent the stock to new all-time highs, but like SMH, it now needs a confirmation day to prove the breakout is legitimate. Support for any near-term selling now sits around the $700 USD mark.

General Motors (GM) also had a powerful day, rising 4.72% on an analyst upgrade and news of relaxed emissions standards. The stock has been on a tear, rallying 29% since late October. However, Drew pointed to the weekly chart to issue a word of caution. GM has broken above a long-term inclining trendline in a "very vertical fashion." “Whenever stocks do things like this, we can hang out for a while, but then they end up reversing. So be careful if you're an investor here.” This is a classic warning against chasing parabolic moves. While the next technical target could be around the $86 USD level, the risk of a sharp reversal has increased significantly.

On the other side of the coin, Chewy (CHWY) served as a painful example of a post-earnings "rug pull." After a double beat sent the stock soaring in the pre-market, it failed to reach a key resistance zone around $38 USD—a level Drew identified as an "x marks the spot" where multiple trendlines converged. Instead, sellers took control, and the stock reversed, losing all its gains and filling the gap from before its earnings report. The failure to even test this major resistance confluence is a bearish signal, indicating that the established downtrends remain firmly in control.

Finally, Netflix (NFLX) was a big loser among mega-caps, plunging 4.14% and breaking through the 50% area of its parallel channel. With the daily RSI now in oversold territory at 26.17, the stock is due for a bounce. The most logical place for that bounce to occur is at the next major support level of $88.04 USD. This area presents a potential trade setup, as broken technical levels are often retested from the other side. A bounce from $88.04 USD could target the underside of the recently broken channel midline.

Conclusion: Riding the Fed Wave with a Technical Roadmap

Today's market was a powerful reminder of the old adage, "Don't fight the Fed." The central bank's announcement provided the fuel for broad-based rallies and record highs. However, it also pushed many assets into critical technical zones that demand caution and discipline. From the multi-decade resistance in silver to the parabolic moves in individual stocks, the market is presenting both incredible opportunities and significant risks.

By applying a rigorous, multi-factor technical approach, traders can navigate this environment with clarity. Understanding the need for confirmation after a breakout, recognizing the psychological power of long-term levels, and identifying the subtle differences between a strong bounce and a weak one are the skills that create a sustainable edge. As we look ahead to more earnings reports and market follow-through, the lessons from today's session provide an invaluable roadmap for what comes next.