GAME PLAN REVEALED: 07/18/2025

Earnings season is in full swing, and while many companies are reporting strong numbers, the market's reaction has been telling. As Gareth Soloway, Chief Market Strategist at Verified Investing, highlighted in this morning's GAME PLAN, a recurring theme is emerging: strong earnings are meeting even stronger overhead resistance. Stocks that have rallied significantly are now struggling to push higher, creating a complex environment for traders.

Today, we'll dive deeper into the critical resistance levels capping the major indices, analyze the paradoxical "sell the good news" reactions in stocks like Netflix, and break down key technical setups in individual names, crypto, and commodities. This is a market defined by probabilities, and the charts are revealing where the highest probability scenarios lie.

The Market's Wall of Resistance

While the market has shown resilience, it's now pressing against a formidable ceiling of technical resistance. This isn't just one trendline; it's a confluence of major levels on both the S&P 500 and the Nasdaq that suggests upside is becoming limited.

On the S&P 500 daily chart, Gareth has been tracking what he calls *"the three horsemen"*—a cluster of major ascending trendlines that are converging to form a powerful resistance zone. But another, more immediate trendline has become the focal point. This line connects the April 7th low with the June 23rd low. After breaking below this line, the market has rallied back to retest it from underneath.

"Look at where the high of this candle went," Gareth pointed out, "right back to that trend line, but it stayed below. So that's something that I'm going to monitor now, is that this trendline now becomes instrumental."

This retest and failure is a classic technical signal where prior support becomes new resistance. While a slow grind higher is still possible, this confirmed resistance adds a significant barrier to any explosive upward moves.

The case for a market top becomes even more compelling when we look at the Nasdaq. Using a parallel channel tool, we can draw a line connecting the March 2020 COVID low to the 2022 bear market low. Extending a parallel line from that to the 2021 bull market high creates a massive, multi-year channel. The 2024 bull market high tagged the top of this channel perfectly, and after the "liberation day" sell-off, we have rallied right back to it.

With the S&P 500 hitting multiple trendlines and the Nasdaq pressing against the top of its multi-year channel, the probabilistic outlook shifts. As Gareth assessed, there is a "70 to 75%, maybe even up to 80%" probability that we are closer to a market top than a bottom.

The Earnings Paradox: When Good News Isn't Good Enough

This earnings season is presenting a fascinating paradox. Companies are beating expectations, but their stocks are failing to rally. Netflix is the poster child for this phenomenon.

Last night, Netflix reported a great quarter. In the immediate after-hours reaction, the stock popped from its closing price to about $1,307. However, the gains were quickly erased as the stock plunged to a low of $1,234 before settling around $1,250.

"Netflix reported a great quarter, but the stock again is just too high," Gareth explained. "This has been a theme so far in earnings season, where almost every company is beating estimates, but the stocks have rallied so much... that we're seeing them still see mostly sell pressure."

Technically, Netflix was flashing a warning sign even before the report. A bear flag pattern—a sharp down move followed by weak, upward-sloping consolidation—was still in play. A daily close below the $1,245 support level would confirm the pattern and open the door to a potential move down toward the $1,180 target.

GE Aerospace provides another textbook example. The stock gapped up on great earnings, hitting a major long-term resistance trendline perfectly before sellers stepped in and pushed the stock to a small loss on the day. This isn't a massive sell-off, but it's powerful validation of how overbought conditions and technical resistance can neutralize even the best fundamental news.

Unpacking Key Earnings Movers

While some stocks are stalling, others are presenting clear technical patterns that offer a roadmap for future moves.

American Express (AXP): After reporting a solid beat ($4.08 vs. $3.86 expected), American Express is trading near a huge confluence of resistance. A double top formation around the $330-$335 level aligns perfectly with a retest of a major broken trendline. This creates a powerful resistance zone that could present a high-probability shorting opportunity if the stock pushes into that area.

3M (MMM): In contrast, 3M is displaying a bullish setup. The stock has formed a large inverse head and shoulders pattern, a classic bottoming formation. After breaking above the pattern's neckline, the earnings report is providing further upside momentum. To calculate the target for this pattern, you measure the distance from the low of the head to the neckline and add it to the breakout point.

"So your upside target, if this plays out to target, would be $186," Gareth demonstrated. This doesn't mean it will happen today, but it provides a longer-term objective over the next month or two. Interestingly, once such a target is achieved, it can often become a new area to look for a short trade as the pattern's energy is exhausted.

Crypto at a Crossroads: Key Signals to Watch

The crypto space is also at a critical juncture, with major assets running into key technical levels.

Bitcoin (BTC): The dominant signal on the Bitcoin chart is a bearish reversal candle known as a "topping tail." This candle is characterized by a long upper wick and a small body, indicating that buyers pushed the price up aggressively, only to have sellers take complete control and force a close back near the open. "This is what we call a topping tail. It is a reversal bearish signal until proven otherwise," Gareth stated. The signal is only negated if the price can achieve a daily close above the high of that tail. Until then, a slight negative bias is warranted.

Ethereum (ETH): Ethereum has had a strong move up, but a major resistance target is looming. A trendline connecting the 2021 all-time high with the 2024 high projects a resistance level just under $4,000. This level is further strengthened by a cluster of previous price pivots between $4,000 and $4,100, making it a significant hurdle for ETH to overcome.

XRP: The rally in XRP has been nothing short of spectacular, surging 92% from its June 23rd low. However, this parabolic move has slammed directly into a formidable multi-year resistance trendline connecting the high pivots from 2021 and early 2025. A pullback from such a significant level is highly probable, with the first major support zone located around the $2.95 to $3.00 area.

Commodities Corner: Gold's Strength and Oil's Weakness

The commodities markets are presenting diverging pictures of strength and weakness.

Gold: The price action in gold remains incredibly impressive. Despite a "risk-on" environment in equities, gold is stubbornly consolidating near its highs. This resilience suggests underlying strength. "The way it's acting is just continued credence that it is going higher longer term," Gareth remarked. Even if a 10% correction occurs, it would likely be a major buying opportunity against the backdrop of its powerful 75% run from the $2,000 level.

Crude Oil: Oil remains trapped in a bearish continuation pattern. After a sharp drop, the price has been chopping sideways in what is clearly a bear flag. While it could bounce a little more within the flag, the probabilities favor an eventual breakdown. The first major downside target remains at $63.75.

The Trader's Edge: Confirmation and Probabilities

Ultimately, navigating this market comes down to a disciplined, probability-based approach. The U.S. Dollar chart offers a perfect lesson in the importance of confirmation. The dollar recently broke above a key down-sloping trendline, but it has failed to get any follow-through.

"There's a difference between major and minor," Gareth taught. "When you don't confirm above a level, it tells us this line is still not really the greatest line in the sand." Without confirmation, the trendline is only minor support with a 50/50 chance of holding. If it had confirmed, it would have become a major support level, significantly increasing the odds of a rally.

This distinction is at the heart of the Verified Investing methodology. It’s not about hope, narratives, or preconceived notions. It’s about letting the charts dictate the probabilities and waiting for confirmation before committing capital.

Conclusion: Navigating a Market at an Inflection Point

The message from the charts is clear: the market is at a major inflection point. The S&P 500 and Nasdaq are testing a ceiling of heavy, multi-factor resistance. Earnings season is confirming this dynamic, with strong reports failing to produce sustained rallies in over-extended stocks. Key assets across the crypto and commodity spaces are also at critical decision points.

In this environment, discipline is paramount. Today is options expiration, which can add to volatility, but the larger technical picture remains the guide. By focusing on pure chart analysis, identifying high-probability setups where multiple factors align, and respecting the crucial role of confirmation, traders can navigate this complex market with clarity and confidence.