GAME PLAN REVEALED: 07/18/2025
After a whirlwind week of economic data, including key inflation reports from the CPI and PPI, the market finds itself at a fascinating and precarious juncture. Earnings season is in full swing, but a curious pattern has emerged: companies are reporting strong results, yet their stocks are struggling to advance. This paradox was on full display with Netflix’s report last night, a theme that Gareth Soloway, Chief Market Strategist at Verified Investing, dissected in this morning’s GAME PLAN.
As we head into a Friday options expiration, the major indices are pressing against a formidable ceiling of technical resistance. Today, we’ll expand on Gareth’s analysis, diving deep into the multi-factor resistance confronting the S&P 500 and Nasdaq, exploring the “sell the news” phenomenon gripping earnings season, and highlighting actionable trade setups in individual stocks and cryptocurrencies.
The Market's Wall of Worry
While the market has shown a relentless ability to grind higher, it is now contending with a confluence of technical resistance levels that are difficult to ignore. This isn’t about a single trend line; it’s about multiple, significant barriers aligning on both the S&P 500 and the Nasdaq 100.
On the S&P 500 daily chart, a cluster of trend lines, which Gareth refers to as the “three horsemen,” creates a powerful overhead supply zone. But the most critical level in the immediate term is an up-sloping trend line drawn from the April 7th low, which precisely connected with the low on June 23rd. After a brief close below this line earlier in the week—a breakdown that failed to see bearish confirmation—the market has floated back up, only to find this same line now acting as staunch resistance.
"Look at where the high of this candle went right back to that trend line, but it stayed below... Could we continue to grind? Absolutely. But this trend line, if we extend it even further, it adds additional resistance to the S&P."
This grinding action, characterized by slow, incremental gains, is distinct from a market that is “ripping” higher on broad momentum. The grind suggests a struggle, a climb up a wall of worry where every step is hard-fought. The sheer density of resistance overhead makes a powerful, explosive breakout less likely.
This thesis is powerfully reinforced when we turn to the Nasdaq 100. Using a parallel channel tool, a massive structure becomes clear. By connecting the COVID low of March 2020 to the bear market low of 2022 and extending that parallel to the bull market high of 2021, we find a channel that has defined the market’s macro movements. This same upper boundary marked the precise high in 2024 before the significant “Liberation Day” selloff. Today, the Nasdaq is right back at this monumental resistance line.
When the S&P 500 and the tech-heavy Nasdaq are simultaneously testing multi-factor, long-term resistance levels, the probability of a pause or reversal increases dramatically. As Gareth noted, there is a 70-80% probability that the markets are near a significant top, suggesting that risk is skewed to the downside from current levels.
The Earnings Paradox: When Good News Isn't Good Enough
This earnings season is teaching investors a valuable lesson: fundamentals are only part of the equation. Price and positioning matter immensely. We are repeatedly seeing companies beat earnings expectations, only for their stocks to falter.
"This has been a theme so far in earning season, where almost every company is beating estimates, but the stocks have rallied so much in the last quarter... that we're seeing them still see mostly sell pressure."
Netflix is the poster child for this phenomenon. The company reported a great quarter, and the stock initially popped to around $1,307 in after-hours trading. However, that strength was quickly sold, with the price dropping to a low of $1,234 before settling around $1,250 pre-market. Despite the good news, the stock was poised to open down on the day.
A key detail from the earnings call, which many investors might overlook, was the source of this strength. Netflix attributed a significant portion of its strong numbers to currency tailwinds from a weaker U.S. dollar. When a multinational company converts revenue from foreign currencies like the Euro or Yen back into dollars, a weaker dollar means they receive more dollars, directly boosting their bottom line. This isn't necessarily a reflection of surging business growth, but rather a benefit of currency fluctuations. This creates a potential vulnerability: if the dollar strengthens, this tailwind could become a headwind in future quarters.
GE Aerospace provides another textbook example. The stock gapped up on fantastic earnings, but it opened directly into a key resistance trendline. The stock was unable to hold its gains and posted a small down day, validating both the power of the technical level and the overbought nature of the market.
Actionable Setups: Financials and Industrials
Amid the broader market chop, specific stocks are presenting clear, high-probability setups for disciplined traders.
American Express (AXP): After reporting a solid earnings beat ($4.08 vs. $3.86 expected), American Express is trading slightly higher. While the stock has had a massive run off its lows, Gareth identified a powerful potential short-trading setup. A rally into the $330 to $335 zone would run into a confluence of two major resistance trendlines, including a retrace to a prior breakdown point (the scene of the crime) and a level that would mark a double top. This multi-factor resistance creates a high-probability zone for a reversal.
3M (MMM): 3M, which hasn't been as extended as other names, is also up on earnings. The daily chart reveals a classic inverse head and shoulders pattern—a bullish formation. Gareth provided a masterclass on how to use this pattern to identify future opportunities. By measuring the distance from the low of the "head" to the "neckline" and projecting it from the breakout point, the pattern gives a calculated upside target of $186.
The professional insight here is what to do with that information. For a swing trader, the play isn't necessarily to buy the breakout and ride it to the target. Instead, the target itself becomes the next major resistance level. Once a bullish pattern is completed and the target is achieved, the move is often exhausted, presenting a potential opportunity to initiate a short position.
Crypto at a Crossroads
The crypto markets are also flashing critical technical signals after a period of strong performance.
Bitcoin (BTC): The dominant feature on Bitcoin's daily chart is a massive topping tail candle. In technical analysis, this is a classic bearish reversal signal that remains valid until the high of that candle is decisively broken and closed above. The recent passage of crypto legislation in the U.S. produced no significant rally, indicating the news was already priced into the market. For now, the chart dictates a slight negative bias as long as the price remains below the high of that topping tail.
Ethereum (ETH): Ethereum has had a strong move but is approaching a significant resistance zone. A trendline connecting the 2021 all-time high with the 2024 high projects a target just under $4,000. This level is reinforced by a cluster of previous pivot highs between $4,000 and $4,100. This area represents a major hurdle where a pullback would be highly probable.
XRP: XRP has been on an incredible tear, rallying an astounding 92% from its June 23rd low. However, this parabolic move has slammed directly into a formidable multi-year resistance trendline connecting the high pivot from 2021 with the high from January 2025. After such a run into major resistance, a correction is technically expected. The first major support area to watch on a pullback would be around $2.95 to $3.00.
Commodities: Gold's Resolve and Oil's Bear Flag
Gold: In a risk-on market environment where stocks are grinding higher, gold’s behavior has been nothing short of impressive. It has remained stubbornly firm, consolidating its recent historic gains. As Gareth put it, "It's honestly impressive, impressing me to the nth degree." This resilience lends credence to the long-term bullish case. Even if gold experiences a 10% correction, that would likely represent a prime buying opportunity for long-term investors.
Silver: Silver is creeping higher, approaching a long-term resistance trendline just above $39. A confirmed break above this level would signal the start of the next major leg up, with potential targets at $44 and then the $48-$50 double top region.
Oil: Crude oil remains contained within a bear flag pattern. After a sharp drop (the flagpole), the price has been chopping sideways in a narrow range (the flag). Probabilities favor an eventual downside resolution, with the first major target at $63.75.
The Trader's Edge: No BS, Just Probabilities
The most valuable takeaway from today's analysis is the methodology itself. Successful trading isn't about hope, hype, or narratives. It’s about a disciplined, evidence-based approach to the charts. The U.S. Dollar chart provides a perfect case study in the importance of confirmation. The dollar broke above a key trendline but failed to get a confirmation close on the next candle. This failure meant the trendline was only minor support—a "weak fence" rather than a "brick wall"—and it subsequently failed.
This is the core of the Verified Investing philosophy.
"Here at Verified Investing, it's very important to me because this is what I wish I had when I was a new investor that we focus on the charts, no BS, just charts which equal probabilities."
Conclusion: Navigating the Chop with Clarity
As we close out the week, the market is sending clear signals. Major indices are straining against a ceiling of resistance, the initial euphoria of earnings season is giving way to the reality of overbought conditions, and specific assets across stocks, crypto, and commodities are at critical inflection points. With options expiration today and a Fed meeting looming, volatility could pick up.
By focusing on the charts, understanding multi-factor analysis, and respecting the laws of probability, traders can navigate this complex environment with confidence. The setups are clear, the risks are defined, and the disciplined investor has a distinct advantage over those chasing narratives.
