Dollar-Yen Collapse, Oil Keeps Pushing Into Key Jobs Report As Investors Trade Stocks, Gold, Bitcoin

My name is Gareth Soloway and I was a losing trader until I mastered technical analysis. Logic and charts beat hype and narratives every time. Now I teach investors the same techniques that made me a multi-millionaire. This is my trading game plan. Good morning everybody. Welcome to my trading game plan. My name is Gareth Soloway, chief market strategist here at VerifiedInvesting.com. So there is big action in the currency markets today. We're seeing the dollar-yen collapse. What that's telling us is that there is intervention actively going on in the yen to strengthen it, pushing the dollar lower. I want to start with that chart because it is a big deal. Take a look at the 10-minute chart here on the dollar-yen and look at the drop that we've seen in the overnight. Just continued grind lower and that tells you there's consistent intervention going on here. Now why is this going on? We'll look at the daily chart in just a minute because it had a breakdown with a bear flag going into this. It almost choreographed that this was absolutely going to happen. But the idea here is very simple. Yields. Yields are the root cause of basically every issue in the market right now. Yes, oil is high, no doubt about that, trading around $92 a barrel currently, but that's just adding to yield pressure because it's inflationary. So the idea here is this, is that Japan is the biggest holder of U.S. debt, so U.S. bonds. And because their currency has been weakening, it's forced the U.S. government to assist Japan in strengthening the yen. You can't have the yen ultimately collapse in Japan and Japan to strengthen the yen if the U.S. wasn't involved, what would they do? They would sell U.S. treasuries or bonds. What would that do to yields? It would spike yields even further. So the U.S. comes to the rescue and says, hey, listen, we will help you do this, just please don't sell U.S. debt on the open market to do it. We'll help you do it. In fact, the last time the intervention occurred, the U.S. sold euros and used that money to buy yen. So there's this basic back and forth going on where you're having a coordinated effort to strengthen the yen to essentially help Japan so that they don't have to drop or dump U.S. debt, which then causes or would cause a further spike in the U.S. tenure. It's remarkable. I mean, really, if you think about it, the inner workings going on right now, absolutely phenomenal. Now, if we look at the dollar yen, look at the drop yesterday. So someone knew yesterday this was going to happen. And then look at the collapse today. Monstrous two day drop. But bigger this. Remember, if you followed when we've looked at this chart over the last couple of weeks, we were talking about this major ascending trend line. Look at how every time you came into it, it worked as perfect technical support until it didn't. And when it finally broke, what type of pattern formation is this? You know, basically a little quiz for you guys to quiz yourselves on. Down move, breaking support, consolidation like that. If you go to a textbook under bear flag, that would be precisely that. So what does a bear flag tell you when you're making it? It tells you eventually the asset that we're looking at is going to have a fall. And that's exactly what's happened here. Notice where the dollar yen has fallen to. We take this low pivot and we drag a trend line right across. And lo and behold, we go right there, just right there. Look at that. Isn't it amazing how, you know, charts look so arbitrary sometimes and kind of like chaos, but there's actually sense that can be made out of them, which is why technical analysis amazes me. After twenty seven years, it still floors me how it works relatively well. Not all the time, but relatively well. Again, on the chart analysis side. All right. So dollar yen in freefall here. That means the dollar is weakening. So that should mean that if we go to the DXY, it should be weakening. And the answer is yes. Remember, yesterday we discussed this very chart and we discussed how we had support and a bounce came down, support, bounce, support. And instead of a sharp bounce, it bear flagged, broke. And then, look, same pattern inside bar consolidation yields a down move. We talked about this very setup in, I believe, just yesterday's game plan. So sure enough, the dollar is coming in. The chart helped us understand that was the most probable outcome. And again, it comes down beautifully now with that. So think about this. If the U.S. is involved with Japan to keep Japan from dumping bonds, if the U.S. gets involved enough, Japan says, all right, if you really help us, we will buy more U.S. debt. All right. So what do you think the 10 year yield is doing? The 10 year yield is falling today. Look at that. So we are backing off. Now, if you go to yesterday's game plan, and of course, these are all on YouTube for you to confirm, we said yesterday or I said yesterday that we had hit a double top short term on the 10 year yield. Okay. So the 10 year yield here, what does that tell us? And what was my exact quote yesterday is that resistance levels are to be respected until they break. In other words, resistance is resistance. It should reject price until it breaks. Then we say, okay, it broke. We step back. But it meant that I was talking about this and we talked about how I was still bullish on the S&P in the very short term because until resistance is broken on the yields, we should pull back on the yields. And if the yields pull back, what does the stock market do? Goes up, right? So there you go. So yields are pulling back today. What is the S&P futures doing? Look at this. S&P futures pushing up in the early trading session. So cool how it's all coordinated. Again, once you start understanding the nuances of this stuff, it doesn't listen. I still have my fair share of losses, right? I mean, I certainly am not a perfect investor or trader, but I will say that I've become the casino. Yes, I will lose just like a couple gamblers come into the casino and win, but over a maximum amount of trades, a hundred trades, a thousand trades, I am winning a majority of the time. And that's why it's because I've shut down my emotion and said, hey, listen, I'm not going to look at social media. And if I look at social media, you know what I'm going to do? I'm going to use it as a contrarian indicator. I'm not going to get caught up in the hype. I'm not going to FOMO in. I'm not going to fear and panic and sell at the bottoms. Instead, I'm going to go to the charts and let the charts tell me what to do. I don't tell the charts what to do. I don't tell anything. The charts tell me. And when we get to that point, we put ourselves on par with at least the bigger institutional money, which is always trying to bully the little investor, you guys out there and me to some extent. It's trying they're trying to bully us into doing the wrong thing at the wrong time. Essentially, what the big players want when they're looking at traders, swing traders, et cetera, long term investors, not so much, except in panics where even long term investors fret and sell at the lows, unfortunately, a la 2009. But basically, we're able to withstand the forces that they're they're pushing on us and actually step up to their level. Very cool stuff. All right. So back to the charts we go. We have the futures on the S&P pushing up. If we go to the S&P daily chart itself. Remember, I put in these little notes here bullish above this trend line. So still bullish on the S&P. We're up today in the pre market. If we break below this white trend line, I would go neutral on the S&P all the way down to the yellow line. And if we break the yellow line, that would be a major breakdown in the structure of the market. Now, some of you guys may be wondering, well, what do we do up here? Well, I have to wait and see if we rally all the way back to the highs. There's a chance I would swing trade a short there because remember, every time it's hit, it's pulled back. But I'd have to reevaluate at that a minute, right, or at that point when we're hitting that line. And I think that's important to understand is that the way a chart comes into a level is almost as important as the level itself. Like if a chart doesn't come into the level the right way, it could be a great level. And I still will be like, I don't like it. I'm going to stay back. And that's the discipline that allows me to understand that not all levels maintain their strength. Some resistances will weaken the way a chart gets up into the resistance. Some supports will weaken as the chart gets into those supports. These are all intricate details that when you study the markets and what I'm here to do is help you guys learn this stuff, you start to see what I'm talking about and do it for yourselves. Very cool stuff. All right. So we've looked at the S&P. We've looked at the dollar, the 10-year yield, the Japanese U.S. dollar, yen, which again, hitting technical support down here. I do want to move into stocks in motion because we did have a big earnings report yesterday from Broadcom. Now, Broadcom reported earnings. Their earnings were really, really good. Their guidance was great, but great doesn't cut it anymore with these AI chip makers. It was basically a little bit weaker, even though it was showing like crazy growth, like 200% growth. The guidance was just fractionally below the crazy bar Wall Street had set for it. So the stock is down. Last I checked here, let's take a look. Only down a little bit, but it is down nonetheless. Now, if we go to the daily chart in terms of the level for me today, I have a good level for a trade, might even be a good swing trade level here. That basically is this gap fill. So we can see here there's a gap from the close here to the open. It creates a gap. And then so that would be filling the gap if we come back down here. Price would have filled the gap. And then interestingly enough, notice it says If I take my low here to my high and we just drag it across, the 786 aligns almost to the penny with that level. Now, in technical analysis, one of the key metrics is that one level is good. It's good. You know, maybe a little bit more than 50-50 odds of the level working in your favor. If you can get two factors, you push yourself up towards 70% success rate, right? And that's really, you know, once we get 70-75% success rate, that's where you become the casino, right? Where you're like, okay, if I do 100 trades, I'm winning 70-75 times. If I do 1,000 trades, 700-750 times. That's where we want to be. That's the zone. Now, can we get it to 80%? Yes. You know, you need multiple more factors aligning, but it gets hard to get it up there because the market can do things that you don't expect. And you always have to build that into your equation when you're looking at factors and probability. All right. So Broadcom here, guys, if it gets down to this level here at 333, still quite a ways away. I don't think it will get there today, but if it does, that would be a really good trading opportunity. Aggressive traders, there might be a scalp around 342.60, which is the low from the gap up day. Again, that would be only for aggressive day traders. Snowflake, wow. What a rip-roaring rally on Snowflake today. Monster earnings, monster guidance. Obviously, the stock having a huge move. The stock right now is up a whopping 24%. Now, daily chart, where are we day trading this? Where would we short? All right. So again, the stock's already up, so I'm not chasing it, right? Again, I'm not going to pay up. I don't go to the supermarket and say, hey, a gallon of milk is now $20. Let me buy five of them. We don't chase price. We say, no, we're disciplined. All right. If it pulls back, I might be a buyer. But if it goes up enough, I know price in general will have a retracement to essentially a key level. So right now we have double top from this pivot from 2021 between 403 and 405. I will be eyeing that one as an opportunity for an intraday short. I don't think I'll swing trade it there. Swing trade more likely would be a double top over here from 2020 in December at around $430. Network Appliance or NetApp dropping on earnings here today. Not a huge company, but nonetheless falling. There's obviously a monster gap. Look at the size of this gap. That's a crazy gap right there. But basically back to about 143 to 142, there might be a scalpable level around 150 to 151 right here, this pivot low. I could see myself maybe day trading that pierce of the even number because the even number is there as well. We can also do our fibs. I didn't do this before, but you have your low pivot here all the way to your high. And interestingly enough, look, 50 percent retrace right there around that 150, 151 level. So, yeah, there might be a quick day trade there. Certainly not a swing trade until at least the gap fill down here at 142. All right, let's move on to commodities. Gold intraday surging as yields pull back. Remember, I told you guys about this. You go back a few days, we talked about this key technical level and how gold should get a bounce to the upside and look at the bounce that gold has seen. Notice yesterday yields were down on again. What does gold do? It rips right to the upside. So really, that's the game plan here. It's simply put. Obviously, the dollar weakness is helping, but those are kind of coordinated. But dollar or or or yields on the 10 year down, gold is generally going to trade up at least for now. So gold rallying up beautifully again. Good. Look at the technical level of support here. Beautiful little level right there. Good bounce. Big drop into it. And again, a catalyst for the upside. Minor resistance will come in right here at around forty five twenty on gold. Now, one thing we do want to follow on gold. Could we be making a little bit of a head and shoulders pattern? Maybe it's something that is just potentially forming. But if we were to roll over again, I'd be worried if we break this line, you get quite the move down. Likely this would take us back to four thousand dollars. Now, granted, this this right shoulder is is not even formed yet. So we don't know. I'm just overall just warning as a technical trader. I'm always looking for potential setups. Now, they don't trigger me to do anything like I'm not shorting gold because of this. But what I do is I make a mental note to keep it on my watch list. I say, OK, well, you know, this is a pattern that has two thirds of it formed. We still need the final one third, the final shoulder. But if that were to form, I need to be aware of that because it will give me a trading opportunity in the future. All right. So keep an eye on that silver today. Same thing. Nice little bounce to the upside came right into pivot support levels. Notice high pivot broke out, consolidated, pushed up, retraced into that level, getting a technical bounce there. Crude oil. Let's look at crude oil here. Crude oil was up substantially, making a new high around ninety three dollars a barrel. Notice where did it go? It went right into this pivot top. It is pulling back now. Still green on the day, but it is pulling back. I'm actually a little bearish on oil here. I think oil is going to at least come back into this eighty four dollar level, which honestly from here is a pretty good pullback. So again, watch for a pullback on oil to about this level. One of my favorite shorts remains Valero, Valero, which right now is trading up about a buck fifty pre market. Look at this trend line here. And this is more of a swing trade. But Valero again into major resistance, extremely extended, starting to put in negative divergences. I do think that this refiner is due for a significant correction on a swing trade basis. And I do have a position in this one on the short side with members of Now going to natural gas now gas. Remember, I've been bullish on it since that breakout. And sure enough, we're seeing it today just fractionally down. But look at this nice move up. And then you can see very clearly we're just hammering on this level, basically the three dollar pivot point here. Let's see if we can get above that. If we get above that, we should head to about three fifteen on natural gas. Remember, seasonality. We also get inventories today at 1030 a.m. Eastern time. So that will be a key factor to watch. Speaking of data numbers, we did get jobless claims today, but they were nothing to write home about. Two hundred and three thousand, I believe, or maybe two hundred and five thousand, whatever the number was. It was very, very low. Again, nothing below two hundred and fifty thousand in terms of people filing for unemployment gets my attention economically. That's very low historically. Again, nothing to write home about. All right. Lastly, let's look at Bitcoin here. Bitcoin is hovering and pushing up a little bit. We're still kind of holding this general structure. We do have a short term bearish pattern, but the bigger pattern is now developing into a more bullish pattern. So let's keep an eye on this. You have a cross current here. We have a short term bearish with a longer term macro bullish. Generally, the macro pattern by macro, meaning big, micro, meaning small. The macro pattern is generally going to control the bigger move. So as it continues to form here, you know, we got a little bit of a pullback. I was able to capture some shorts gains on shorts in the crypto markets in smart money, crypto and verified investing my premium subscription there. But now it's getting to be more of a if this continues sideways, it could be setting up for another leg higher. Where could that go on Bitcoin? Well, potentially, if we take out this high pivot here, we could be headed back into the ninety thousand range on Bitcoin. So again, we'll watch it very closely. But you can see here when we zoom out, you know, you have the bear, the short term reversal candle here. But the bigger pattern is up and now sideways consolidation. And this is amazing because this shows you how every day we get a new candle and every day it's a new piece of the puzzle. And so, you know, days ago it could have looked like, oh, look, it's an animal. Maybe it's a dog. Maybe it's a cat. Now it's starting to formulate. Oh, well, maybe it is a dog. Maybe it's this type of dog. You get more information. And I think that's really important to understand is that you as an investor, as a trader, you need to be able to be flexible. OK, you have to be able to say, no, now this is a this was a bearish pattern. Now it's a bullish pattern or, oh, this was support. Well, now it's turned into resistance. You have to be able to do that. You learn that stuff. You become humbled by the market enough. The market forces you to learn it. Either way, it's the key to success in this game. All right. Go have a great trading day, guys. Thank you guys so much for your kind words, your comments, your shares, your likes, all of that stuff. Make sure to follow the channel so you understand when all of our other amazing shows we have multiple shows, by the way, not just the game plan throughout the day. We have amazing shows, other traders that are hardcore technicians do them. They are amazing at what they do. So make sure to look those up. And if you follow the channel here, Verified Investing, you'll get updated on those as well. Have a great rest of your day. Now let's go make some money. Take care.