Earnings Surge, Inflation Data Release, S&P Bull Flag About To Breakout, Here Is The Target

[00:00:00] Speaker 1: My name is Gareth Soloway, and I was a losing trader until I mastered technical analysis, logic and charts be hype and narratives every time. Now I teach investors the same techniques that made me a multimillionaire. This is my trading game plan. Good morning, everybody. Welcome to my trading game plan. My name is Gareth Soloway chief market strategist here. And of course, we're going to dive into the data which was just released. The CPI data just hit the markets. Inflation basically in line with estimates. Let's take a look right now. Take a look at what we have here. So if you look at the numbers, headline CPI month over month came in at plus 0.1%. Headline year over year plus 3.4%. With core plus 0.2, that's month over month and year over year 2.5. So keep in mind, look at the next column over every single number was in line with estimates. So right off the bat, the markets are kind of breathing a little sigh of relief since we did see oil uptick over the course of that. Now below you have the key drivers in this infographic. Shelter up one 10th. That's two thirds of the monthly gain is just that shelter uptick. Energy was down. We did see gasoline coming down over the course of the last month. And again, look at that number below 24.6% year over year increase. Then you look at food. Food was up 0.1%. But if you went out to eat food away from home, it increased 0.3%. This is the big one here. Airline fares up 2.2%. Look at that year over year gain up 25.5% on airline tickets and fares. Medical was up 0.4%. Unfortunately, that seems to be the norm. And motor vehicle insurance fell 0.3%. So interesting to see the numbers. The point here is that what we're seeing in the markets is a little bit of relief that the inflation numbers came in essentially in line with estimates. The kicker here for me, the most important thing is what is the dollar doing? What is the 10 year yield or interest rates doing? And what is the Federal Reserve FOMC tool? The Federal Reserve FOMC tool telling us about a September rate hike or no hike? Let's go take a look at the numbers. Now, before we do that, keep in mind that going into this, it was 50 50. Now, last week, it was slightly favoring no hike in September because we hadn't had the spike in oil that we've seen over the last few trading days. As oil has gone up, the odds of a rate hike versus no rate hike for September were basically 50 50. Let's see what the numbers are telling us as of now. And right here, folks, take a look. It is now flipped back based on this inflation data to at this point, a slight favoring of no rate hike in September, the September 16th meeting, which is basically one month away from the current date now, right? But what do we do? By the time we get into Monday, that'll be one month away. So 55.9% probability that there will be no hike in interest rates versus a 44.1% chance that there will be a hike. Notice, though, that still if there's no rate hike in interest rates versus a 44.1% chance that there will be a hike. Notice, though, that still if there's no hike in September, the odds are slightly favoring a hike in October. But like I said, guys, and I've been very clear on my personal views here, is that I believe that there will be no hikes. I know the Fed has been talking a tough game. Talking a tough game. And Kevin Warsh, the new chair is trying to establish that independence. But when it comes down to it, I believe what the president said, and I think the president would be furious if the Fed raised rates, especially after the recent jobs data. Now listen, if we get next month's jobs data, which we will get before the next Fed meeting, and it's really great. Okay, maybe at that point, but to see the labor market weakening slightly. That's a tough sell to up interest rates into that. Now the bond market frankly doesn't care. And we'll look at that as well. Alright, so let's go into the charts. As always, we talk about charts and data, which is what I focus on here. We'll look at trading levels from major earnings releases, including CoreWeave, CoreWeave, Kava, SMCI, NBIS, all popping dramatically on earnings. And then of course, what's gold and silver doing? Is the rally continuing here on those? And of course, we'll look at Bitcoin. Now, let's jump into it right now. Let's take a look at the S&P futures. You can see the S&P futures overnight were basically sideways and then started to float up. And then we got the inflation data and the markets are liking it. Why are the markets liking it? Very simple. Look at the dollar. This is the 10 minute chart of the dollar. The dollar is falling. In fact, it's right into major technical support on the daily chart. We'll look at that in a second. But remember, the market wants two things. Well, the market just really wants free money. Free money. And not that that's good for you or me because it causes inflation and it causes, you know, essentially, you know, bubbles. But the market likes it because it means money is cheap. Money can be borrowed cheaply and ultimately more money can go into the stock market, right? Interest rates coming down mean that there's a better offset. Do I invest in bonds and make 5% on the 30 year or, you know, 4.7 on the 10 year? Or do I go with the stock market? The lower rates come, the stock market looks more attractive. It sucks money away from the bond market. So the market likes that. The dollar again is declining. Let's look at the daily chart. Look at where we are, guys. Remember, we discussed this trend line in just the previous few videos. We came into it. We came into it. We bounced, but we've been now consolidating. Is the US dollar about to break down here? If it starts to break down, I think it's a slippery slope. I think you'll get bounces. But my guess is, again, this is telling us that smart money in the bond market, in the forex market is saying, nope, there's going to be no hike in September and ultimately maybe none the rest of the year. I actually think there'll be rate cuts in 2027. All right. Look at the 10 year yield. 10 year yield on the daily chart is down today. We're trading at 4.656%. And you can just see right here that again, we've continued really from that data point. We've started to come down a little bit more, almost as if, by the way, the 10 year was already falling going into that number, almost as if smart money knew the number ahead of time. Not saying they did, but certainly the price action lends me to think that that is a possibility. All right. So the 10 year yield is coming in, interest rates coming in, the dollar coming in. And of course, going back to the S&P futures, that's helping us rally to the upside. Daily chart, you guys know what we've been discussing, right? Was this a bullish consolidation pattern? All right. You had the up move off technical support into resistance on the daily S&P chart. And then really, even with some semi bad news, oil going back into the mid eighties, I mean, all of these things. And did the markets really fall much? No, they kind of stayed sideways. And now you're getting a positive view, the yields falling, the dollar falling, core weave earnings. So AI stocks are hot today. Can it be enough to cause a breakout in the S&P 500? If we do, there is a possibility within a couple months, we could be at 81 to 8,200 on the S&P. Granted, that's only about a 6% move up. So it's not a massive move. But still, that's a good solid gain over the course of the coming couple months. Do I think that becomes a major top? I do. I do. And I talked about this earlier, I think on Monday's video, looking at the M2 money supply via the S&P 500 and how that would hit the parallel channel on that S&P to M2 from the dot com high. Very powerful signal based on money supply, which you could argue is one of the biggest factors in driving markets up is the more money in the system, a certain percentage of it goes to the stock market or goes to assets just in general. You know, look at housing, look at all of these things. I mean, it's ridiculous because again, as soon as we decoupled and you can look at this, look at the data. In fact, we had, we had major analysis that showed the dollar since it decoupled from gold, since it was no longer backed by gold, it has lost 75% of its value. As soon as they cut it away, because what does it do? As soon as you take away the backing of gold, like a dollar is X amount, it's tied to gold. It allows governments to print ad nauseam. And that's the degradation of a fiat currency is once you don't tie it to something, a physical asset. Guess what? The, the, the, it's, it's already in the final chapter in the book is already written. We just haven't gotten there yet. All right. Uh, let's go to a couple of things here. Core weave earnings this morning. Uh, you could see what a rally on core. We've almost up 20% this morning. Take a look at this guys. This is my big level of the day. Uh, there's a three factor pivot point. You have a descending trend line pivot high. And also a 618 fib from this high to this recent low. That's right here at this level there. So again, watching this, this should be a big level at 122, uh, as resistance. Now we're still a ways away at 107, but if it does get up there, I actually like that substantially SMCI. Their guidance was terrific. Almost basically 35, 40% above consensus forecast for their guide. The stock is ripping to the upside today as well. Again, this stock has been kind of beaten down though. If we look at this, but is having a resumptive move. The first level I might day trade would be around 3675, this pivot high, this pivot high. Then if it continues up, there'll be another level at 3815. And then the big one is obviously at $40 and 50 cents. I doubt it gets to that today, but that would be a huge level. I'll probably, you know, mess around with a small position at this first level. If it gets up to that point. Um, yesterday after hours, we had Kava report earnings. They also had decent earnings here. And also it was the guidance, right? The CEO talked about how, you know, the middle income is starting to come back to Kava restaurants and spend money again. And so little things like this are helping. Remember this used to be a sky high stock and it really got beaten down. If we look at the daily chart, you can see again, what I'm talking about all the way back here. Then it had a big bounce. Then it's come back in, but this was this one point was $160 stock. Now, again, it's trading up decently. Where is my first level of resistance? Aggressive traders can look at this pivot top around 74 40. I'll probably be eyeing this area around 76 75, a little bit more closely. So those are your two key levels on Kava, uh, NB is NB is great earnings reported this morning yesterday after hours on core weave. It was already rallying this stock again up nearly 20%. Now it has been beaten down off recent all time highs. You can see again, if you're aggressive, there's going to be a very good level around 2 to $230. Uh, again, that's an aggressive level. You might say, well, why it's got three pivot points? Well, because you're basically already there. So the idea is at the open, you might see short covering. You could see a pop through it. There's no doubt it could continue up. I'll start eyeing this around the 2 40 Pierce right in here, 2 40 to 2 41 as a day trade only on a swing trade basis. It would have to fill this gap up here where we close the day here. And we had this huge gap down the next day to basically from 2 75 down to 2 40 before this fall ensued, right? So this would be more of my potential swing trade level versus this is a day trading, a higher risk level there. All right. So again, we have earnings notice how all the major earnings today generally were good news. And they're generally aside from Kava, they're all in the AI space, the build out space, the hyperscalers. And so what this is going to do is this is going to give a resumption to the bullish momentum in the semiconductors. So you'll likely see Sandisk, Micron, all of those names catching a bid today on the back of that, plus the markets are up. So in general, you're getting that excitement back for the AI trade. Okay. So again, great fall in the AI stocks. But remember, nothing goes straight up. Nothing goes straight down. You're going to get bounces, the resumption, the excitement is going to come back. We'll see if the S&P, like I said, does it break out today? We'll be watching gold today, pushing up, trying to break through resistance. There's a lot of resistance still here in this general vicinity. So I'm going to keep an eye on that. I'm also keeping an eye on GDX, which is having a great move to the upside. So I'll continue to monitor. There is a resistance level around 94 on GDX if it continues up. Look at that rally on the miners ETF. Silver pushing up, although it's below yesterday's highs. This one again has broken through this descending trend line. So what this means is that we can use this as a viable opportunity. Should it come back in here ever back to this trend line, that would be a retrace to the scene of the crime. All right. So again, I'll be watching this and keeping an eye on it in case we do start to see selling in the coming weeks on silver or gold for retraces following their recent breakouts. We talked about crude oil earlier, obviously Iran and the US no closer to any deal. But what I think is interesting here is you're just stuck in a holding pattern, right? Which is kind of where negotiations are. There's no additional missiles being, you know, you did. There was a scenario where apparently there was a ship that was struck, but it's the US and the president. President Trump has basically said, we don't have the weapons to fight right now. So we're just going to do economic sanctions. And therefore, it kind of just is a stalemate. The straight's not open, but there's enough oil from the US and going around the straight to still keep things in this range. Um, but it, but as is in essence, that's what the wedge patterns telling us wedge pattern means price is just going to stay in here and get tighter and tighter and tighter until finally there's a resolution. Whether it's a resolution of more fighting and missiles and such that would be a breakout or it's a deal to really reopen the straights, which would, or the straight, I should say, which would cause a drop in oil. But again, amazing how the chart kind of is just dictating exactly what the news is telling us, which is we're in a holding pattern of sideways chop in oil, natural gas having a good little bounce today. It's still dealing with short term resistance. So if we look here, we can see again, there was support here. We then broke down, then it became resistance, rejected price. And now we keep trying to push through this level, but so far have not been able to. So watch this, this levels around the 283 level. If we can get a daily close above 283, I actually think you can head back to $3 on natural gas. If it can't, then it falls into this longer trend line, which will act as technical support. All right, next one, we have Bitcoin. Bitcoin catching a little bit of a bid today. Um, but again, you wouldn't call this and say, Hey, this is a great move. I mean, it's not, uh, you had two down days in a row. Obviously Michael Saylor strategy sold some Bitcoin. I believe it was on Monday, which caused the down move there. A little follow up selling. It is inching off of those lows because the markets are going up. The asset markets, the risk assets are moving. The positive here is, and this is why I'm still bullish on Bitcoin is that it is still holding the breakout. So remember I'm beholden to the charts. That's all I care about is that you could have all the crazy news in the world coming around me. And I always go back to the chart because anytime I pay attention to the news around me, I always get it wrong. I'm like, Oh, well, and my emotion kicks in and I'm like, Oh, well, that's really bad. [00:17:02] Speaker ?: Okay. [00:17:02] Speaker 1: Well then, you know, yeah, then I got a phone, you know, and then before, you know, I just lost money, right? I mean, that's the essence of it. When I look at the charts, do I always make money? No, but at least I win way more than I lose about a 75% probability when I read the charts correctly. And that's the key folks is that it comes down to this and really looking at this chart. As long as we hold this longer term trend line, I will remain bullish on Bitcoin. If this trend line fails, okay, well then the chart is now telling me probability has flipped. But as long as it holds above this, I'm on that angle. All right, so we'll go from there and see where things go. You guys are amazing. Thank you so much for tuning into this game plan and I'll see you soon. Take care, guys.