Stock Market Crash or Classic Pullback? Major Technical Analysis Reveal, Key Chart Levels To Watch

[00:00:00] Speaker 1: Hey folks, welcome to verifiedinvesting.com. My name is Gareth Soloway, Chief Market Strategist here. Now in today's video, we've got a deep dive into the charts of the S&P and the NASDAQ, looking at the bigger, broader market, massive sell-off we saw on Friday. We saw the NASDAQ falling nearly 4%, S&P dropping over 2.5%, the Russell over 3%. It was a bloodbath. And now if you look back at what I showed you guys in previous videos, there was a trigger and I gave it to you based on a trendline break and that has now enveloped and caused the sell-off, right? So what are we seeing here? We're seeing the markets obviously worried about the AI trade. We knew this was a bubble. I've been telling you guys it's a bubble for quite some time. We didn't know when it would break or bust, but the Broadcom earnings really put a hole in that bubble and it's deflating as we speak. Now listen, it's not over, right? So you will get massive bounces. Everyone has been programmed to buy the dip, right? We know this, the V-shaped recoveries. So you will get major bounces, but I want to show you how you know if the market is putting in a major pivot top, a cycle top, or if it's just a pullback right now before saw another move to all-time highs. All right, let's dive right in. This was the line, right? We've been watching this this whole last week and I said to you guys, notice how you take your low from March 30th, 2026, through the pivot lows right through here. We then went away from it. We came back, touched it again, went away, touched it, touched it, broke. That was the trigger. Okay. And you could see that based on technical analysis because all of these candles hammered on it and then didn't break. We came back, hit it again, and then eventually it broke to the downside. All right. That was very, very important in terms of the charting. Once we broke that, the floodgates opened. Okay. And again, the floodgates opening is not a signal that we're going to have a market crash. Please understand crashes generally don't occur at market tops. It's because you have too many people programmed to buy the dips. Crashes actually usually occur at the lows or if there's an external shock. Now you could say is oil an external shock? Yes, but not to the extent yet. We still saw the jobs growth numbers on Friday coming in very, very strong, but you combine a 10 year yield above 4.5%, which I said is the break point. That's where if it's above 4.5%, markets are going to go down. If it's below markets are okay with it. All right. That combined with the Broadcom news where they didn't raise guidance and they missed on revenue by just a fraction. That was the beginning of doubt. And there was so much overweight in the semiconductors. And just to put this in perspective, the hedge funds. All right. So all the hedge funds, they had the least amount of cash on the sidelines. They were the most overweight in these semiconductors. You throw retail into that mix and they're overweight to the nth degree. It was basically a train wreck waiting to happen. The train was already coming off the tracks. It was just a matter of what was going to trigger the absolute, like, you know, fall off. And that's what we saw. All right. Now we're getting into the nitty gritty. What are we looking for here, guys? Okay. So number one, we've broken this trend line. Now this could just be a pullback where we go like this, right? And that's very, very possible. But what I'm looking for is do we make a lower low? And so what we can see is the market kind of went up here. Then we went sideways. Then we went up. Then we had a little bit of a pullback. Then we went up again. Now a bigger pullback. Notice flat, small pullback, sharper pullback. So that's number one. Number two is you want to watch this one pullback low right here. This one here. Basically, it's 7335. All right. My guess is on Monday, we may test that level. The question I'm going to be watching for, does it pierce the level? If it pierces the level, it will then make a lower low. You'll have a low and a lower low. And if we start to get lower lows, that starts to raise the probability that this is a major top in the markets, not just a small top or a pullback like we saw here, or even kind of right in here where we went sideways. All right. And if you look back here, right? So you can see markets kind of top, top, tops, but really here, if we go back to the rally from 2025 in April, which was the tariff sell-off low, high, higher, low, higher, high, higher, low, higher, high, higher, low, higher, high, higher, low, all the way up here. Right here, we made our first signal of a lower high. And that told us that essentially, if we look at this, that was essentially putting in the market top, right? We got the lower, here's low, lower, low. And again, it still stayed relatively strong, but then we had the bigger sell-off here. And really we did get a lower low there, but obviously we've taken out the highest since. But little things like this make a difference. A lot of people overlook it. Most retail, I'd say 99.9% of retail out there doesn't even think about this stuff. And I bring it to your attention because as a, as someone who's worked with and been in the institutional game, I've kind of, I, I, listen, I've advised hedge funds. I've, I've, I've run them. I mean, I mean like this, at this point, these are the small triggers that a good manager is going to look for to decipher what the odds are. Now, again, as I always say, it's all probability, but these are breadcrumbs that increase the probability. So that'll be what I'm watching for coming on Monday. Do we make a lower low? If we do, you know where we're going to go. Remember my old parallel? That was an absolute amazing, amazing parallel going back to the COVID lows. It was this right here, this line. And then we have this one, which took us up to these highs right here. That is going to be, become support now. And so again, people say, oh, well, what about that old parallel? Well, it, it absolutely comes into place. Every former major level of supportive resistance when it's finally broken. So support breaks to the downside or resistance breaks to the upside. That line doesn't just vanish. It now reverses into either support or resistance, the opposite, right? So if it was support, it becomes resistance. If it was resistance, it becomes support. All right. So that's what we're kind of keeping an eye on here is that if we make a lower low, you would expect a technical bounce around 71.85, give or take right in here. There's also a gap fill right there and a pivot high. If we pierce that, then you're coming back down to about 7,000, which even that would not be a big move. The other thing I want to do. So number one, let's keep an eye on this. Now, I don't want to keep these lines on because I don't want to get things too complicated, but this would be our general. If we make a lower low below this low of 73.35, we should go down to 71.75 here. All right. If that breaks, then obviously down to 7,000, which will be epic support, but this should give us some sort of bounce here. Now, one of the things I like to do is I like to overlay my Fibonacci. So what we do is we take our low here and I selected my Fib tool right from in here, Fibonacci, if you're learning how to use charts and we do this and we say, okay, well, what are we watching here? And what's interesting is that the 382 Fib is right below that level. So maybe you wick down, you tag that, look at all that technical sideways chop right there. That's where we kind of went sideways before we had that move up and then the small pullback up move and then the big pullback that could be. So basically what we're looking at here is the level I had, I think was 71.75, maybe down to 71.35, but right in there, that would be honestly where I would start to probably buy some of the semiconductor stocks for bounces on those levels. And again, this is just kind of breaking down what I'm looking for on the charts. Now, if we go to the NASDAQ, we take a look at the QQQ. So we knew we were watching this parallel, right? So very steep parallel, low pivot from March 30th, low pivot here. And then you had your high here and your high right there. Here, they opened it below, closed it above, and then it was just like, nope, institutional selling. Now, same thing. I'm going to be watching this low here around 6.96 on the QQQ. Now I switched over to the ETF here. This is the QQQ ETF, which tracks the NASDAQ 100. So that's the level here, which that's your really only pullback of anything. And that was only a minor pullback. If we look at percentages, this from this high here to this low, that was a 3.7% pullback. So I believe we've already done that just with the pullback we've seen here because on Friday, we were down nearly 4%, right? So yeah, we're already at 6%. So the percentage is bigger than here, but that makes sense, right? Because on the S&P 500, this was your small pullback. Now, this is your bigger pullback. So if we go to the Qs, you would expect this one to be bigger than this one, just like the S&P. Now, the question is, do we take out this low here? That then triggers, this is a potential major top. Okay? So these are the things we're watching. I also want to also throw on your bigger timeframes. So we want to go to our weekly chart. And this is something that I'm paying attention to. Anytime you have this extension move and you get a weekly close below the low of the prior week, that can also signal a top. You can't have a topping tail here, but if we go to our monthly chart as well, same sort of thing. Do we come down by the end of the month and potentially come all the way back down and erase this to the downside? Now, the semiconductors. So number one, there were breadcrumbs. What were the breadcrumbs? Well, you can't deny, and I said this, folks, I said, you know, if you go back a week or two in videos, we talked about NVIDIA, how NVIDIA was at all-time highs, and then all of a sudden it started to get weak. All right? We started to see the second tier level. Like what was driving the semiconductors was Jensen Wong saying, oh my goodness, there might be a, you know, Marvell Tech, MRVL might be a trillion dollars. I mean, you know, you went from like, okay, here's this new amazing technology to like, oh, let's speculate. Let's guess. Like those are signals that number one, they're trying to keep the markets up for liquidity purposes, extra liquidity, but also just like, okay, this is getting on thin ice now. It's coming, you know, you're seeing the drive of the semis as a whole. NVIDIA already lost its cluster. And now you're seeing it drive on people saying, oh, this is going to be the next big thing. Right? And I'm not, I'm not discounting Jensen Wong. He's a, he's an amazing individual and he's done amazing things, but it just shows you if you're focused on technicals and data, you don't just go on someone saying, oh yeah, you know, this $200 billion company, yeah, it could be the next trillion. Oh, look at that. It's up 35, 40%. Like it doesn't quite work like that for long-term. It can keep markets up in the near term, but Broadcom really sealed the deal here. This was an incredible trend line on Broadcom. And just to remind you guys, I mean, I'm not going to go into this in this video. I'll do a video tomorrow on crypto and on metals, but I mean, Bitcoin was telling us something, the Bitcoin fall, de-risking there. And then look, as soon as the stock market started to fall, Bitcoin got crushed. And then silver, again, I've been, I've been dead on, on silver. Silver, we broke this here. It made a bear flag. I said, it's going back here. And then actually, I think it's even going to go lower, but it'll, it'll bounce here. And then same thing on gold. I said, gold's going down further as well. And so again, you know, you look at gold and this is really, and I'm not gonna, I don't want to get into this much because that's wasn't what the video is about, but you had the 50 MA and the 200 MA, and we just broke the 200 MA. Now you might bounce a little bit, but ultimately that opens the door to this low pivot here. Um, um, this one right here at 4,100 and if that breaks, you're going to 35, 3600 on gold. All right, guys, I just wanted to get you guys a weekend update on where the markets sit. Um, ultimately I would say the one thing at this point that can stem the bleeding is if a deal is made to reopen the straight of her moves, that would be a short-term fix. But ultimately if not, um, I would expect some more deleveraging in the AI trade come Monday. Um, maybe Monday it flushes and they get a bounce at some point, some of these will, I mean, some of these were down like 15, 16% on Friday and they're off already, they're all time highs of like 20%. Um, so there will be, this is where I start looking for Fibonacci levels on some of the semiconductors to potentially be buys. Uh, remember I'm neither a bull or a bear. I just call it the way the charts are telling me the probabilities are and that's the essence of it. All right. I will keep you guys posted as always. Don't forget guys, if you're interested, I'm going to drop a members only video later, but you can sign up right here on YouTube for my premium YouTube. It's only 10 bucks a month. I'm going to be doing now as I get more and more members, uh, at least one video, premium member video exclusive to members here. Um, plus you get other perks as well. So you can sign up right here on this YouTube. I don't have a telegram group. I don't have a Patreon. I don't have a Discord. I don't any of that. The only other thing I have is verified investing.com where I have my premium memberships, um, that are more expensive, but then you actually see the trades, you get the exact entries, exits, you see the portfolio and all that stuff. All right. Have a great rest of your day guys. Thanks again for coming out and spending time with me and your kind words. I'll talk to you soon. Take care.