Stock Market Top? These Two Factors Tell Me Exactly When The Collapse Begins

[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 need to dissect what's going on with the stock market, the S&P 500. I also want to look at the semiconductor. Something is amiss here. I want to show you the factor on a technical analysis basis that could, and I say could, could be telling us a top is at hand. Again, determining this week, do we close above and negate this signal or does it sell off and hold? That should be ultimately the kickstarter for a bigger sell-off in the semiconductors. All right, we'll look at SpaceX. We'll look at a couple other things as well as the markets continue generally to be on shakier ground now. A deal with Iran is done supposedly. Now the markets are turning back and starting to recognize what's crazy about the valuations on some of these names. All right, diving right into the charts we go. Let's start with the daily chart of the S&P 500. So here we have the S&P. Now remember, what we're watching here on a technical basis, and this is literally institutional knowledge here, very, very simple, but most retail don't follow it. We have our high and then we have our low. Okay, now when we go back, we see this high was higher. Okay, so that's an uptrend. This high to this high was lower. So what this is telling us is that this may be a change in direction. Now I see maybe because we don't have a lower high just yet. Now remember, in technical analysis, when you're trading, what you're looking for is, okay, so we're in an uptrend, right? Higher highs, higher lows, higher highs, higher lows. And then all of a sudden, something happens. You get a higher high, but then you get a lower low. And that's what we've gotten here. Now we've started to get a bounce. The question we're watching for is, do we make a lower high, in which case the upside in the market is likely over? Or do we make a higher high here and we continue our uptrend? Now listen, when you make a lower high, that's stage one of a breakdown. Think about it like this, is that you have stages. Like let's say you're driving your car and everything's going smoothly. And all of a sudden, an engine light comes on and it says, you know, warning, something's amiss here, but your car is still working. That's the equivalent of a lower low, but not a lower high. So in other words, it's a warning sign where now you're waiting to see, do we make a lower, lower high as well, which would then be the trigger for, oh, now I can hear it in the engine. It's breaking down. My car stalls out. I got to take it to the shop. Hope that makes sense for us guys, right? I always try to lay things out in ways that I can understand so that I assume I'm a very basic in terms of understanding. If I can understand it, you guys can. So really what we're watching here very clearly is, is this going to be when we come up here, is this going to be a higher high? Okay. Well then it's still a warning sign because we still have a lower low, but we're still making higher highs. So it's just a warning sign. It's a light on, on, in the, on the dashboard for the engine. But if we make a lower high, let's just say, here's our low, which is a lower low here. Let's just say we're topping out here and we come down. Now you have a change in direction. You can connect these lines and see we're starting in a down sloping trend. All right. So these are the things that I'm watching and I know it's very, what's, what's beautiful about the markets guys is that most people use a ton of indicators. I mean, when you bring up, I've seen other people's YouTubes, you bring it up, they have a zillion things. They have volume and this and moving averages and all this RSI and MACD. And it's not to say I never look at that stuff, but I'm a true believer in the simplicity, simplicity that actually tells us, it tells us the most likely outcome. We don't need a ton of crazy indicators like the, the John Smith indicator, velocity, uh, whatever it may be. Okay. So that's what I'm watching here on the S and P. Another big factor for me is the socks. Now the socks had a big down day yesterday, beautiful. That was after it made a new all time high the previous day. Now, most people would say, okay, well, that's important, right? We made a high and look low, higher, low, high, higher, high. So we're still making higher highs and higher lows, which tells us the semis are still very strong. But if we flip to the weekly chart, this is where things get a little bit more interesting. This is where the one warning sign is the only warning sign we have on the semis right now is intact. This candle here is what's called a topping tail. Topping tails are bearish reversal signals. Okay. Now any signal can be negated, but the beauty of a topping tail is number one, it has to happen at an all time high or at a 52 week high. That's all I care about really. Okay. I mean, really you could, you could minimize it to about the last 90 candles, but either way, the longer back it goes where it's, it's the highest point, the better. Okay. So what you need to see is a big pushup and then a big sell-off in that same candle where you close in the lower 25% of the candle with a big tail or wick on top. That's the equivalent of a topping tail. That is what a topping tail is. And here you can see, we closed it to very lows. Now, while the weekly here, we opened above the topping tail, as of now we're back below now to negate the topping tail, what you have to see is you have to see a weekly close above the topping tail high, right? Now we opened above it, but already we've sold back down today. What looks like we're gapping back up a little bit. We're back to here, but to negate this bearish signal, you must have a close on the S O X X basically at six 20 or above. If we get that, then this is negated and the higher lows have continued. And it'll continue to tell us that the semiconductors are likely headed up. If we don't, and we close below, then this bearish signal keeps its precedence. It keeps its power and you continue to favor more downside. Now, a great example of this was on silver. Now this, this video isn't about silver, right? But if we look at silver here and let me, let me actually bring up one of the charts that we have on silver that again, does not have, um, the lines on it. Okay. So if we go to the daily chart on silver here and we go back here, look at this, here is a daily topping tail. Okay. That was a warning sign. That's what we're seeing in the semis, the S O X X. Now, if you look the next day, we went up on silver. The next day we went up the next day. We even went above the high of the topping tail. Right. But look, we never closed above it on the daily chart. Now, what we're looking at on the socks is a weekly chart. So we have to watch for a weekly close, but if you're on the daily, you watch for a daily close. If you're on a 10 minute chart and you're day trading, you're going to look for a 10 minute close as of now, or you saw here on silver, it never closed above, right? It pierced, which is fine, but you never got a negation of that topping tail. And what ended up happening? Look, look at the downward move that we saw on silver. So there is precedence. And I love showing examples of how these topping tails work and how they can be tested and how a lot of people will miss it and say, oh, well, it's above the topping tail high. No, it has to close above there on that timeframe. And you can see here on silver that that held up. It was still intact, still intact, still intact. And then boom, you literally went from basically $120 all the way down to almost $60 in a matter of days. Now on the weekly chart of the socks, it's a little bit different, right? Because what we're looking at here is a weekly chart, but the same thing applies, right? We have our weekly topping tail. We pierced it here, but we closed back below come this Thursday. Now, remember it's a shortened week. So this week we don't have trading on, on Friday. So Thursday, which is tomorrow, that will be the determining factor. And I'm literally giving you my game plan or my, like the two things I'm watching, the two things that honestly only matter in this market are the higher high on the S and P or the lower high, a lower high would be very detrimental, be very bearish. If we got a lower high and we start to see a sell off here in the S and P without making a higher high, cause we already have the lower, the lower low and the socks, the semiconductors. And the reason that is, is because frankly, the semiconductors are the market. I mean, it just is what it is. The semiconductors are the market and ultimately they are the driving force behind everything. All right. Now, just a reminder, guys, this is super important. I'm going to drop a members only video on YouTube later today, after the federal reserve announces, I'll be going in depth, everything related to the federal reserve, what the decision is, every nuance. We'll be looking at what the charts in the market reaction is. I'll be giving you my latest updates. That will be a members only video that comes out later today, just for my premium members on YouTube. It's called Gareth's top squad. It's $9 and 99 cents a month. It's really a way for you to support what I'm doing, what verified investing is doing here. So if you're a big supporter of mine, I appreciate it. And thank you so much for all of you that have signed up. I started this thinking, I'll get a couple hundred subscribers. We're at 2,500 subscribers already. The more subscribers I get, the more alpha I'm going to bring. Once we hit 3,000, I'm going to give you guys a coupon code for a big discount or a discount on a service or course on verified investing. I'm going to continue. The bigger it grows, the more I'm going to give you guys. And I'll make sure that the value, not just in the videos I do, but the value that you save on verified investing far outweighs what you even pay here at 999. Now, some of you guys may say, oh, I'm paying 1299. That's because Apple's charging 30%. So don't buy it. I shouldn't say this, but don't buy it through the Apple store. Also, if you're in another country, obviously the conversion of currencies is going to cause it. But just some tips. If you're just paying straight up, it's just 10 bucks a month, basically a special coffee at Starbucks once a month. It's pretty ridiculous. All right. 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