S&P 500 Support Just Broke: Big Money Unwind Spreads | Gareth Soloway

The stock market whiplashed after a hawkish 9-3 Federal Reserve hold, but the real story is the massive unwinding in the semiconductor sector. Recorded midday Pacific, July 29, during the post-Fed reversal. Markets sold off into the close, with the Nasdaq 100 ending in correction territory. South Korea's KOSPI has crashed 33% this month, and memory chip giants like SanDisk are down 57% in just 30 days. Is the AI CapEx bubble bursting?

In this episode, Gareth Soloway, Chief Market Strategist at Verified Investing, breaks down exactly why the tech unwind is spreading and shares the exact trendline where he is contrarian-buying the chip crash. Gareth also maps out the S&P 500's critical "line in the sand," explains why the New York Fed is flashing a credit market warning, and details the structural global forces driving his long-term $13,000 gold target.

Recorded July 29 2026

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CHAPTERS:
00:00 Fed Hold Market Whiplash
01:02 Hawkish Hold Breakdown
01:57 Markets React Dollar Slides
03:46 Gold Reversal Key Level
05:39 Breakout Confirmation Checklist
06:27 Dollar Oil Jobs Drivers
08:43 Gold 13,000 Cycle Thesis
10:28 Calculator Inputs Scenarios
15:24 Buying Plan Physical Vs Trade
16:43 Miners Setup GDX Newmont
17:36 Silver Surge Chart Warning
19:00 Silver Lag Risk
19:31 Gold Over Silver
20:34 AI CapEx Doubts
21:54 KOSPI Support Setup
22:14 Leverage ETF Unwind
23:38 Semi Cycle Snapback
24:50 NASDAQ Bear Signals
26:16 S&P Line In Sand
27:30 Yields Inflation Doubts
28:35 Rotation To Defensives
29:51 Credit Stress Warning
30:46 Oil Topping Pattern
32:58 Key Levels Tomorrow
34:21 SanDisk Bounce Trade
35:42 Wrap Up And Question 

#KitcoNews #GarethSoloway #StockMarketCrash #GoldPrice #Semiconductors #FederalReserve #TechnicalAnalysis #Investing #MarketCrash #S&P500 #Silver #Commodities
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Transcript

SPEAKER_02 0:00

All right, now the Fed holds and gold broke below $4,000 this morning. Now trading above $4,100, a reversal of more than $100 from its session low. Silver moved even faster, rising more than 3%. Meanwhile, stocks having a very interesting day, short-term treasury yields as well, and crude oil remains sharply higher. Now the markets traded initially that the Federal Reserve's decision as relief, but Chair Kevin Wars delivered a forceful warning on inflation and left another interest rate increase on the table. So did investors hear the hold and ignore the warning? Is gold's $100 reversal open the next move higher? And how does today's price action fit Gareth Soloway's new call on gold? Stay with us. He's up next.

SPEAKER_01 0:42

Kitco News in Focus with Jeremy Saffron.

SPEAKER_02 0:45

All right, welcome back. I'm Jeremy Safer. We have a ton to get into today. Joining me now is Gareth Soloway, Chief Market Strategist at Verified Investing. Uh Gareth, busy day. Good to have you back.

SPEAKER_03 0:55

Great to be back, Jeremy. Thank you for having me. It's a wild day in the markets.

SPEAKER_02 0:59

Yeah, sure is. I mean, talk about a reversal. And you know, we're coming to air just for the audience. Uh, just after Kevin Wars, the chairman, concluded his press conference. And I just wanted to update a little bit of what we learned. I mean, the Federal Reserve held its benchmark rate at 3.5 to 3.3 quarter percent today. Uh that marks, I guess, I I guess that would make five consecutive meetings without a change. Now, this was a hawkish hold. The vote was 9-3. Laurie Logan, Beth Hammock, and Neil Kashkari wanted a quarter point increase. No Federal Reserve governor joined them. Uh Warsh also revealed that the commit committee's decision uh discussion kind of centered on whether to raise rates. He said that higher rates could uh well be part of the solution to inflation and that the Federal Reserve will not hesitate to act. Now he also said tighter financial conditions have already done some of the Fed's work for him here. Uh Walsh wants markets to provide the Fed with a direct and unfiltered signal. So, Gareth, I mean, let's go directly to that signal. What did the markets tell the Federal Reserve today?

SPEAKER_03 1:56

Yeah, so the Fed right now, their statement and Jerome Powell's commentary, it is giving the markets a very good rally off the lows. Earlier today, we saw the semiconductors getting slammed again. Sand disk fell all the way below $1,000 before reversing to $1,100 here, and we'll see where it ends for the day. But the point is here is that the markets liked what Jerome Powell said. He left the door open to not just using interest rates to kind of tighten monetary policy, and I thought that was a very good thing. I also think it's good that he's taking it seriously. He's showing he's not a pushover, which gives the market a little bit more confidence in the Federal Reserve. And it is, again, driving gold up, silver up, and the stock market here in the afternoon session.

SPEAKER_02 2:40

Yeah, well said. And I know that you meant Kevin Wars, even though you and me for years have been talking about Jerome Powell. But I mean, he has changed it and shifted his own sentiment towards the Fed. And I'm curious, I mean, did did the charts confirm a genuine shift in sentiment, or did investors simply kind of celebrate the fact that the Federal Reserve just did not raise rates today?

SPEAKER_03 2:59

Yeah, and I think that's part of it. I think Kevin Warsh, you know, there was this a little bit of concern. In fact, going into today's announcement was the highest probability that we have seen in a long time that the Fed might actually hike rates on the day of the meeting. I think it was around 38% this morning, uh, the odds that they would hike. And so the market's breathing a sigh of relief. They also, like I said, loved the aspect where he said there's other m manners in which the Fed can attack inflation besides raising rates. And again, the market's still pricing in a September rate hike, I think about a 60% chance, but it was up north of 70%. And so again, all of these things we're seeing the US dollar fall to the downside, gold starting to take off, and obviously the stock market likes this statement.

SPEAKER_02 3:44

Yeah, yeah. Let's uh let's begin with gold. Uh, I mean, it traded down to roughly $39.95 this morning and it has now broken above that $4,100 in the same session. I mean, sitting here kind of floating on that level. So, I mean, does that $100 reversal kind of confirm that the buyers have taken control or does gold need to kind of close above $4,100 before this becomes a genuine technical breakout?

SPEAKER_03 4:06

Yeah, and that's really what the charts are telling us. So, I mean, great move on gold, but look at how this what we call a wedge pattern in technical analysis has behaved. You take your all-time high, it hits again here and here, all the way down. And recently we've been hugging just below this major trend line. And this trend line for me is essentially the line that I'm watching to know when there's a breakout in gold. And notice how today we rallied up into that line, and so far gold has pulled back off of it. And so, as a technician, simply put, just like you said, 4,100. We need to clear that hurdle on a daily closing basis. If that happens, you have a short-term breakout. I don't, by the way, think gold's gonna zoom right to 5,600 again. It's gonna take some time, it's gonna take some digestion, but that's the first step in potentially seeing gold start to recover and move back to its all-time highs.

SPEAKER_02 4:57

Yeah, so I mean a little close, maybe about 4,100, tells you that this uh, you know, was more than just a temporary reaction to this.

SPEAKER_03 5:05

That's what I think. I think again, we have to respect the trend line that has held up since the highs on gold until price really clears that hurdle and holds above it. I'm looking at it a little skeptical. Now, you guys know that overall I've been bearish on gold, but I'm now at a point, and once we got below 4,000, where there's very much there's a little bit of downside potential, but we're close to the end of this down cycle before I do think this the price on gold starts to move up. And it's got some upside potential over the next few years.

SPEAKER_02 5:34

Yeah, yeah. I mean, I was watching, I know you put out some new targets too. We'll get to those. I mean, the the first move following a Federal Reserve's decision is not always the move that lasts. I mean, what follow-through do you kind of need tomorrow and then into the end of the next week before you believe this rally has real buyers behind it?

SPEAKER_03 5:49

Yeah, and so the first thing we want to say see is that close above 4100. Once we get that, you don't want to see the next day it come right back below 4100. And so there's something called the confirmation signal, where you get a close above a key level, and then you need to see a secondary close above that level and a little bit higher than the previous day's high. What that tells me is there's real teeth to the move. It wasn't just a whipsaw like you're talking about here, where we're seeing this root this kind of move up on the back of Kevin Warsh's statement and the Federal Reserve statement, where we can see these type of whippiness, but where do things settle? Where does the dust settle? And that gives us the signal there. And really the other thing too is the dollar's been hovering here. And if we go to the charts, let me show you guys this. This is interesting. So the dollar has been hovering right up in this upper zone, and we could see again going back a ways, even back over here in 2025. We came up to this high and it got rejected. And here we are, we came up, rejected, and here we are again getting rejected. You want to see the dollar continue to fall here. If the dollar continues to back off resistance, now we're in a state of potential upside in gold. Lastly, just watch this trend line here. If we pull back to just under 100 on the DXY, and if we break that, gold's got significant upside in the near term and midterm.

SPEAKER_02 7:08

Yeah, I was gonna say, I mean, if Warfars keeps uh September rate hike kind of alive and the dollar holds this range. I mean, can gold kind of continue rising with that sustained dollar strength that you've seen?

SPEAKER_03 7:19

You know, it's gonna be tough for gold, right? And part of it too is that oil is a major component here. Oil is pushing up the 10-year yield because it's raising inflation expectations. And so we've seen recently this run-up on oil back into the $80 plus dollar range. You want to see oil come in that will relax the potential of these rate hikes. We also want to see what the jobs data is coming up for this this past month here, as we're coming to the end of the month. And we want to look to see if the jobs market as strong as people think it is. And if it starts to weaken a little bit, the dollar will fall very quickly, and that's one more positive for the gold price.

SPEAKER_02 7:56

Hey, quickly on this, I mean, uh, I want to move on to your gold call, but I'm curious. I mean, could today's move uh have been kind of accelerated by traders who were positioned maybe for a surprise increase and suddenly had to cover?

SPEAKER_03 8:08

I do think so. I think the the sentiment on gold has gotten to almost equal bearishness versus how bullish it was when we were trading north of 5,000. I mean, I used to do videos and and people would attack me for saying gold was gonna pull back, and now vice versa, I'm seeing when I do a video on gold and I talk about the cycle here and this the bigger cycle that we're in, how we're gonna eventually break out and make new all-time highs, people are telling me gold's going back to 1,800. And so it's the inverse of what we saw at the highs, which actually then creates that bullish catalyst for the offsides trade to kind of push gold back higher.

SPEAKER_02 8:42

You know, I was watching your latest video, and it's kind of we need to talk about that number that jumps off the page. I mean, your latest long-term work kind of maps a potential peak in gold around $13,000. But between 2029 and 2031, now some investors will hear that and celebrate, others will immediately roll their eyes as you know, but build that bridge for us. I mean, how does gold get from around $4,000 to $13,000?

SPEAKER_03 9:04

Yeah, so the it's based on a calculator that I created, and essentially the calculator takes into effect multiple factors. One is how fast is the money supply? And again, we're not talking US money supply, global money supply running. And right now it's running at 7%. So if you just assume over the next five years at 7.5% or greater, that starts to push the cycle of gold. And what we looked at here is when you have the first cycle between 1980, the second peak peak was 2011. So we're talking, I mean, 31 years there of interim cycle. And then the next cycle, it was just 2011 to this 2026 high. And so what we're seeing is because of the increased US deficit and global debt, the increased money supply, real rates, and inflation, all of these are creating shorter cycles in gold and then more dramatic moves to the upside. And essentially it's a calculator that calculates the the probabilities of the next move. And again, the it's telling me that 13,000 is gonna be the next peak, but again, between 2029 and 2031. Now, like you said, people are gonna hear that and say, oh, I don't want to wait that long. But keep in mind that doesn't mean we're not gonna make new all-time highs before that. It just means the next cycle peak, the one that you know we dream about, that may just take a few years to come by. And it's really at shortest about three years out.

SPEAKER_02 10:26

Okay. So I mean, you know, you got you got that calculator you're talking about. What's doing most of the work in the model? I mean, is it kind of that technical cycle that you were just chatting about? Is it is it government debt, central bank buying, falling confidence in government bonds, or does gold need all of those forces moving together, you think?

SPEAKER_03 10:41

The calculator accounts for all of those cycles, right? Or all of those factors, and it gives different weightings to the importance of it. Part of the cycle calculator as well is analyzing the fiat feeling. And then what I mean by that is how do people look at fiat? And if you looked at in 1980, we had incredible inflation, but at the same time, we saw Volcker come out and he really re-established that we're gonna clamp down on this. And over the course of that next 20, 30, 40 years, we've seen the fiat feeling. In other words, how do people feel about the dollar and other currencies? And we know they're printing them and the governments are running up debt, it's starting to slide. And so these factors all go into the model, and it really just projects out based on the past cycles and how quickly it's coming, when will the next cycle be? And what is the likely peak, taking into account these other variables?

SPEAKER_02 11:31

You know, I wonder, Gareth, I mean, if if if gold reaches $13,000, has gold become dramatically more valuable here, or has the dollar simply become worth dramatically less?

SPEAKER_03 11:41

Yeah, and I I think it's I think it's more about the structural need for people to have security, and it's the fact that the dollar needs to be measured. And this is interesting, right? If you look at the dollar, the DXY, we're basically at levels we were years ago. And so if you look at the dollar by itself, you say, well, the dollar really hasn't lost any value. That's not true. And the reason it's not true is because you're pricing it against all the other currencies, the five other currencies, and they're all printing too. And so really it's it's a matter of saying, okay, well, yes, the dollar is still holding its strength, but that's relative to these other currencies that have been printed ad nauseum with the dollar. You have to look at it on a universal basis against the growth in supply. I believe gold is growing about 1.7% per year in supply versus the printing of money, the debt increase, all of these other factors. And that's one of the reasons why this model shows that there is such significant upside in gold, because there's no chance, in my opinion, there's no chance we can go back to Volcker, right? I mean, could you imagine with the US debt where it is, if interest rates even went up to 10%? And so when you have that in effect, it means that Volcker can't come back, which means you're not going to get a downside move like we saw in the 1980s in gold. And in other words, it's going to drive gold higher quite substantially.

SPEAKER_02 12:57

You know, and on the other side, I mean, we're always in for surprises in the market, as you know well, my friends. I mean, what would kind of make you reconsider the $13,000 target? Give me, you know, the price or kind of a development that would tell you that the model is no longer behaving as you expected.

SPEAKER_03 13:10

Yeah, and so so for instance, if we saw, let's say, AI create deflation, if we saw the productivity going up substantially, but again, that deflation being created by AI, that would be something that we'd have to take into account. And what's interesting is with the model, it actually gives us a significant ability here to kind of project that out. And I want to, if you don't mind, I want to try sharing this with you guys. If we get to this, and here's the gold uh calculator, what we can see here is that we have our different inputs. You have debt issuance pace. And this is right here our current condition. So right now, every year the U.S. is printing basically $2 trillion. All right, and and the idea is that that's probably going to go up based on the kind of the cycle that we've seen with it increasing over time. Then we have global money supply rising at 7% a year. We have the fiat mistrust index, which continues to inch up little by little, and then we have real interest rates. And so the idea is that what I did is I said, okay, this is my base case. And if we flip to the base case, it shows that on average over the next five years, we're likely going to be printing or adding additional debt per year of $2.8 trillion. And that's the average over the next five years. Global money supply is going to likely increase to 9%. The fiat mistrust analysis is going to accelerate, and then real interest rates is going to be drifting to zero. In other words, the Fed is likely going to eventually cut rates, but inflation is not going to go down substantially. And so when you calculate that all out, it gives us a target range right here with a $13,000 peak. And again, what's beautiful about this is you just brought up like what if real interest rates are positive? Well, now all of a sudden, this changes the calculation to $6,000. And so people can really, and again, I can give you guys the link so people can actually just play around with this. You can put in your own numbers. Like maybe you think the debt debt issuance pace will jump massively to $4.7 trillion. In any case, the point is the calculations tell me, based on my best assessment of the data and probability, that we're looking at that next peak around $13,000. Interesting.

SPEAKER_02 15:23

Yeah, I got to ask you. I mean, when when gold moved below $4,000 this morning, I mean, were you interested in in buying immediately, or did you kind of need to see the recovery before treating it as an opportunity?

SPEAKER_03 15:34

Yeah, so for me, I still have to watch this chart because I'm not convinced. And listen, to be fair, um I have I have gold holdings that are long-term, like physical metal holdings. And so I'm not in a rush to buy more. My the level where I will start accumulating more gold is at around 35 to 3700. So we're almost there. We get one more little flush down, I would accumulate more long term. Now, on a swing trade basis, when we look at the chart, the chart is always my guide on a swing trade basis. So looking at the chart, as soon as we take out this high pivot here, we'll go to the charts here, this right here, once we get above this, that's where I would buy as a swing trade basis. But again, for my long-term holdings, I just buy physical and I wait until I get it to a level where I feel comfortable. You know, I never want to sell my physical. If my physical silver and gold is my insurance policy, where I if I don't need it, if catastrophe doesn't happen, I pass it on to my kids. It's just that it is, that's that's the way I view my long-term physical holdings. If I want to buy and sell, I'm doing it on a swing trade basis with the GLD or other metrics or other ETFs.

SPEAKER_02 16:42

Well, let's talk about that because you did recently, I think you took taken a position in the gold mining sector through GDX, right? I mean, why own the miners now? Is this a short-term kind of technical trade, or do you believe that the miners are finally positioned to outperform gold itself?

SPEAKER_03 16:54

So so right now it's it's the same sort of situation. I don't really have a position in the miners at this point, but we do have a bull flag building, but just like the GLD or the gold chart, I'm looking to see do we break out. Um, I do think that ultimately you will see the miners outperform gold. So for those of us out there that want that better return, now it comes with added risk, as we know miners tend to go down a lot more than gold physical as well. But again, that would be a way to play at the GDX. And I do like certain miners as well, Newmont mining. I mean, best of breed is always what's attracting me, especially ones that pay a dividend.

SPEAKER_02 17:32

I was gonna ask you about that, but you already answered it for us. Okay, well, let's move on. I mean, silver rarely does anything quietly, as you know. Today was no exception. Uh moved roughly $56 and 64 cents to more than 59. I think it's back around 58. Anyway, that's a gain of more than 3%. So, I mean, does silver's stronger move confirm what gold is doing, or is silver simply exaggerating that short-term action as it often does?

SPEAKER_03 17:57

Yeah, I think for the most part it's it's exaggerating it just because silver tends to move in multiples of gold or at least 2x gold. I am not loving this chart yet on silver. I still think there's downside. You could see again you had this beautiful base right here where we just kept on hammering on it as support, and then finally we broke lower. And then notice how this trend line was support, but once you break down, it becomes resistance. And we went up into it and price got rejected, and now we're just kind of floating sideways. There's no real good nature to this. So on silver, I need to see us recapture this $65 to $64 level and break out above this trend line, much like I need to see gold break out before I can get heavily bullish on this. And I actually still think there's a good chance we touch $50 and retrace to the 2011 peak before silver really has its day, its next bit major run.

SPEAKER_02 18:51

That's interesting. Okay, so it'll test that zone, and they can expect that test and maybe a nice little bounce after that.

SPEAKER_03 18:58

Yeah, that's what I'm that's what I'm thinking right now. And so I wouldn't be surprised if silver still has more downside. Now, you might say, well, if gold, can gold break out without silver? And the answer is it can. It's generally unlikely, but it could break out slightly. And the key why silver could be an underperformer is imagine all of a sudden we get a slowdown in CapEx for data centers. We know that a lot of silver and copper is being used there. Um, or if the global or domestic economy slows down, that industrial side of silver could mean that silver does underperform in the near term if we get that economic slowdown.

SPEAKER_02 19:31

I mean, if you're at home and your time horizon's kind of three years, let's say, I mean, which would you rather kind of own at today's price? Do you think it's gold, silver, or the miners?

SPEAKER_03 19:40

I would choose gold uh for the longer term. And I say that mainly just because it's safer, right? If you're thinking about someone who has a longer-term horizon that doesn't want to be scared out of a trade, I mean, for all we know, gold silver could come back to $45 or $40 per ounce. I think the gold trade is the one because it's the one that's most directly tied to what we know, which is the U.S. debt is at $40 trillion almost. We have that kind of the printing of the global fiat continuing to rise at at least 7% a year. And so you're playing directly the play that the governments and central banks are gonna never really be able to rein that in because global debt is just so high, right? So we just can't go back to that Volcker style, which means long story short, you get more money printing. So I think gold's the safe kind of play. Is it gonna be the sexiest? Is it gonna go the most? It may not, but at least you sleep better at night.

SPEAKER_02 20:33

Let's turn to the other side of the market. I mean, I find it interesting because precious metals are obviously rallying rallying, but the damage in global technology stocks were becoming harder to kind of ignore. I mean, South Korea's cost has fallen roughly one-third this month, triggered circuit breakers, right? I mean, SK Heinex fell sharply even after reporting a six-fold increase in quarterly profit and announcing at least $31 billion in capital spending this year. So obviously, you know, not normal price action. Uh, when a company delivers enormous profit growth, promises even more AI spending, and investors kind of sell the stock anyway. I mean, what is the market questioning here?

SPEAKER_03 21:10

The market's questioning that is this money well spent, right? I mean, every time we see, I mean, for instance, Alphabet had amazing earnings, but they said, hey, we're gonna raise CapEx and the stock sold off. And it's just it's a matter of, okay, if you're gonna spend $200 billion a year, what type of return will you get and how long will that take to come around? And that's where we start to get into these scenarios that these stocks had all run up precipitously, thinking that there'll never be a slowdown. And that's just not the way cycles work. It doesn't matter what it is, if it's AI or the internet bubble of 2000, there are going to be slowdowns. And when you're investing that much money, again, investors just aren't believing right now that there's going to be a significant return. And again, the Cosby is a great example of this. If we look at this chart, number one, I'm actually bullish on the Cosby now. It's finally corrected enough where I actually think it's going to. Find some major technical support. I mean, look at this area right in here. I think it's down about 40% in recent trading. Um, monster drop to the downside. But keep in mind the Cosby is two stocks make up over 50% of it. And this drives me nuts. And I don't mean to kind of go off on tangents in in this interview, but you had a lot of officials over there in Asia saying, Oh my goodness, we need to meet. This is horrible. It's ropping. And they introduced all these 3x ETFs. So when someone buys a 3X ETF, one share, the underlying ETF has to buy three shares of Samsung or SK Heinrich. Um and the problem with that is it's great on the way up and accelerates the move. But when people sell that, then it's 3x shares on the way down. And so you can't have it both ways. And these these officials, if they're going to put in these type of things, it has it's great for that upside move, but it's also going to crash the market. And that's what we've seen here. We've seen a massive unwind. I mean, think about this. Sand disk here in the US broke $1,000 today before putting in a bottom down from $2,350. And again, just a reminder, uh, you know, a general announcement. When you see everyone screaming by, it's usually time to sell. And this was another example in the AI memory space where that is exactly what happened.

SPEAKER_02 23:20

Yeah, it's interesting there on the three times leveraged ATFs. I mean, if the damage was kind of created by market structure rather than fundamentals, then your point is that strengthens the case for a sharp recovery once this forced selling is ending.

SPEAKER_03 23:34

And that's, I think, what's going to happen. And let's be clear, I don't think I think the tops are in in a lot of markets, including the semiconductors, because I do think margins are going to compress. There's no doubt about it. And you have all these companies out of China that are now, you know, starting to get more notoriety for producing memory and also what ASML does in terms of their technology. Um, but when you have margins at 80 or 90 percent, every other company out there is looking and saying, wow, that's amazing. How do we get a piece of that? And that creates more supply eventually, and that will lower margins. And so again, you know, you're gonna get a snapback that's probably epic in these stocks. I mean, I could see Sandis going back to 13 to 1500, 50% upside potentially off the lows. But at the same time, you gotta just be realistic that these are cyclical. People tell you it's different this time. They said the same thing in the internet bubble before it collapsed. And sure, some of those companies emerged, like Cisco, great business model, but it still doesn't mean that they're not gonna have crashes out of them. And I do think, again, bounces are to be sold into uh in the semis.

SPEAKER_02 24:38

That's interesting. Uh, you know, 1300 on Sandis, major call. South Korea's obviously, as we know, it's a concentrated market. Heavy retail participation can also kind of make those moves unusually violent, as you just talked about. I mean, what would you kind of need to see in the United States before calling Korea a genuine warning for the Nasdaq?

SPEAKER_03 24:57

So I I think the question is gonna be is we're gonna get a bounce at some point, whether it's tonight or in the next week, the Cosby will bounce. The question that I'll be watching for is how big of a bounce? Does it go and take out the highs? Okay, well, the bull market structure is intact. If it bounces, let's say, 50% of the way and then comes down and takes out those recent lows that we just made in the overnight, that would be very concerning to me overall. As again, it's starting to make the lower low and lower high structure that is a bear market, not a bull market.

SPEAKER_02 25:29

Yeah, yeah. And I mean, you've you've said a confirmed kind of break could remove another 1,500, 2,000 points from the Nasdaq as well. I mean, what is the domino that kind of pushes it through that line? I mean, I know we're not, you know, we don't we don't know, but do you think it's gonna be more semiconductor earnings? Do you think it's more credit stress, rising yields, or something investors are just not watching closely enough?

SPEAKER_03 25:49

So I I think it's the concentration of in the semis. So much leverage has been put in there and it's still so levered. And we're seeing this in names like Oracle, right? Where it's a combination of the debt and how much they're taking on and whether or not they're gonna get these kind of results that they hope to get. And I still think earnings are gonna be generally good, but again, if margins just start to come down a little bit, markets always price in six to twelve months out, and that's gonna be very problematic. And by the way, I'm just noticing the S P here has rolled over. We're almost back to the lows of the day. I'm not sure if the market heard something from Kevin Warsh or what, but wow, look at the S P come right back down here. And again, that's just something we'll have to kind of look into, but but really remarkable decline here on the S P back down. Um by the way, I just want to show you this SP chart. This is a line in the sand that's gonna determine if we have a bigger correction or just a pullback. Here's a trend line going back to the highs in 2021's bull market connected through this high here in 2025. And look at how the market behaved. It broke out, it retested, bounced, retested, bounced, now it's back again to this trend line. And the reason I'm bringing this up is that if we break this line and we have a daily close below, that would be a warning sign to me that the S P here could head down to the highs from early this year, which would be all the way back to about 7,000 on the SP. So really big level here, right around 7330. Watch that on a daily closing basis on the SP. We stay above it, the bull market's intact here in the near term. We break below it, we're likely going to 7,000.

SPEAKER_02 27:27

Yeah, yeah. Well said, Gareth. Uh again, we're filming this live. I mean, markets reversing while we're speaking, stocks briefly turning positive during Warsh's news conference, and now are negative again. The two-year yield is down, but the 30-year up roughly 5.13%. I mean, that split is is the long end saying that the current the you know the the Fed held today, but uh that's not restored its inflation credibility?

SPEAKER_03 27:50

That's that's what I'm I'm getting from this right now, is it's saying that the longer term, and this is duration-wise, is that there are still issues. There's this inherent inflation. And as much as the tough talk from Kevin Warsh today was in terms of we're gonna he's you know, he said, we're gonna get this under control. The market right now is telling me they're not buying it. They're not buying it. And again, I I go back unfortunately to the uh President Trump when he appointed Kevin Warsh, he said, uh or before he appointed him, he said, I will not appoint someone who's gonna raise rates. And so the market might be saying, you know, Kevin's talking about you know other methods of doing this, he's talking a tough game, but is he really going to follow through? And maybe the long end uh of the yield curve here is telling us something.

SPEAKER_02 28:34

Hey, I mean, if semiconductors continue rolling over, uh, where does the money go? Is it into kind of profitable software companies? Is it in defensive commodities, gold, or simply into cash at this point?

SPEAKER_03 28:45

Yeah, that's a great question. And I think at this point, part of it is going into cash, and there's also a rotation into certain names. And you can really see this, like you know, Conaggro, these boring old school stocks. Look at since the market's been struggling, ConAgra, which again pays like a 7% dividend, 6% dividend, is now up about 20% off of its lows. But if you zoom out through the whole bull market, this has been tanking. And again, I think the part is a lot of money flow was saying, hey, forget these stocks. They're boring, they're not AI related. Now money is saying, hey, listen, this is where the safe haven trade is. This is where we maybe should be going. And you can see this on so many of these, like Clorox is starting to push up a little bit here. This chart looks really good, been beaten down for a long period of time. Kraft Heinz, KHC is another one. I mean, look at this beautiful rally here just over the last couple months. And so I think there's a partial here. I think part of the money is kind of being pulled out. I think part of it is leverage that might not even be deployed again. And then part of it is absolutely rotating into other names. And again, we'll have to see what Microsoft and meta earnings are after the bell as well.

SPEAKER_02 29:49

Hey, let's stay with technology just for a second because the move underneath the stock market into the financial world and the AI boom. I mean, the New York Fed says dysfunction in investment grade corporate bonds is at its highest level in nearly three years, just as AI companies are issuing this record amount of debt that we're talking about. I mean, is is is credit now kind of confirming the warning in tech stocks too, you think?

SPEAKER_03 30:09

I think so. I think those credit spreads are really starting to raise alarm bells. And this is where, you know, as an as an investor, you have to start saying, okay, Kevin Walsh was talking a solid game here. But if there starts to be a credit crisis, is the Fed really gonna say, hey, inflation's still at 3.5%, we're not gonna lower rates, or are they gonna come to the rescue and start printing money again? And this is really something that is as I'm seeing the market react here in real time, is getting my attention that something bigger could be in the works here. And if we see this market roll over, you better believe that there could be some surprise debt issues that pop up very, very quickly.

SPEAKER_02 30:45

You know, and obviously there's one chart that's complicating everything today. That's oil. I mean, crude still back up. I just want to check the updated. Yeah, 84, you know, north of $80 remains sharply higher as this conflict in Iran continues to threaten supply. So, I mean, you recently shorted oil near technical resistance, captured the reversal. Did today's move change the chart or is oil still trading inside that topping structure you talked about?

SPEAKER_03 31:09

Still trading inside the topping structure. You can see again this downsloping trend line from the $120 high that hit in March all through these highs, and that was my short signal right there. I already got out of the short, it was just a really quick trade. But at this point, unless we break out above this trend line, it's just a kind of a sit on the sidelines and let's see where this goes. These two lines will continue to converge over time. Inevitably, oil will have to break one way. Um, and that's going to be something that I will watch and see if I can actually, you know, look to capitalize when we get either a major breakdown or breakout. But right now, oil's getting a bounce. We seem to see this cycle going on and on where, you know, a couple days there's no fighting and the oil drops, and there's a couple positive words about negotiations, and then on the other side, then all of a sudden you have the missiles flying again. And I think the market is just trying to wait this out, hoping that as the midterms approach, uh things will calm down more and more with Iran.

SPEAKER_02 32:05

Yeah, I mean, I wonder, man. I mean, if oil remains elevated while longer-term treasury yields also remain high, I mean, can highly valued tech stocks continue to hold up?

SPEAKER_03 32:15

Yeah, and and the question too is we saw earlier this year that when oil was running up, the safe haven trade was actually going into some of these AI stocks because CapEx, I mean, Google spending money doesn't matter, they don't care with if oil's $80 or $70 or $100 a barrel. They're still spending their $200 billion on chips. So, you know, that's kind of an interesting thing. But at the same time, if we did start to see oil having an impact on consumers, and then all of a sudden the consumer pulls back and there's a trigger of slowdown in the economy, that's where I think it would affect CapEx spending is things could slow down very, very quickly.

SPEAKER_02 32:49

I keep looking over at my chart. Again, I think spot gold just below 4100, sitting around 4060. So obviously a lot of volatility. Gareth, bring this all of this kind of back home for the person watching today's volatility, wondering what to do next. I mean, gold sitting around that 4100 technology seems to be weakening a bit, oil surge in credit showing up in some strain again. I mean, what should they own? What should they avoid? What do you think is kind of a single level that they should watch tomorrow?

SPEAKER_03 33:16

So for me, it's going to be seeing where the markets close and then seeing do we see continuation on the S P 500? I really am a true believer that this, I mean, we are right on this level right now on the chart. Do we close below this 7330 level or not? If we do, there could be some significant downside over the next couple weeks on the SP to this 7,000 marker. So I'm gonna be watching this like a hawk. If it closes above, I'm gonna be neutral to bullish going into tomorrow. I also want to see where the Cosby trades tonight. I think that is a key indicator of the U.S. markets. Even though you think, well, why does South Korea have an impact on the U.S. markets? Well, because it's two major semiconductor stocks, it absolutely does. And then also watch Meta and Microsoft after the bell. That is gonna be huge. What do they announce on CapEx spending? Are they raising totally? Are they gonna say something that's gonna scare the markets? These are all, I mean, this market is so fluid, Jeremy. You got to stay on point.

SPEAKER_02 34:12

Yeah, no kidding. So you're not adding any risk here, obviously, Gareth. I mean, you're not reducing it, but I guess you're you're holding some cash too.

SPEAKER_03 34:20

I am holding some cash, and I have deployed some cash into some semiconductors that have dropped. Like for instance, Sandisk. I've inched in a tiny position here. If we look at the chart on Sandisk here, there's a major trend line. Look at this trend line going back all the way to essentially the beginning of the bull market on Sandisk in 2025 in December, connecting perfectly through this low pivot. And look at what we hit today. Uh again, we're seeing some selling back off in Sandisc into the end of the day, but this is a trend line that after this, what is this? Let's see, is this a 50%? I think it might even be a 55%, yeah, 57% decline in essentially a month. The story's not going away there. And again, as bearish as I was when it was north of 2,000, now I'm starting to say, all right, this is due for a bounce. This is at a technical level. The story of memory demand, again, is not evaporating. These new, these new hubs of of production are not coming online tomorrow by any stretch. And so I think there's at least a technical swing trade bounce here. Uh, I wouldn't marry this thing. I still think it's gonna eventually go lower, but I do think there's some opportunities to deploy cash here at these levels.

SPEAKER_02 35:26

All right, a little trade there. And obviously, we'll keep an eye on the South Korean market too, because it's leading this story. Uh, Garrett Sullaway, Chief Market Strategist of Verified Investing. Always a pleasure, Garrett. Thanks for joining us on an extraordinary afternoon here.

SPEAKER_03 35:38

Thank you, Jeremy. It was a pleasure. Take care.

SPEAKER_02 35:40

Appreciate it. All right, Garrett's targets and technical levels are his own. You can find more of his research through the links below. Here's the question for the comments. I mean, gold fell below that $4,000, broke above $4,100, and we're back below it now. Was that the moment the weak hands finally finished selling, or was it simply a violent fragile reserve-driven short squeeze? You can tell us below. Reread the comments. Now, Chair Kevin Warsh has just concluded his press conference. We'll continue to track the reaction across gold, stocks, bonds, oil throughout the afternoon. Subscribe, turn on notifications. We do this every day. I'm Jeremy Safford. Thanks for watching.

SPEAKER_01 36:13

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SPEAKER_00 36:18

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