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Inflation Surges, Market Technicals Remain Strongly Bearish, Here Are The Trade

Channel: Verified Investing Published: 2026-02-27 16:46
Verified Investing

Weekly market wrap from Gareth Soloway arguing that despite a calm tape, the chart setup remains bearish across major indices, yields, and financials, while gold/silver and Bitcoin are still constructive in his framework.

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Detailed summary

Gareth Soloway, chief market strategist at verifiedinvesting.com, opened by saying the latest PPI inflation print was materially hotter than expected, with both headline and core readings above forecast, and he framed that as evidence inflation is moving back toward a 3%–4% zone rather than the prior 2%–3% expectation. Despite that, he noted the market’s immediate reaction was relatively muted, with the S&P 500 only modestly lower on the day and still trapped in a choppy, year-to-date range. His central market call was that the overall chart structure remains bearish. On the S&P 500, he highlighted a key downside break area around 6790, tied to a developing head-and-shoulders pattern, and said a break there could trigger a larger flush toward 6500. …

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Main takeaways

  1. Hot inflation did not push yields higher; Gareth read the falling 10-year yield as a recession/stagflation warning.
  2. He remains bearish on the S&P 500 and Nasdaq, with specific downside levels around 6790 on the S&P and 20,000 on the Nasdaq.
  3. Volatility compression can break the market either way, but he thinks the current setup favors a downside volatility spike.
  4. Financials are a key stress point in his view, especially Goldman Sachs and American Express, which he links to private credit/private equity risk.
  5. He sees AI as a force for job displacement and potentially weaker consumer demand, not just higher corporate margins.
  6. Gold and silver are treated as safe-haven trades, partly supported by geopolitical risk and oil strength.
  7. Bitcoin remains bullish in his framework as long as key support holds, with altcoins potentially having more upside if crypto structure stays intact.

Market read by horizon

Short term

Near term, the tape looks vulnerable: if S&P support near 6790 gives way or VXX clears resistance, the market could quickly shift from sleepy chop to a sharper risk-off move. That said, until those levels break, the setup is still a wait-for-confirmation trade rather than an outright sell signal.

  • Watch the S&P 500 around 6790; he sees that as the immediate bearish trigger if it breaks.
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  • Watch VXX resistance for a volatility breakout confirmation.
  • Watch NVDA trendline support next week; he thinks a break could send it toward 150.
Mid term

Over the next several weeks, the base case is a topping process in equities with the Nasdaq and financials doing the most damage if support fails. If yields keep falling while inflation stays sticky, the market may increasingly price a slowing-growth / stagflation mix, which would favor defensives, metals, and cash-like positioning.

  • Over the next few weeks to months, he expects the S&P and Nasdaq to resolve their sideways ranges with downside risk dominant.
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  • His base case is a Nasdaq move toward 20,000 over 3–6 months, with the possibility of a bounce there before any larger decline.
  • He thinks yields may keep drifting lower if the market continues to price slowing growth despite inflation staying elevated.
Long term

Structurally, the transcript argues we may be moving into a regime where sticky inflation, weaker growth, and AI-led labor disruption coexist. If that regime persists, the lasting implications are lower multiples for cyclicals and financials, more demand for hedges, and a more polarized economy with a narrow set of AI beneficiaries.

  • He is framing the current environment as potential stagflation: sticky inflation plus slowing activity.
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  • He sees the private debt/private equity area as a structural risk that could matter beyond the current trading cycle if it spills into bank balance sheets.
  • He believes AI will be a lasting labor-market disruptor, widening wealth concentration and pressuring employment over time.
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Key claims (11)

0:30
BEARISH inflation inflation/PPI

The latest PPI inflation data came in sharply above forecast, with both headline and core readings hotter than expected.

He cites specific year-over-year and month-over-month figures versus forecast.

2:10
BEARISH equities S&P 500

The S&P 500 remains in a choppy range, but a break below 6790 could trigger a larger decline toward 6500.

He identifies a head-and-shoulders breakdown level and a downside target.

3:10
BULLISH volatility VXX

The VXX is pressing resistance, and a breakout would likely coincide with rising fear and falling equities.

He explicitly links VXX trend-line breakout to a market selloff.

Unlock 8 more claims See the full bullish, bearish, and counter-consensus argument map extracted from the transcript. Unlock all claims

Assets discussed (16)

S&P 500
BEARISH index

He says the index is in a choppy range and is watching 6790 as a downside break point that could lead to 6500.

VXX — VXX
BULLISH etf

He treats a breakout in VXX as a sign that fear is rising and equities are falling.

Unlock the full asset map (14 more) See all assets mentioned, their directional bias, and the exact reasoning. Unlock asset map

Where this transcript pushes against consensus

  • The claim that falling yields after hot inflation necessarily signals imminent recession is plausible, but he does not separate growth concerns from technical bond-market positioning or demand factors.
  • The private equity/private debt bubble thesis is asserted strongly, but the transcript gives limited direct evidence beyond price action in Goldman and American Express.
  • His NVDA and Nasdaq downside targets are chart-based and specific, but he does not quantify the probability of a bounce versus a full breakdown beyond directional confidence.
  • The AI/job-loss argument is directionally coherent but rests more on extrapolation from Block’s layoffs than on broader labor-market evidence in the transcript.
  • The Iran/geopolitical safe-haven explanation for metals is possible, but he presents it as a partial inference rather than a demonstrated catalyst.

Topics

inflationS&P 500Nasdaqvolatility10-year yieldsstagflationfinancialsprivate debtAI layoffsgold and silver

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