Gareth Soloway argues the S&P 500 just reached major technical resistance after a strong bounce and that the rally is likely a trap. He links the setup to oil rebounding, sticky inflation, Fed rate-cut constraints, and a broader recession backdrop.
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Gareth Soloway opens by identifying himself as the chief market strategist at verifiedinvesting.com and frames the video around the S&P 500's rally into a major resistance zone. He says he had previously given a downside target and that the market reached it, then describes the move as a retrace back to the “scene of the crime” after breaking a key parallel trend line and completing a rounded-top/distribution pattern. He notes that the S&P had a roughly 7% bounce from the lows, which matched his prior call, and says the index is now pulling back from resistance and likely to backfill over the next week or so. He then broadens the discussion to crude oil, saying oil has bounced back up to around $99 a barrel and that the near-term path depends on whether the ceasefire / Strait of Hormuz situation results in a durable deal longer than two weeks. …
Near term, the setup looks tactically stretched: he expects the S&P 500 to fade after hitting resistance while oil remains an immediate inflation and sentiment headwind. The key short-term risk is a continuation squeeze above resistance, but he treats that as a lower-probability move.
Over the next several weeks to months, his base case is a failed breakout in equities, followed by a broader pullback if oil stays elevated and the Fed remains constrained. The view would weaken if oil quickly drops on a durable geopolitical resolution and the index reclaims resistance with follow-through.
Structurally, he is calling for a late-cycle/top-of-cycle regime where credit stress, sticky energy costs, and softer consumer conditions eventually force a deeper equity drawdown. The long-run implication is that the current rally is part of a larger distribution phase rather than the start of a new secular advance.
The S&P 500 has reached a major resistance zone after the prior bounce.
He says the index went back to the trend line and should now pull back.
The prior bounce in the S&P 500 was about 7%, matching his earlier target.
He states the move from the low to yesterday's high was 7.4% and was in line with his call.
The current pullback is a classic retrace to prior support, which often turns into resistance.
He frames the move as a 'retrace to the scene of the crime' and expects rejection there.
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