We Have Seen This Before.

I am going to show you something.

Last year, before most people saw it coming, the market followed a very specific sequence. It consolidated in a tight range for weeks. Then it started channeling lower.

Then it broke through the 200-day moving average. Then came the capitulation. Three ugly candles. Boom, boom, boom. Then the rally took it right back up.

I called every step of that sequence in real time.

Now look at what is happening right now.

The consolidation just ended. We channeled lower through December and February. We just broke through the 200-day moving average. Sound familiar?

The 200-day moving average is the long-term trend line that most serious money uses as a floor. When the price cleanly breaks below it, it is not a buy signal. It is a warning. It means the trend has changed, and the crowd is about to get shaken out.

Here is where we are in the sequence right now. We are sitting right at that break. The third box on my chart is empty. That is where capitulation would happen if this pattern plays out the same way it did last year.

I am not saying it will.

The market does not have to rhyme perfectly. But I have been doing this long enough to know that when the same setup shows up twice, you pay attention.

 

CHART 1: SPY 2024/25 — The Pattern That Already Played Out

 

 

Consolidation. Channel lower. Break 200. Capitulation. Rally.

 

CHART 2: SPY Current 2025/26 — The Same Sequence Setting Up

 

 

Consolidation done. Channel lower done. Break 200 done. Third box: empty.

 

What Capitulation Actually Looks Like

Most people think capitulation means the market goes down a little more and then stops. It does not work that way.

Capitulation is a flush. It is the moment when everyone who has been holding on finally gives up together. You get a serious gap down. Volume explodes. The candles get ugly. It feels like the world is ending. And then, almost without warning, it stops.

That is the moment I have been waiting for.

Last year, that flush happened in April. SPY dropped from around $560 down to $490 in a matter of days. The people who panicked and sold at the lows watched the market rip back to new highs within weeks. The people who were ready and watching for the signal stepped in and bought one of the year's best entries.

That is what the third box represents. Not doom. Opportunity.

The Question Everyone Is Asking

Will it happen again?

I do not know. Nobody does. What I know is that the setup is tracking almost perfectly. Consolidation. Channel lower. Break of the 200. We have checked every box so far.

If this follows last year's playbook, we have one more leg lower before the real buying opportunity arrives. If it does not follow the playbook, I will adjust. That is what traders do.

Many traders are obsessed with making money. That is weak. What you want to be obsessed with is the process. Read what is in front of you. Do not trade on hope. Do not trade on fear. Trade the setup.

Right now, the setup says we are not done going lower. When the capitulation candle finally arrives, I will be the first one in the room to tell you. And when I do, that is when we buy.

Game Plan runs every morning before the open. Enter the zone, buy the zone, sell the zone.

That is how we navigate this.

Rock On,

Voz

P.S. Last year, the capitulation candle was the easiest trade of the year. The people who saw it coming were ready. The people watching the headlines missed it. Stay close.