OVERVIEW
Trump’s Tariffs Scare The Market

Wall Street is waking up to some rough news—US stock futures are pointing to sharp losses as investors react to President Donald Trump’s latest move: placing big tariffs on imports from China, Mexico, and Canada. These new 25% taxes on goods coming into the US are part of Trump’s plan to shake up global trade and put America first. But while he sees this as a way to get other countries to “pay up,” businesses and investors see a different picture—one filled with uncertainty, rising costs, and the risk of an all-out trade war.

The tariffs are expected to hit American consumers directly. When companies have to pay more for imported goods, they often pass those costs on to shoppers, meaning higher prices for everyday items. This could lead to inflation, where the cost of living goes up, and people start cutting back on spending. These tariffs could slow US economic growth by 1.2% and push inflation up by 0.7%. In other words, this policy could make everything more expensive while also weakening the economy at least in the short term.

On the global stage, the move is making waves. Canada is already signaling that it might fight back with its own financial countermeasures, and with Trump’s tough talk, hopes for a peaceful trade resolution are fading fast- this is the most aggressive move from a US president in nearly a century.

For now, all eyes are on the upcoming conversations between Trump and leaders from Canada and Mexico. Will they negotiate, or will this escalate into a full-blown trade war? The answer will have a major impact on markets, businesses, and consumers in the coming weeks and this seriously means a likely surge in volatility in the markets that we do not want to be exposed to.

Nasdaq

The Nasdaq has been stuck in a choppy, sideways range for nearly two months, struggling to find direction. On Friday, we saw a strong rejection right at the declining resistance level around $532 on QQQ, which sent the index sharply lower, wiping out all of its recent gains—and then some. The selling pressure was intense, with QQQ barely managing to find support at its 10 & 20-day EMAs, right at the Point of Control (POC)—a level where we’ve seen a lot of back-and-forth trading in recent weeks.

Now, in pre-market trading, things are looking even more concerning. QQQ has broken below all its rising support levels, including the 50-day EMA, a key trend indicator. This is a crucial moment because this ascending support has consistently been a level where buyers have stepped in to prevent deeper pullbacks.

The big question now is: Is this the start of a larger correction? If QQQ fails to reclaim support and continues breaking down, it could signal a true breakdown from what has so far been a multi-month bull flag. This would shift market sentiment significantly and could lead to a deeper pullback. How price reacts in the coming sessions will be critical in determining whether this is just another shakeout/ overreaction—or the beginning of something bigger.

S&P Midcap 400

Midcap stocks have been consistently rejected at their declining resistance level, which has been in place since the sell-off began in late November/early December. On Friday, the MDY was rejected again—this time on high relative volume—and lost its Point of Control (POC), a key level where heavy trading activity has taken place. This breakdown suggests that sellers have been aggressively taking profits, adding to the downside pressure.

Now, in pre-market trading, MDY is gapping lower, breaking below all of its short-term moving averages on the daily timeframe. It’s currently sitting on a dense cluster of potential support between $580-$565, an area where, according to the Visible Range Volume Profile (VRVP), a large amount of trading volume has occurred. Bulls will be hoping this zone holds to prevent further downside.

Technically, the sharp breakdown below $590 wasn’t all that surprising. The VRVP shows very little volume in that range, meaning there wasn’t much in the way to slow the sell-off once price lost that level.

Russell 2000

It’s no surprise that small-cap stocks are getting hit the hardest in this market downturn. As the riskiest capitalization group, small caps tend to be more volatile and sensitive to economic shifts, making them the first to suffer when uncertainty rises. Today, IWM (the small-cap ETF) is gapping right at its Point of Control (POC) level of $221, a key area where the most trading volume has occurred in recent months. This level is crucial because it often acts as a battleground between buyers and sellers—if buyers step in here, we could see a bounce, but if it fails, it opens the door for further downside. The POC also represents an area of high liquidity, meaning big investors (institutions, hedge funds) have likely built or offloaded large positions there. If price stays near the POC, it means the market is still in balance. If it breaks away, it suggests a new trend may be forming.

If IWM breaks below $221, the next major support to watch is the rising 200-day EMA at $217, which held as a strong floor in mid-January. This is the last major safety net before small caps officially enter correction territory, meaning a decline of 10% or more from recent highs. Given how aggressive the selling has been, if that level doesn’t hold, we could see a deeper pullback.

DAILY FOCUS
Do You Really Want Exposure Now?

If you’re reading this, chances are you’re a momentum swing trader—just like us. And as swing traders, we don’t chase dips hoping they’ll bounce. We trade momentum, we trade trend, and right now, the trend is looking shaky.

This is where many traders go wrong—they start mixing strategies. When the market sells off, they suddenly start thinking like long-term investors, buying dips without confirmation. But that’s not our game. We need clear direction, strong trends, and setups with defined risk-reward. If the market is breaking down, stepping in too early is like trying to catch a falling knife. Instead of forcing trades, we wait for the market to prove itself—either by reclaiming key levels or establishing a new structure we can trade with confidence.

Before adding any exposure, ask yourself: “Do I have an edge here?” In other words, does this setup align with a tested and proven strategy that has consistently allowed you to generate alpha and beat the market? More importantly, is the current market environment one where your strategy actually has a high probability of follow-through?

If your strategy is based on momentum to the upside, the answer is a resounding no—this is not the time. Right now, cash is your best friend.

The reason is simple. First, swings take time to develop—this isn’t day trading. Swing trading requires an uptrend, and clearly, that’s not the case right now. Second, for momentum to thrive, big money needs to be flowing into equities. But right now, we’re seeing risk-off behavior—safe-haven assets like gold and Treasuries are soaring while equities struggle. That tells us institutions aren’t in buy mode, which means momentum setups are far less likely to work.

This shouldn’t worry you. You don’t need constant exposure. In fact, doing less is often better. Overtrading is what kills traders. Most can make money when conditions are favorable, but they give it all back—and then some—during bad periods because they lack the discipline to step back, study, research, and wait.

Cash is still a trade.

WATCHLIST
The Few Showing Resilience

RGTI: Rigetti Computing, Inc.

• RGTI is one of the few high-flying momentum leaders that is still holding its bull flag pattern—for now, at least. This stock has been on an incredible run recently, driven by its quantum computing focus and surging relative volume over the last few months. Given its strength, we'll continue to monitor RGTI, but only if it maintains its rising 50-day EMA on the daily chart. This level has been crucial, and any breakdown below it would signal a potential shift in momentum.

• On Friday, we saw a sharp rejection on high relative volume right at the descending resistance level. This price action suggests that sellers are stepping in, but the big question for today is whether buyers will be able to fight back and continue the upward surge, or if seller aggression will overpower them with fear running high. The market’s current volatility and nervous sentiment are real risks, but RGTI’s performance over the past few months shows it could still hold its ground if buyers remain active.

TSLA: Tesla, Inc.

• TSLA is still managing to hold up and continues to trade sideways in a multi-week volatility contraction pattern (VCP). While this pattern suggests a potential breakout, the analysis here is not too different from RGTI—we need to see the rising 50-day EMA respected, with buyers stepping in to keep the pattern intact.

• If the stock fails to hold the 50-EMA and buyers don't step up, the next move could be a breakdown, leading to a possible Stage 4 downtrend for TSLA.