OVERVIEW
Will Today’s Technical Support Hold?

The theme today remains the same as it has been for weeks now—selling, selling, selling. Volatility is running rampant in the equity markets, but not the kind of volatility we want to see. There’s no clear trend to follow, only more of the same high-volume, distributive action that has characterized the past few weeks. Now, the market has finally given up on its attempts to find relief, with all the major indices completely breaking down.

We can speculate on the reasons behind this decline—whether it's the Trump-induced volatility from tariff talks, fears of inflation and rising consumer prices leading to a recession, or something entirely different. However, from a trader’s perspective, it doesn’t matter. Trying to gain an informational edge as a retail trader is a fool’s game, and if you’re relying on that, you’re setting yourself up for failure. What truly matters is focusing on what is actually happening in the market. As Jesse Livermore would say, "What is the tape telling you?"

This morning, we also got a report from ADP about job growth in the private sector for February. The numbers showed that only 77,000 jobs were added, which is significantly below the forecast of 140,000 jobs and a sharp drop from the previous month's 186,000 jobs. When fewer jobs are created, it signals that the economy may be slowing down, which could be concerning for the broader market. This report is especially important as it leads up to Friday’s nonfarm payrolls report, which will give us a clearer picture of the job market. If those numbers also come in weaker than expected, it could signal a broader economic slowdown, putting even more pressure on the markets.

Nasdaq

The Nasdaq has now reached what may potentially be a big turning point, at least in the immediate short term. Since mid-February, we’ve seen volume spike as the QQQ broke below its 50-day EMA and its point of control (POC) at $520. This has led to a dangerous cross of the moving averages, with the 10-day EMA now below the 20-day, and the 20-day below the 50-day EMA.

We’re now testing the 200-day EMA, which also coincides with the 50-week EMA. The volume yesterday was very high—one of the highest we've seen in months. This is significant because the daily 200-day EMA attracted some support, and we saw a green doji candle form amidst a steep downtrend. Typically, a green doji in this context indicates indecision and suggests a potential change in trend. The high volume further confirms that there was a lot of interest at this level.

According to Kell’s Cycle Of Price Action, when reversal extensions happen—meaning sellers have exhausted their pressure and buyers begin to step in—we often see a reversal candle like a green doji accompanied by high relative volume, which is exactly what we saw here. This could signal a turning point for the Nasdaq, but it remains to be seen whether the support holds and the market can shift direction and the trend remains suspect until proven otherwise.

S&P Midcap 400

The midcaps have continued to fulfill what the head and shoulders pattern we analyzed earlier has predicted—a deeper breakdown and markdown phase. We're now seeing this trend gain momentum and follow through to the downside. The MDY has traded more than 65% of its relative volume from last week's candle in just the last two daily sessions this week, indicating that we are likely to see another high relative volume finish.

Notably, we found some support at the demand level around $537 yesterday, which may act as a near-term base. This brings us to what we hope to see for a quick recovery: We need to see sellers getting exhausted and buyers stepping in. A sideways consolidation here would allow us to form a stable platform that could lead to a potential recovery. However, we're not there yet. For now, the focus remains on whether this support level can hold and whether a base can begin to form.

Russell 2000

The small caps are in the same place, as their head and shoulders pattern also predicted a deeper breakdown, and this is materializing right now. In fact, the small caps have seen an even deeper acceleration in their sell-off. Around 70% of the relative volume from last week has been traded in just the first two sessions of this week, which indicates that the selling pressure is intensifying.

Yesterday, they tested a dense demand zone at $203, which did attract some short-term relief. While this might offer temporary support, we need to see whether this level can hold and lead to a more sustained recovery or if the selling pressure will continue to dominate.

DAILY FOCUS
Welcome To The Reality Of Retail Trading

When we survey traders about the biggest mistakes holding them back, 92% point to overtrading as their main issue. It’s not a surprise—many retail traders feel pressure to be in the market constantly, whether it's out of fear of missing out (FOMO) or the belief that if they’re not actively trading, they’re losing opportunities. But the truth is, overtrading is a major hindrance to success.

Here's where we have an edge: As retail traders, we have a massive advantage that institutional traders can't replicate. We don’t need to trade all the time. We have the luxury of stepping back and sitting out when market conditions aren’t favorable. Institutional traders, on the other hand, often need to be active due to their size, mandates, or business structure.

In a world that values constant action and fast decisions, taking a step back is often viewed as a weakness. But in reality, this ability to do nothing when the probabilities aren’t stacked in our favor is the biggest superpower we have. We can afford to wait—to be patient—and only act when the odds are clearly in our favor.

We wish we could sit here and give you a long list of tickers to go and try executing trades on, but that would be disingenuous. Our goal with Swingly is to analyze the markets and be honest with what we see, even if it isn’t always the most fun or exciting. Sometimes the right move is no move at all—and that’s okay. We’re committed to giving you clear, honest insights about the market, even if it means telling you to wait for a better opportunity.

WATCHLIST
This Is What Relative Strength Looks Like

SRAD: Sportrader Group AG

• SRAD continues to climb higher following its breakout in late December, which triggered a +27% rally without closing below its weekly 10 EMA. This performance is impressive, especially considering that nearly 80% of stocks right now are trending below their moving averages.

• We’ve seen a contraction form on SRAD over the past month. However, it’s important to note that buyers have been aggressively stepping in during each of the last two tests of the weekly 10 EMA. This suggests strong interest in the stock. When you look at the accompanying volume, it further confirms that there’s significant participation in the stock.

LMND: Lemonade, Inc.

• LMND is another stock that’s holding up well amid the market volatility and heightened selling pressure. The stock has been building a series of higher lows for nearly two months. Last week, it experienced a significant retracement, only to find strong demand at its 50-week EMA, which ultimately helped the stock close in the green.

• We’re seeing similar price action this week. LMND is showing resilience and stubbornly holding its ground, likely waiting for a relief rally before what could be a big push higher.

• The weekly 200 EMA is currently acting as resistance. However, as most traders know, if the stock breaks through the 200-week EMA—especially if it coincides with a broader market rally—it will be difficult to slow down LMND’s momentum.