MARKET ANALYSIS
Here’s All You Need To Know

• The market is attempting to stabilize this morning after yesterday’s geopolitical-driven selloff, with Dow, S&P 500 and Nasdaq futures all trading higher premarket.

• The important point is that we are not seeing a panic response. The VIX is not spiking aggressively, futures are firm, and crude is pulling back slightly despite another round of U.S.-Iran headlines.

• Yesterday’s weakness was driven by renewed Middle East escalation, with Trump warning Iran that it would be “blown off the face of the earth” if it targeted U.S. vessels in the Strait of Hormuz.

• The market is still watching the Strait extremely closely, especially after reports that Iran fired at a South Korean cargo ship and after the U.S. reportedly sank Iranian boats in the region.

• Even with those headlines, WTI crude is trading around $104, which is elevated but not currently accelerating in the same way it did during prior escalation spikes.

• That matters because oil remains the most important macro pressure point for growth stocks. If crude starts pushing sharply higher again, inflation risk comes back into focus and the market will likely pressure the most extended growth names first.

• For now, though, the market is showing resilience. S&P 500 futures are up around 0.4%, Nasdaq futures are up around 0.6%, and QQQ is also moving higher premarket.

• The broader message is still the same: growth leadership remains intact, but the market is now dealing with technical extension across the strongest areas.

• Some of the Magnificent Seven are beginning to show exhaustion after the aggressive rally from the March lows. META has already broken down after earnings, and NVDA has started to show short-term weakness after a very extended move.

• This does not mean the growth trade is broken. It means the cleanest part of the move is likely behind us, and traders need to become much more selective with entries.

• The AI theme is still the dominant leadership pocket in the market. IBD highlighted that nine S&P 500 stocks have already doubled in 2026, and all of them are AI-related plays.

• That is important because it confirms that institutional liquidity is still aggressively rewarding AI exposure, even while parts of the market are dealing with geopolitical risk and oil volatility.

• Palantir is a good example of how strong the AI theme still is under the surface. The company beat expectations, reported 33 cents adjusted EPS on $1.63B revenue, and raised full-year sales guidance.

• The fact that PLTR is still down premarket despite strong numbers shows that expectations in AI are extremely high. Strong results are no longer enough by themselves if the stock has already priced in perfection.

• That is the market we are in now. AI and growth remain the strongest themes, but the bar is much higher and technical extension matters more.

• We are also seeing several other earnings movers confirming that this remains a stock-picker’s market. Pinterest is surging premarket, GlobalFoundries is higher, while Fabrinet is sharply lower despite being part of the broader AI supply chain discussion.

• The key takeaway is that leadership is still there, but dispersion is increasing. Not every AI-related stock is being rewarded automatically anymore.

• Today also brings important economic data, with job openings, new home sales and ISM services all due at 10 a.m. ET.

• The ISM services print will matter because services inflation remains one of the areas the Fed will be watching closely, especially with oil still elevated.

• The market backdrop is still constructive, but it is no longer clean enough to chase everything. The better opportunities are now pullback longs in the strongest growth groups, not extended breakout entries after several weeks of straight-line expansion.

• Today’s focus should be simple: watch whether oil stays contained, watch whether the VIX remains calm, watch whether NVDA and the Mag 7 stabilize, and watch whether AI leaders can keep holding support after the first real signs of exhaustion.

S&P 500

44.93%: over 20 EMA | 51.29%: over 50 EMA | 53.47%: over 200 EMA

• SPY continues to behave well, with price once again bouncing off the rising 10-day EMA.

• That 10-day EMA test remains important because the visible range volume profile is still showing very dense buyer aggression at that level.

• We saw roughly 6M shares traded green around that support zone versus only around 2M shares traded red, which reinforces the point that buyers are still showing up aggressively on pullbacks.

• We are also seeing a slight uptick in relative volume over the last week, which is important because the biggest criticism of this entire rally has been the lack of real volume expansion.

• That said, SPY is still sitting more than 5.2 ATR multiples above its 50-day EMA, so we cannot ignore the fact that the index is now technically extended.

• The same issue is visible across a lot of the strongest groups. For example, XSD semiconductors remains around 11 ATR multiples above its 50-day EMA, which is extremely stretched.

• This does not mean the market is weak. It means the strongest parts of the market are no longer offering the same clean asymmetry that they offered earlier in April.

• The more likely scenario now is internal rotation within equities rather than a full market breakdown.

• We already discussed this a few reports ago with XSW software, where we were very bullish on the base structure, and that group is now beginning to rally.

Nasdaq

59.40%: over 20 EMA | 60.39%: over 50 EMA | 53.46%: over 200 EMA

• QQQ remains the beating heart of the U.S. equity rally and the Nasdaq is still where the strongest growth leadership is coming from, but we are also seeing a very aggressive divergence between rising price action and declining relative volume since April 1st.

• That divergence does place QQQ in a more vulnerable position, especially with the index now sitting around 6.7 ATR multiples above its 50-day EMA.

• Again, that does not mean the trend is broken, but it does mean chasing marginal highs becomes a lower-quality entry tactic.

• The more important area to watch remains the Magnificent Seven, which we discussed in detail yesterday.

• These seven stocks are still where we see major relative strength in the market.

• They also matter structurally because they accounted for roughly 50% of all S&P 500 gains in 2025 and almost 45% in 2024, meaning they are still the real engine behind the growth trade.

• What is constructive right now is that the Magnificent Seven are not breaking down. They are consolidating after a large move, cooling off, and still holding their rising 10-day and 20-day EMAs.

• They have also cooled to around 4.3 ATR multiples above the 50-day EMA, which is far healthier than the Nasdaq itself.

• As long as the Magnificent Seven continue to hold these rising short-term moving averages and keep tightening, we should expect the Nasdaq to remain structurally strong.

• The weakness only becomes more meaningful if the Mag 7 begin losing their rising 10-day and 20-day EMAs with expanding sell volume.

S&P 400 Midcap

46.25%: over 20 EMA | 61.00%: over 50 EMA | 54.75%: over 200 EMA

• MDY is still getting very tight and continues to hold its support structure around the rising 20-day EMA at $655.

• That $655 level remains important because the visible range volume profile shows dense buyer aggression there.

• We have seen more than 1.1M shares traded green around that price level versus only around 500K shares traded red, which is a strong imbalance in favour of buyers.

• The constructive part of the MDY setup is that the recent consolidation has allowed the index to cool off technically.

• ATR multiple extension has now fallen to around 2.35x, which is far healthier than what we are seeing in QQQ or SPY.

• We would not be surprised to see another retest of the rising 20-day EMA around $655.

• However, a clean break below that level still looks unlikely based on current buyer aggression.

• Even if MDY does undercut $655, the rising 10-week EMA around $646 is the next major support area.

• That would only be around a -2% downside move, which we would still classify as a healthy and contained worst-case pullback rather than a trend failure.

Russell 2000

53.99%: over 20 EMA | 67.79%: over 50 EMA | 58.70%: over 200 EMA

• IWM remains materially stronger than MDY and SPY, with a relative strength rating around 76 versus the SPX.

• The Russell has also had a low-volume rally since April, but the key difference is that price has been supported much better during the last three-week consolidation phase.

• We continue to see higher lows, tight action, and buyers defending pullbacks.

• This is exactly what we want to see from a risk-on proxy.

• Across all the indices, the recent consolidation phase has been useful because it has allowed breadth to cool off.

• Previously, we had more than 70% of stocks above their 20-day EMAs, which was too extended and left very little room for positive long asymmetry.

• Now that breadth has cooled, the market has more room for constructive long exposure again.

• This is important because it means the setup is no longer as stretched as it was last week, especially in the smaller and mid-cap areas.

• IWM still looks like one of the best indices to track for aggressive growth exposure, provided entries come from pullbacks or tight continuation structures rather than chasing vertical candles.

FOCUSED GROUP
ETHUSD: A Rally is Coming…

• Our focused group today is ETHUSD, which is building a very strong base above the rising 10-week EMA near $2,300.

• That level is being supported well, and ETH is now starting to get tighter on the daily structure.

• This matters because ETH and BTC tend to run in tandem with growth stock rallies, and the current strength in equities could easily coincide with a renewed expansion in crypto.

• ETH has been deeply sold off throughout 2026, which gives it meaningful upside asymmetry if this base resolves higher.

• The issue with trading ETH directly is that it can be extremely choppy, which means some traders may prefer to express the same theme through an equity vehicle.

  

  BMNR VRVP Daily & Weekly Chart

• For that reason, we are watching BMNR very closely.

• BMNR has a similar base and very similar general price structure to ETHUSD.

• This makes sense because BMNR owns more than 2% of the ETHUSD float, giving it direct exposure to the ETH move while also offering a higher average daily range.

• BMNR currently has a 90 relative strength rating versus the SPX, which tells us it is already acting as one of the strongest vehicles for this theme.

• The key advantage with BMNR is that it is trading the same general fractal as ETH, but with higher volatility and cleaner equity-market execution.

• We would be cautious about chasing this morning’s gap up immediately.

• The better setups would either be entries on weakness into support or an opening range high entry if the 15-minute opening range high is taken out cleanly.

• If BMNR holds the gap, tightens, and then breaks the 15-minute opening range high with strong relative volume, we would be looking for immediate long exposure.

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