OVERVIEW
CoreWeave's Stock Soars After Initial IPO Struggles🚀

CoreWeave, the first all-AI startup to go public, initially faced challenges after its IPO last week. The AI hyperscaler opened its stock at $39, slightly below the offering price of $40, and saw a nearly 10% drop by its second day of trading. However, by day three, CoreWeave's shares surged over 20%, settling around an 18% increase, marking a surprising recovery.

Despite the early volatility, the stock’s rally offers a glimmer of hope for the AI industry, which has been grappling with rising interest rates and inflation, slowing investment in riskier tech ventures. CoreWeave had initially hoped to price shares at $47 but downsized in the lead-up to its IPO, raising concerns about a potential AI bubble.

The company’s IPO, the largest tech offering in four years, is especially significant amid the massive financial commitment required to build AI data center infrastructure. With major partnerships with Microsoft, OpenAI, and Nvidia, CoreWeave is central to the AI space, yet it faces immense market uncertainty. The rise of Chinese AI startup DeepSeek, which trained models more efficiently and at lower costs, has further spooked investors.

CoreWeave’s sharp stock increase signals a shift in sentiment, but experts remain cautious. The AI sector’s future remains unpredictable, and CoreWeave's stock may continue to experience volatility in the coming days as investors assess the long-term prospects of AI-focused public companies.

MARKET
Exposure Today Is A Really Bad Idea

As we approach the end of the week, things are about to get very interesting, especially with the much-anticipated "Liberation Day" announcement. At 4 PM ET today, President Trump is set to reveal new details about his trade policy overhaul, although specifics on Wednesday’s plans remain unknown for now. What we do know is that the new trade measures will be implemented immediately after the announcement.

Trump’s tariff goals are clear: he aims to bring manufacturing back to the U.S., address what he views as unfair trade practices, boost tax revenue, and crack down on migration and drug trafficking. Ahead of the announcement, he’s hinted at reciprocal tariffs, meaning the U.S. could tax imports at the same rates that other countries charge on U.S. exports. Countries like South Korea, Brazil, India, and the EU could be on the receiving end of these new measures.

Additionally, 25% tariffs on imports from Mexico and Canada—two of the U.S.'s largest trade partners—are still a possibility. Trump has pushed for these tariffs to pressure both countries into addressing issues like migration and drug trafficking. Despite delays earlier this year, the tariffs could soon take effect if no agreements are reached. The markets are holding their breath, waiting to see how these moves unfold.

Nasdaq

The Nasdaq showed some positive movement in yesterday's session but is now encountering overhead resistance at the $474 level, which is causing some challenges in premarket. The QQQ has already started to push lower, breaking below yesterday's open price of $476. As we've discussed for some time, the QQQ and tech stocks in general are likely to face continued struggles during periods of uncertainty, as the growth-oriented sectors don't tend to perform well when market risk rises.

In uncertain times, larger market players, those who typically drive the broader market movement, prefer to hold exposure in more defensive sectors. For example, sectors like Gold Miners or Consumer Staples tend to perform better in times of high risk, offering more resilience. Growth stocks, on the other hand, are more sensitive to such uncertainty, particularly when tariff discussions are on the table. The ongoing trade policy changes and tariff talk put added pressure on tech and growth stocks, which are seen as more vulnerable in these conditions.

Today's session is unlikely to provide much clarity, as the market remains in a state of limbo ahead of the tariff announcements later in the day. With so much uncertainty hanging over the market, don't expect any major moves or an impressive session today.

S&P Midcap 400

The midcaps have continued to hold their double bottom formation at the key demand level around $525, with yesterday’s session seeing another noticeable increase in relative volume. However, if we zoom out and look at the 1- or 3-month chart, we aren't seeing any real relative highs, which is expected in this current environment. The session had a long tail, indicating strong buying pressure during the intraday retracement lower, but the declining 10-EMA on the daily chart continued to act as resistance.

The main takeaway here is that we’re at a critical juncture. If the market responds well to today's tariff announcements, we could see the double bottom reversal complete, which would send the MDY higher and potentially trigger long exposure opportunities. On the other hand, if the $525 level breaks, we could see a strong short opportunity.

Russell 2000

The small caps are in a similar position, sitting within a dense supply/demand cluster between $208 and $195. At the time of writing this report, the IWM is testing that $195 level. For the double bottom formation to remain valid, we need to see a reversal and for the IWM to float higher from here. If this level fails to hold, the setup could be invalidated.

DAILY FOCUS
You Won’t Outsmart The Market

As we await the key tariff announcements post-market close, today’s market action is expected to be volatile and unpredictable. It’s not the right environment for high-risk trades. Instead, let’s focus on preparing for tomorrow by scanning for stocks that have shown consistent strength and solid fundamentals, positioning ourselves for future moves.

In trading, the goal is always to position yourself on the higher probability side of a trade. When we talk about higher probability, we’re referring to identifying trades that have a greater chance of success based on the current market conditions, technical setups, and overall market sentiment. However, in order to place those high-probability trades, we need to ensure that we have the right conditions to take advantage of the opportunities the market presents. One of the key factors in making these high-probability trades is directional volatility, but it’s important to understand that directional volatility is not the same as uncertainty.

Understanding Directional Volatility

Volatility, in its simplest form, refers to the degree of price fluctuations in the market or a particular stock over time. However, directional volatility is when price fluctuations are moving in a clear direction. This is the volatility that gives traders an edge—it provides movement in a clear, predictable direction that can be capitalized on. Directional volatility is when price swings are predictable and trending, making it easier to align trades with the momentum.

For example, if a stock is trending higher and shows strong relative strength, and volatility is pushing the stock higher in an orderly fashion, this is directional volatility. You can identify this trend, align with the momentum, and position yourself for profits.

Uncertainty vs. Directional Volatility

Uncertainty, on the other hand, is much different from directional volatility. Uncertainty occurs when there is a lack of clarity on where the market or a particular stock is headed. In uncertain conditions, volatility spikes, but prices don’t have a clear direction—they go up and down randomly without any predictable trend. This is dangerous because it increases the likelihood of false breakouts and whipsaws—situations where prices break out of a level only to reverse sharply shortly after, stopping you out of your trade.

Uncertainty is often created by events like earnings reports, geopolitical news, or, as we’re seeing today, potential tariff announcements, where the market doesn’t know how prices will react. This type of environment is fraught with risk, as traders are essentially guessing on the market’s direction, and it’s hard to form a high-probability thesis.

Directional volatility is the opposite—it’s predictable and allows for well-calculated, high-probability trades.

What to Focus on Today:

1. Identify Stocks with Strong Relative Strength (90+)

   • Focus on stocks with a relative strength rating above 90. This metric shows how well a stock has been performing compared to the broader market. A high RS indicates that the stock has consistently outpaced the market and is likely to lead when conditions improve.

2. Search for High-Growth Stocks (25%+ Revenue Growth)

   • Look for stocks with 25%+ revenue growth over the last year (QoQ).

   • Growth stocks with strong earnings are usually more resilient and ultimately are likely to attract consistent investor capital.

3. Focus on Stocks Respecting Key Moving Averages (10, 20, 50, 200-EMA)

   • Pay close attention to stocks that are holding above or bouncing off their 10, 20, 50, and 200-EMA on both daily and weekly charts.

   • When stocks consistently respect these moving averages, it’s a sign of strong buying interest at those levels, signaling strength. A stock above these moving averages on a weekly chart shows a strong longer-term trend.

While the market is in a holding pattern today, focusing on stocks that exhibit strength through relative outperformance, growth, and technical resilience will position you for future success. By zooming out and looking at the long-term trends (especially on the weekly charts), you’re ensuring that you’re not getting distracted by short-term volatility and can focus on stocks with a proven ability to weather the storm.

Swingly Pro: Helping You Identify High-Probability Trades

At Swingly Pro, we help you streamline this process by providing daily scans, technical analysis, and curated watchlists based on the latest market conditions. If you're looking to save time and focus on high-probability trades, Swingly Pro already provides these insights every day, empowering you to stay ahead of the market.

WATCHLIST
The Strongest Growth Stocks

PLTR: Palantir Technologies Inc.

• PLTR has been one of the standout performers in the growth stock segment, showing resilience as it builds a series of higher lows and starts to trend sideways. This is a sharp contrast to the broader market, particularly in the tech sector, where many stocks have entered a Stage 4 breakdown and experienced significant sell-offs.

• While we're not looking for long exposure in PLTR at the moment, its price action offers an excellent example of the kinds of stocks to watch in your scans. Over the last 6 months to a year, PLTR has shown strong performance, maintaining linearity along its moving averages whenever the stock has broken higher. It has also displayed solid relative strength, indicating that it doesn’t want to break down further despite the broader market conditions.

• Whether PLTR will continue to consolidate and form a solid entry point remains to be seen. However, for now, it’s on our focus list due to its strong performance and potential for a future setup. Keep an eye on how it behaves around current levels as it could provide an interesting opportunity down the road.

CYBR: CyberArk Software Ltd

• CYBR, another standout in the cybersecurity space, is showing similar signs to PLTR, with strong indications that it is gearing up to push higher rather than break down. One of the key observations is CYBR’s reluctance to break below its daily 200-EMA.

• It has touched this level twice consecutively, and both times, we’ve seen a high relative volume push higher. This kind of price action is a strong signal of buying interest and indicates that the stock has strong support at this level.This behavior is a very positive sign for CYBR’s potential to start trending higher, particularly if we see some relief in the market later today.

• If you take a look at the chart of the SPY, which serves as the main proxy for the broader market, you’ll notice something significant: the same double bottom formation that we observed on CYBR is also forming on the SPY. This alignment is important, as it suggests that both the broader market and specific stocks, like CYBR, could be primed for a potential rally.

  

  CYBR Daily Chart

• If we get follow-through in the SPY and the double bottom formation is confirmed, it greatly increases the likelihood that CYBR will also see upward momentum. A confirmed breakout in the SPY would provide a positive catalyst for CYBR to push higher, potentially clearing its neckline and triggering a breakout.