OVERVIEW
What You Need To Know

Macro Overview

• Futures higher on optimism Washington will resolve the shutdown; SPX +1%, NDX +1.5%.

• Expect early fade — trapped longs likely to sell into strength after last week’s weakness.

• AI names (NVDA, AVGO) rebounding premarket; China easing rare-earth restrictions supports semis.

Nasdaq (QQQ)

• Strong rebound from 50-day EMA (aligned with 10-week EMA) on 145% volume — heavy defense.

• Ideal setup: controlled pullback into $611–$614 zone for a higher low; avoid chasing ORH.

S&P 400 Midcap (MDY)

• Held $570 demand area and reclaimed above 10-week EMA; short-term bottom likely.

• Heavy resistance between $594–$604 — expect gap-fill or fade on first test.

Russell 2000 (IWM)

• Bounced on 141% volume, but now testing heavy supply at $246 — likely rejection zone.

• Lean short QQQ–IWM on open; prefer waiting for consolidation before new longs.

Focused Stock – AEM

• Perfect technical structure: holding 10-week + 50-day EMA confluence with tight volatility compression.

• Precious metals leadership intact — wait for pullback to ~$164 for entry.

Focused Group – XLU (Utilities)

• Strong bounce off 50-day + 10-week EMA on strong volume — short-term bottom forming.

• Expanding ATR and strong weekly reversal confirm improving trend behavior; utilities likely next leadership leg.

MARKET ANALYSIS
One Good Day Doesn’t Make a Trend

• Futures are bid on optimism that Washington is close to ending the shutdown and we are seeing the S&P +1%, Nasdaq +1.5%.

• This kind of open often invites a fade, especially after a weak prior week. Liquidity tends to get absorbed fast as trapped longs use strength to exit.

• Risk appetite improving with AI leaders (Nvidia, Broadcom) leading premarket after sharp declines last week tied to stretched valuations.

• Shutdown resolution would restore key data releases (CPI, PPI) that were paused, giving traders visibility back into inflation and growth trends.

• Consumer sentiment has fallen to a three-year low amid the shutdown; resolving it could stabilize confidence into the holiday season.

• Sector moves:

  • Semiconductors: China eased restrictions on rare earth exports — SMH +2%, Nvidia +3% premarket.

  • Airlines: United, Delta, American +1–2% as shutdown optimism supports travel.

  • Healthcare: Pfizer announced a $10B acquisition of Metsera, strengthening its obesity-drug pipeline.

Nasdaq

% over 20 EMA: 35.29% | % over 50 EMA: 48.03% | % over 200 EMA: 52.94%

• Daily chart: strong rebound off the rising 50-day EMA, which aligns perfectly with the 10-week EMA which is the key area of intermediate-term trend support we are the most about (weekly charts > daily charts for trend traders).

• Volume confirmation: Friday’s session printed 145% of the 20-day average, confirming a huge influx of participation and an active defense of the trend and this was the highest volume all month (greater than the breakdown volume).

• Structure: this bounce came directly from the prior breakout zone, signaling bulls are protecting the core of the latest rally leg rather than chasing new highs.

• Scenario planning:

  • Base case: expect a short-term fade or retest into the $611–614 zone (green box).

  • Ideal setup: a controlled pullback into that area with contracting volume would be buyable as long as QQQ holds above the 50-day EMA.

  • Risk scenario: failure to hold $609 (Friday’s highs) would shift bias short-term bearish as we would expect buyers to hold here.

• Note: avoid chasing opening range breakouts here. This is a one-day bounce and not yet a confirmed reversal and ORH will have a high failure rate on erratic price action.

S&P 400 Midcap

% over 20 EMA: 44.88% | % over 50 EMA: 37.40% | % over 200 EMA: 52.61%

• Friday’s session: strong rebound holding the $570 zone, a long-standing demand area dating back to June 2025, where price previously rejected before launching the prior uptrend.

• Structural shift: that same region which was once supply, has now flipped into demand, suggesting a short-term bottom has likely formed near $580.

• Trend context: the broader pullback retraced cleanly back over the rising 10-week EMA (aftering pulling into the 20 week EMA and bouncing), maintaining the mid-term structure of higher lows within an established uptrend.

• Key resistance: descending trendline from $608 (red box) now acts as the primary ceiling; price is set to gap above it premarket, trading over the daily Point of Control (POC) at $594.

• Volume profile: heavy supply density between $594–$604, making it unlikely MDY breaks out cleanly on the first attempt and so expect a fade or gap-fill back toward that zone.

• Base case: an early fade to retest $594–$597 would be healthy; that area aligns with both the POC and prior resistance-turned-support.

• Tactical bias: look for stability above $590–$594 to confirm continuation; otherwise, a pullback into $580–$585 remains also buyable as long as breadth in midcaps stays constructive.

Russell 2000

% over 20 EMA: 40.08% | % over 50 EMA: 37.87% | % over 200 EMA: 53.10%

• Friday’s action: strong rebound off support with 141% relative volume, signaling legitimate buyer engagement exactly where it needed to occur.

• Structure: the bounce came directly off a prior supply/demand pivot, a level that’s repeatedly attracted liquidity throughout the last few months.

• Relative strength: IWM is slightly outperforming midcaps (MDY), showing marginal leadership in small caps, but not by a meaningful degree yet.

• Key resistance: price is pushing into $246 (red box), a well-defined supply zone that has capped advances multiple times. The ETF is also entering a high-volume node, which often acts as a magnet for mean reversion.

• Expectation: we’d be cautious chasing strength here. A rejection from $246 is the higher-probability scenario given the context and positioning into resistance.

• Our bias:

  • We’d lean toward short exposure on the open across the QQQ–IWM complex, rather than getting aggressive with opening-range breakout longs.

  • This isn’t a bearish macro call as the bounce across indices was strong, but the ideal entry for a long trader was Friday’s reversal, not today’s gap.

  • Early buyers are likely to trim into strength, setting up for a fade or consolidation before any sustainable follow-through.

FOCUSED STOCK
AEM: The Precious Metals Are Back

ADR%: 3.51% | Off 52-week high: -13.9% | Above 52-week low: +118.0%

• Structure: AEM continues to form a tight consolidation right off its rising 10-week EMA and 50-day EMA, holding trend support cleanly for the past two weeks.

• Volume profile: price bounced precisely off its Point of Control (POC) two weeks ago, confirming obvious accumulation at that zone.

• Context: one of the most technically constructive setups in the metals space, with gold (XAUUSD) and silver both showing notable strength which both will act as a critical tailwind for miners.

• Weekly chart: volatility compression along the 10-week EMA following a strong advance which shows a likely continuation in this stage 2 rally.

• Sector positioning: precious metals remain a leading group (our personal favourite group), and AEM continues to anchor that leadership as a top candidate for long exposure if strength in gold sustains.

• Note: we’d wait out the first 15–30 minutes of the session before engaging. Ideally, we’d want to see a controlled pullback into $164 rather than buying blindly off the open.

FOCUSED GROUP
XLU: A Perfect Bounce

• Structure: XLU posted a decisive bounce on Friday directly off the rising 50-day EMA, which also aligns with its 10-week EMA on what was a perfect confluence of mid-term trend support.

• Volume confirmation: session came on the highest volume of the week, signaling a real surge in buyer defense and likely exhaustion of short-term selling pressure.

• Range behavior: the move expanded ATR sharply, clearing out the prior descending range in one session which is an important character shift that often precedes reversal attempts.

• Weekly view: strong reaction off the 10-week EMA reinforces the idea of a short-term bottom formation within the utilities space and we would look to be net long Utilities in the next few weeks.