MARKET ANALYSIS
Here’s All You Need To Know

• The key shift this morning is that the market is once again showing how reluctant it is to price a deeper geopolitical risk event, even with the ceasefire deadline now directly in focus.

• Futures are higher despite another unstable 24 hours in the Middle East, largely because traders are responding to the idea that negotiations are still alive after Trump’s latest comments that he expects a deal with Iran before the ceasefire expires.

• That matters because yesterday’s weakness never developed into genuine panic selling and instead it remained controlled, rotational, and relatively shallow considering how stretched the market had become after the Nasdaq’s 13-session winning streak.

• Oil easing slightly this morning is also helping sentiment. After the sharp spike yesterday, even a modest pullback in crude immediately removes some of the inflation pressure that had started to re-enter positioning.

• The market is essentially still trading the same framework: as long as oil does not begin accelerating uncontrollably higher, equities are willing to keep looking through the geopolitical noise.

• What continues to stand out is how little real damage sellers have been able to inflict despite repeated headlines that, under normal circumstances, would usually trigger far more defensive positioning.

• Underneath the surface, the tone is still risk-on. Asian equities remained firm overnight, with South Korea making new highs, semiconductors continuing to lead, and broader global participation staying supportive.

• That tells you this is not simply a narrow U.S. index rebound anymore — global equity participation remains constructive, especially in technology-linked regions.

• The other important macro point is that earnings continue to quietly support the tape.

• Strong numbers from UnitedHealth Group Incorporated this morning are helping futures, while capital continues to flow aggressively into AI infrastructure after Amazon expanded its commitment to Anthropic.

• That keeps reinforcing the same theme we have been discussing for weeks: growth leadership remains intact, and that leadership is still what is preventing broader weakness from developing.

• The bigger concern remains unchanged: this rally still lacks convincing volume confirmation.

• Even with repeated upside pushes, participation has not expanded enough to suggest broad institutional urgency.

• That means the market is still vulnerable to short-term air pockets if headlines worsen or if buyers temporarily step back.

• At the same time, breadth has stayed strong enough that every shallow dip is still being absorbed rather than sold aggressively.

• So the current macro picture is a market that remains technically resilient, fundamentally supported by earnings and growth leadership, but still not fully confirmed by the type of participation you would ideally want to see after such a large move.

• The most important thing now is whether the next few sessions produce either:
  (1) proper volume expansion if price continues higher, or
  (2) a controlled pullback that holds support cleanly.

• Until one of those two happens, the market remains strong, but slightly incomplete in terms of conviction.

• Please also revisit The Swingly Sunday Report that was emailed to you on sunday — that remains important context here because it includes the latest COT positioning, full 11 GICS sector breakdown, and broader intermarket structure that explains why this rally has held better than many expected.

S&P 500

78.13%: over 20 EMA | 60.63%: over 50 EMA | 59.04%: over 200 EMA

• SPDR S&P 500 ETF Trust continues to behave exactly as it has for the last several sessions: price remains strong, but the defining characteristic is still the failure to see meaningful volume expansion.

• Yesterday’s pullback was actually very constructive because the decline happened on only 51% relative volume versus the 20-day average, which is extremely light participation for a session that tested lower intraday levels.

• What mattered far more was how aggressively buyers responded once price reached the $706 area, which was effectively Friday’s low.

• At $706 exactly, we saw roughly 3.2 million shares traded green versus only 1.4 million traded red, which is a very clear imbalance showing buyers stepping in aggressively rather than passively waiting.

• That same behaviour remained visible all the way through the upper part of the range.

• Around $710, we saw roughly 4 million shares traded green against only 1.7 million traded red, again confirming that the higher end of the range is still being actively bid.

• So although the rally remains low volume, the order flow still clearly favours buyers.

• That is important because we are now roughly 11% off the lows from the $629 area, yet sellers still have not produced any meaningful pressure.

• From an extension standpoint, SPY is now sitting around 4.05 ATR multiples above the 50-day moving average, which means we are elevated but still not yet in the type of technical extension zone that usually forces concern.

• Normally, true reversal risk becomes far more serious once you move beyond roughly 5 to 6 ATR multiples, and even more so beyond that.

• The macro backdrop is helping sentiment to some extent, with renewed optimism around a possible ceasefire after fresh comments from Trump, but the geopolitical picture remains unstable enough that it cannot be treated as fully resolved.

• Structurally, this still looks partly like a technical rebound, but it is becoming harder to dismiss because the buyers underneath remain extremely consistent.

• The bigger question now is whether next week’s positioning data confirms that open interest has been rebuilding behind this move.

• As covered in Sunday’s report, semiconductors remain the key leadership engine here.

• That group is one of the few areas actually showing genuine volume expansion and currently carries some of the strongest relative strength in the entire market.

• Breadth remains very elevated, with 70% of S&P stocks above their 20-day moving average.

• That is already hot, but historically still leaves room before the type of extreme breadth that usually precedes short-term reversals.

S&P 400 Midcap

84.71%: over 20 EMA | 72.43%: over 50 EMA | 65.41%: over 200 EMA

• SPDR S&P MidCap 400 ETF Trust delivered one of the strongest sessions yesterday relative to the broader market.

• Mid-caps materially outperformed and printed an intraday range of roughly 1%, which was actually slightly below their normal expected daily movement.

• Relative volume improved modestly to around 70% of the 20-day average, which still is not high, but better than what we continue to see elsewhere.

• Price is now pushing again pre-market and remains firmly near highs.

• From an extension perspective, MDY is only around 3.2 ATR multiples above the 50-day moving average, which is not technically stretched at all.

• The bigger issue again is breadth.

• We now have roughly 85% of mid-cap stocks above their 20-day moving average, which is extremely hot.

• However, what is genuinely impressive is the broader participation underneath that move.

• Around 72% of stocks are above the 50-day EMA, and 65% are above the 200-day EMA.

• That tells you this is not simply short-term overextension as it means stocks are not just bouncing briefly and failing — they are materially reclaiming broader trend structure.

• That is a much healthier signal than many realise and even so, for fresh exposure directly into MDY, caution still makes sense simply because breadth is already very mature in the short term.

• These indices remain more useful as broad proxies for market health rather than direct trade vehicles at this stage.

Russell 2000

87.36%: over 20 EMA | 75.92%: over 50 EMA | 63.44%: over 200 EMA

• iShares Russell 2000 ETF remains one of the strongest areas in the market from a relative strength perspective.

• Breadth remains extremely elevated, with 87% of stocks above the 20-day EMA and 76% above the 50-day EMA.

• That is exceptionally strong participation underneath the surface.

• Small caps are now again pressing into highs and continuing to gap higher.

• From an extension standpoint, IWM is now around 4 ATR multiples above the 50-day moving average, which means it is becoming warm but still not yet in dangerous reversal territory.

• What continues to stand out most is the buyer aggression visible inside yesterday’s session.

• Around $274.53, near the session lows, we saw roughly 2 million shares traded green versus only 1.1 million red.

• By the midpoint near $276.50, that increased to roughly 2.3 million green versus only 1.2 million red.

• In other words, throughout almost the entire candle range, buyers were consistently the aggressive side.

• Sellers are not pressing and instead hey are passive, while buyers continue lifting offers and that is why, despite low headline volume, the tape still feels structurally very strong.

• The move remains impressive because this is exactly what strong markets often look like: low urgency from sellers, steady aggression from buyers.

FOCUSED GROUP
XLV: Watch Healthcare For A Breakout

• We are watching Health Care Select Sector SPDR Fund very closely here because healthcare is now forming one of the cleaner technical structures in the market.

• The daily chart has now built an extremely tight 12-day flag, with very controlled price action and little volatility.

• More importantly, the broader structure increasingly resembles a cup-and-handle formation.

• The left side of that cup was formed by the sharp decline earlier in the quarter, followed by the rebound from the late-March undercut of both the 200-day EMA and 50-week moving average.

• That rebound has now produced a very clean right-side handle.

• The reason healthcare matters here is because pharmaceuticals are doing most of the work underneath.

• That is critical because pharmaceuticals remain the largest weighted component inside the healthcare complex.

• When the highest-weighted group begins to strengthen, it usually drives the broader sector with it.

• We still need price to clear the declining 10-week and 20-week moving averages near 149.61, because there is still visible supply sitting there.

• However, structurally the setup is improving materially.

• The strongest pullback entries were around the 200-day EMA and 50-week moving average between roughly 146.5 and 147.

• From there, the first obvious upside objective remains the 150 area, where weekly volume profile begins to thicken again.

• If healthcare clears that zone cleanly, it becomes a much more serious rotational candidate, especially if growth leadership begins cooling even slightly.