OVERVIEW
Expect Choppy Action Today

🟥 Risk-Off: Price action is mixed, and with tomorrow’s FOMC decision looming, markets are likely to churn in place. Friday’s high-volume selloff created technical damage in IWM and MDY, and although both bounced yesterday, conviction remains light.

🧭 Inflection Territory: QQQ continues to lead, but it’s now back into dense overhead supply near all-time highs. The leaders e.g. HOOD, PLTR, and MU are still working, but most growth names are showing fatigue. Watch for failed follow-through.

🌍 Macro Overhang: Middle East headlines remain a background risk — but it’s tomorrow’s Fed tone that truly matters. There’s a near-zero chance of a rate change, but Powell’s language will drive direction for risk assets. Expect volume to stay muted until then.

📌 What to Do Now: Reduce size. Let the chop play out. There’s no edge in guessing what the market wants to hear — wait for price to confirm strength post-FOMC. Focus on names showing relative strength and respect your levels. Cash is a position too.

MARKET ANALYSIS
Bears Are Getting Trapped

Tensions in the Middle East remain elevated after President Trump made a dramatic statement Monday night urging people to evacuate Tehran. While some reports suggested he offered a ceasefire proposal between Israel and Iran, Trump later denied it had anything to do with that — adding even more uncertainty around what’s actually unfolding behind the scenes.

Despite the geopolitical noise, markets have taken this in stride. Historical data shows that most military or geopolitical conflicts tend to result in shallow, short-term drawdowns — typically around 4–5% — followed by a quick recovery once tensions de-escalate. So far, the price action suggests investors expect the situation to stabilize without further escalation.

But all of this takes a back seat to tomorrow’s Fed decision.

That’s the real event risk. The market is clearly waiting for Jerome Powell’s tone and forward guidance — not just the rate decision, which is already priced in. With tech extended, breadth mixed, and global tensions in the background, any surprise in tone could spark a big shift in momentum.

📌 Key Takeaway: Geopolitical risk is simmering, but not (yet) market-moving. The Fed is the main event — stay nimble, and be ready to act on price confirmation after the decision.

Nasdaq

The Nasdaq (QQQ) bounced cleanly off its rising 10-day EMA in Monday’s session — a crucial level that held firm during Friday’s panic. This kind of technical resilience confirms that the trend remains intact.

However, we’re now sitting in one of the densest overhead resistance zones on the chart — the same area near all-time highs that’s repeatedly caused chop and failed breakouts since late 2024.

While the index remains objectively strong, this is a tough pocket to clear. We wouldn’t expect high relative volume or a decisive move today with the Fed decision looming tomorrow. Monday’s action was solid — but it was setup behavior, not resolution.

It’s also worth highlighting QQQE — the equal-weight version of the Nasdaq 100. It’s tracking nearly identically to QQQ.

Why does that matter? It tells us this isn’t just a MAGS rally — strength is broad across large-cap tech. When equal-weight confirms cap-weight, it signals legitimate group-wide participation.

🎯 What to Watch: We want to see how QQQ behaves on any push toward that $533–$536 range where previous failures have occurred. A clean breakout on volume after the Fed could trigger significant momentum. Until then, patience is key — but all eyes should remain on this group. It’s where leadership lives.

S&P 400 Midcap

MDY recovered well on Monday after being the hardest hit of the major segments during Friday’s selloff. The bounce brought price back above the rising 200-day EMA but it remains stuck below the 10 and 20-day EMAs — showing that while demand showed up, it hasn’t yet turned into control.

Technically, MDY has now printed several consecutive touchpoints at the $560 level, establishing a clear short-term resistance zone. This has created a mini bull flag — but one that still needs resolution.

The most notable signal? Monday’s relative volume. It spiked significantly, indicating large demand on the bounce — but was immediately met by aggressive supply at $560, rejecting any follow-through. That kind of behavior tells us we’re not out of the chop yet.

⚠️ What to Watch: The Point of Control (POC) currently sits right at price, so we’re at a balance point. A breakout over $560 with volume could quickly trigger momentum back toward $570+. Until then, midcaps remain a relative laggard — and we’re not initiating fresh risk here without confirmation.

Russell 2000

IWM recovered its short-term footing in Monday’s session with a clean bounce off the daily 20-EMA and Point of Control (POC) — both of which were tested during Friday’s sharp selloff. The session printed a doji candle, signaling indecision — which is exactly what we’d expect ahead of a key macro catalyst like the FOMC.

Technically, IWM remains above all major moving averages — the rising 10, 20, 50, and 200-day EMAs — and most importantly, is still holding the $206 breakout level from the 7-month descending bear market trendline. This level continues to act as key structure: demand has repeatedly stepped in here and refused to allow deeper breakdowns.

The bounce lacked volume conviction, but it was orderly and supportive. Until we get confirmation post-Fed, this is a healthy pause — not weakness.

⚠️ What to Watch: If we see a dovish reaction Wednesday, small caps are primed to lead again. Stay nimble — but don’t blindly ignore the clear resilience under the surface.

🧠 Mindset Check: Stop Playing the Second-Order Game

It’s not the Fed decision that moves markets — it’s the emotional interpretation of Powell’s tone, body language, and word choice. With a 99.9% chance of no rate change (per CME FedWatch), the outcome is priced in. But the response? That’s where volatility lives.

Too many traders make the same mistake: trying to front-run second-order effects. They aren’t just predicting the news… they’re predicting how the crowd will feel about the news. That’s where consistency dies.

What actually works? Letting price confirm narrative. You don’t need to guess. You need to be present.

FOMC days typically follow a familiar structure — low-volume chop before the event, then a sharp directional move after. Respect that volatility compression. Wait for confirmation before deploying fresh capital.

📉 Sector Sensitivity Map:

• High ADR / Momentum Names: These often trade 5–8x their ATR above key moving averages into FOMC. That’s not strength — that’s fragility. Trim size or step aside if you’re riding extended names.

• Gold, Miners (GLD, GDX): Already bid due to both Fed anticipation and geopolitical risk. They’re well-positioned for follow-through, but still sensitive to dollar and real rate shifts.

• Financials (XLF, KRE): Watch the yield curve. A steepening response favors regionals; flattening is a red flag.

Bottom Line: It’s okay to do nothing. Tight ranges, thin volume, and emotional chop are common pre-FOMC. If you’re up, scale down. If you’re flat, stay flat. The cleanest edge often comes after the dust settles.

Don’t try to win by being early. Win by being accurate. Protect capital before the event — and act only after volatility defines opportunity. When clarity returns, that’s when we press. Not before.

FOCUSED STOCK
SMCI: Super Micro Computer, Inc.

This is a textbook example of why aligning across timeframes matters.

On the weekly chart, SMCI remains firmly in Stage 1 — basing constructively after its historic run earlier this year. We now have a clear multi-month consolidation supported by the 50-week EMA. This is exactly the kind of setup that precedes a fresh Stage 2 uptrend.

Zooming into the daily chart, SMCI is forming a tight Volatility Contraction Pattern (VCP) — now over a month long — anchored precisely on the rising 200-day EMA. This kind of compression at major moving average confluence (daily 200 + weekly 50) is what fuels explosive moves when they resolve.

Why does this matter?

Because the semiconductors are the current generals of the market. MU, NVDA, AVGO — all are leaders, all showing persistent demand and clean continuation. SMCI isn’t there yet — but if it breaks this base, it will be.

With institutional flows rotating into the group, this name has the sector tailwind and technical structure to re-enter leadership.

⚠️ Key Level: A breakout through $44.50-$45 with volume confirms a new Stage 2 rally. Until then, it’s a high-potential setup, not a trigger.

We already own the leaders. But SMCI is a great example of what a quality second-wave move looks like. If it breaks — it could move fast.

FOCUSED GROUP
GBTC: Bitcoin Trust

Despite Friday’s sharp geopolitical shock — which sent both equities and Bitcoin sharply lower — the crypto complex showed resilience. Most notably, GBTC rebounded precisely off its Point of Control (POC) near $82 and reclaimed both its rising 10-day and 20-day EMAs by the close.

GBTC — our proxy for Bitcoin exposure — is pulling back slightly in premarket today, mirroring BTCUSD’s own digestion phase. That’s expected. But what matters most is the structure: price held where it had to, and volume didn’t expand on the pullback. That suggests this could be a healthy contraction, not a breakdown.

Bitcoin remains one of the strongest major segments across any asset class over the past few months, and GBTC offers a clean way to participate without direct crypto exposure. For swing traders, this is the type of structure we want to see before another leg higher.

📌 What to Watch: Continued price compression above the POC and rising EMAs could lead to a breakout move. If BTCUSD reclaims momentum, GBTC is primed to follow. Run your scans here — top-tier crypto-related equities are still showing strength.

Q&A
Got a trading question? Hit reply and ask!

Q: “How do you manage trades during Fed weeks?”

Great question — and one of the most important habits to develop as a professional trader. The short answer: we get flat, or we get light.

📉 Uncertainty = Volatility. The days leading up to an FOMC announcement are typically marked by declining volume and sloppy tape. Why? Because smart money steps aside. The real risk isn't the decision itself (which is often priced in), but the reaction to Powell’s tone — one misinterpreted phrase and you can see instant whipsaws.

⚠️ The Market’s Mood Can Flip Instantly. Whether it's CPI prints, rising oil prices, or escalating geopolitical tensions like the Israel–Iran conflict, there's already a lot in the mix. Fed day adds fuel to that volatility fire. If you're holding full-size risk into a binary event, you’re gambling — not trading.

🛑 No Naked Risk. If we’re holding positions into the decision, they’re either trimmed to half-size or already risk-free (stop at breakeven, partial profits locked in). This is not the time to initiate fresh exposure — let the market show its hand first. We can always buy after the announcement when the direction becomes clear and volatility settles.

📐 Use Stats, Not Gut Feel. We don’t guess. If a stock is 7–8x its ATR from the 50-EMA, it’s not likely to absorb surprise volatility well. These are the names to trim or avoid. Watch how they react post-FOMC — that’s where the best setups emerge.

Remember: The goal is not to predict the news — it’s to respond professionally to the aftermath. The first move post-FOMC is often noise. The second move is often the trap. The third move — that’s where the real edge lives

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