MARKET ANALYSIS
Here’s What You Need To Know

• Inflation surprised to the downside, which immediately eased pressure on rates and gave the market room to breathe after several heavy sessions of selling.

• Headline CPI printed at 2.7% and core at 2.6%, both well below expectations, and that was enough to flip sentiment in futures, particularly in Nasdaq.

• This was not a clean inflation report, with no month-on-month data and missing October inputs due to the government shutdown, so it should be treated as directional rather than definitive.

• Even so, the market is currently far more sensitive to signs of economic slowing than to inflation re-accelerating, which explains the positive reaction.

• Recent Fed commentary has already leaned toward eventual rate cuts, and today’s CPI print simply reinforced that narrative rather than changing it.

• The rally is occurring after multiple days of forced de-risking, especially across AI and large-cap tech, where positioning had become extremely crowded.

• Oracle’s data-center issues earlier in the week exposed capex concerns across the AI complex, and the market has been in digestion mode since.

• Micron’s earnings helped stabilize sentiment in semiconductors, but it does not undo the broader unwind that has been taking place.

• From a trading perspective, this looks like a relief bounce enabled by macro, not a clean reset of the market structure.

• Until price confirms with volume expanding to the upside with sustained demand, strength should be treated as intraday push rather than something to aggressively press.

Nasdaq

45.54%: over 20 EMA | 52.47%: over 50 EMA | 55.44%: over 200 EMA

• Yesterday’s sell-off was not a random pullback; it came on 120% of the 20-day average volume, confirming real distribution rather than a lack of buyers.

• The downside candle expanded to roughly 1.46× the average daily range, which is a clear signal that sellers were in control and willing to press size.

• Price failed directly into the declining 10- and 20-day moving averages near 614–615, reinforcing that short-term trend resistance is now actively being sold.

• More importantly, QQQ is now firmly below the declining 10-week moving average around 607, which historically is a line that separates corrective bounces from structurally weak tape.

• This CPI-driven bounce attempt is happening from underneath trend, which means it should be treated as a counter-trend move unless price can reclaim and hold above that weekly level.

• The market has shown a repeated pattern over recent weeks where gap-ups are sold almost immediately, and there is no evidence yet that this behavior has changed.

• While there is visible demand and a point of control around 600, any bounce from this area is more likely to be reactive stabilization rather than the start of a durable bottom.

• From a trading standpoint, trying to play a clean bottom here requires assuming that sellers suddenly step aside, which so far has been a low-probability bet.

S&P 400 Midcap

62.00%: over 20 EMA | 62.00%: over 50 EMA | 61.00%: over 200 EMA

• MDY continues to show clear relative strength versus Nasdaq, which is consistent with the rotation theme we’ve been discussing.

• The pullback from the 623 highs has occurred on declining relative volume, suggesting a lack of aggressive selling rather than forced liquidation.

• Price has pulled back into the 605 supply-to-demand zone, and so far that area is behaving as support, which is constructive.

• Unlike QQQ, MDY remains comfortably above its rising 10-week moving average, which is still over 1% lower and provides structural backing to the trend.

• That said, this is still a gap-up environment, and chasing strength at the open carries the same risk profile as Nasdaq, even if the structure is healthier.

• If a tradable bounce is going to develop, it is far more likely to originate in mid-caps, but patience is still required for confirmation.

Russell 2000

64.77%: over 20 EMA | 61.77%: over 50 EMA | 64.15%: over 200 EMA

• IWM is currently below both its 10- and 20-day moving averages, which immediately puts it in a weaker tactical position than MDY.

• The 253 level has clearly been reaffirmed as supply, and price is now flirting with turning 250 into supply as well if today fails to hold.

• The visible range volume profile shows heavy trapped long exposure above 251, stretching up toward the 258–260 highs.

• This creates a mechanical problem: every push into those levels invites defensive selling from trapped buyers, adding overhead pressure.

• Structurally, IWM is drifting into a potential head-and-shoulders formation, with the left shoulder in early December, the head near 257.5, and a developing right shoulder over the last two sessions.

• Until demand clearly steps in and reclaims moving averages, IWM sits in no-man’s land, where risk outweighs reward.

FOCUSED STOCK
GFI: Precious Metals Are Still The Best

ADR%: 4.55% | Off 52-week high: -5.4% | Above 52-week low: +251.8%

• Gold Fields sits firmly within the strongest segment of the market right now, with the precious metals complex continuing to show persistent relative strength versus U.S. equities throughout 2025. This is not a short-term theme — it’s an established intermediary trend that has been intact since 2024 and has survived multiple equity drawdowns without structural damage.

• From a technical standpoint, GFI is doing exactly what leading stocks tend to do in strong trends: repeated breakout attempts fail, price gets rejected at range highs, and the stock continues to reward disciplined pullbacks into the rising EMA complex instead. That behavior alone tells you institutions are accumulating weakness, not chasing strength.

• Price is currently extended near the upper end of its range, which makes fresh breakout buying unattractive here. The higher-probability trade remains patience — waiting for a controlled pullback into the 10–20 day EMA zone, where prior demand has consistently stepped in with confirmation.

• A deeper reset into the 10-week moving average around 41.36 would offer an even more asymmetric opportunity, but that would require roughly a 7% downside move. Given how well gold, silver, and miners are holding bid, that scenario feels less likely unless broader risk markets materially deteriorate.

FOCUSED GROUP
KRE: Financials & Banking Holding Strong

• Regional banks have quietly shifted character over the past two months, carving out a clean double-bottom structure with the first low on October 16 and the second on November 18. Since then, the group has rallied roughly 17%, confirming a meaningful change in trend rather than a dead-cat bounce.

• The current price action is constructive rather than concerning. KRE is consolidating near highs, not breaking down, and the supply zone up toward ~58.50 explains the tight, sideways action we’re seeing this week. This is digestion, not distribution.

• That said, this is not the kind of tape where chasing ETF highs makes sense. The edge is no longer in blindly buying KRE itself, but in identifying which stocks inside the regional banking and broader financials complex are acting like leaders.

• We’ve already seen this rotation play out clearly in insurance, and the same framework applies here: sectors move first, leaders emerge second, and only then do you get sustained trends worth pressing. The ETF tells you where to look — the individual names tell you what to trade.