OVERVIEW
Markets at a Tipping Point

🟥 Risk-Off: Clear signs of exhaustion across large-cap tech (QQQ) with rejection at supply and extended weekly conditions. Small and midcaps are holding key levels but remain in digestion.

🕰️ Key Catalyst: Today’s Fed decision and Powell’s tone will dictate short-term direction. Risk appetite is muted ahead of the announcement, and geopolitical noise remains elevated.

🔄 Sector Rotation: Energy (XLE) continues to lead on oil strength. Tech leadership is softening — be cautious chasing extended names. Keep scanning for relative strength in rotation sectors.

MARKET ANALYSIS
Will Powell Spook The Market Even More?

Trump has issued an evacuation notice alongside Israeli efforts in Tehran, and there are now reports circulating of a potential U.S. airstrike on Iran. The market was exactly as choppy as we expected yesterday — and this is normal as we head into a Fed decision where the actual rate hold is fully priced in (CME FedWatch now shows 99.9% chance of no hike or cut).

That means it won’t be the rate decision itself that matters — it will be small shifts in Powell’s tone that could trigger big moves.

Markets initially tried to rally off the lows early Tuesday but quickly faded after more hawkish rhetoric from Trump and escalation fears. Meanwhile, weak U.S. retail sales and industrial production data were basically shrugged off — right now, traders only care about two things:

1️⃣ Middle East escalation
2️⃣ Powell’s tone on inflation + oil shocks

It’s also clear that neither U.S. markets nor global energy markets are pricing in a “worst case” scenario for Israel-Iran yet. The key question the market is wrestling with:

And politically — the U.S. has no appetite for a long drawn-out war here. Any escalation would be both politically and economically costly, something Trump has campaigned against for years.

In short:
📌 There’s a lot of noise- ignore it.
📌 The market is trying to price the path of least resistance.
📌 For us as traders- Powell’s tone tonight is the real event.

Stay patient, manage risk — and don’t get caught trying to “predict” geopolitics on the tape.

Nasdaq

The tech-heavy Nasdaq is showing clear signs of exhaustion. On the weekly chart, we’re seeing rising relative volume paired with back-to-back weekly rejection candles at the key overhead supply zone near all-time highs ($534+). So far, two consecutive weeks of long upper wicks signal selling pressure at these levels (note: this week’s candle is still live).

QQQ is also notably extended — currently ~3.9% above its rising 10-week EMA. Historically, this degree of extension without a reset often leads to some degree of mean reversion or chop.

📌 Big takeaway: With tech leadership this stretched, and signs of momentum fatigue visible, we are cautious here. The next few sessions are pivotal — if buyers can’t punch through this supply, expect further rotation and a deeper pullback.

More on the tech sector in a moment — but for now, this is not a spot to be chasing new long exposure in Nasdaq-heavy names.

S&P 400 Midcap

The weekly chart on MDY is forming a clean volatility contraction pattern — essentially a bullish flag — right along the rising 10-, 20-, and 50-week EMAs. The rejection at the weekly Point of Control (POC) around $563 defines the breakout zone to watch going forward.

So far, this remains textbook digestion of the powerful April move — nothing about the structure suggests a breakdown in the intermediate trend.

The real danger would come if MDY were to fail and lose the cluster of rising moving averages — particularly a failure to hold $545. But based on current action and what we are seeing in sector scans, this still looks like simple consolidation, not topping.

📌 Position accordingly: our bias remains constructive unless proven otherwise.

Russell 2000

When we step back and look at the weekly chart, IWM is still very much in an intermediate-term uptrend — this is by no means a breakdown phase.

All key weekly moving averages are still being respected: the 10, 20, 50, and 200-week EMAs are all intact, with the 50-week EMA being the most critical — it coincides with the recent breakout level near $207.

The weekly Point of Control (POC) also remains well below us, and so far this is simply a period of digestion and chop — not a structural failure.

📈 Relative volume has been steadily rising, and today (and especially this week post-Fed) is where we should start to see more clarity.

Bottom line: The market still respects this breakout — it’s just too early to call a trend break here.

🧠 Mindset Check: Ignore Geopolitics — What Does the Tape Tell You?

When geopolitical tension dominates the headlines (like today’s Israel/Iran situation), it’s tempting to let news flow drive your trade decisions.

Don’t fall for it. That’s how most traders get chopped up.

Here’s why:
👉 The market already knows the headlines.
👉 Price & volume are the final vote on what matters.
👉 “Trying to outthink geopolitics” is not an edge.
👉 Over 80 years of market history shows the vast majority of geopolitical events produce short-lived volatility — not major trend changes.

Your job is to manage risk and react to price confirmation — not guess headlines.

Before you hit buy or sell this week, ask yourself:
✅ Is the stock I’m watching still in a confirmed Stage 2 uptrend?
✅ Is the group/sector flow still positive — or is relative strength rolling over?
✅ Are leaders holding their 10/20EMAs or breaking them?
✅ Is this market showing institutional demand (rising volume on up days)?
✅ Has the character of the trend changed — or is this noise inside a healthy pullback?
✅ Am I basing my action on chart evidence — or headlines and emotion?

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FOCUSED STOCK
ACMR: ACM Research, Inc.

It’s no secret we are massive Stan Weinstein Stage Analysis disciples — and ACMR is one of the cleanest multi-timeframe setups we’re tracking right now (not for today — but for post-Powell opportunity).

Here’s why:

📈 Stage 2 Breakout Potential:

• ACMR is sitting just below a declining resistance trendline that dates back to 2021 — this is a 4-year base.

• As Wyckoff would frame it: we are moving from multi-year accumulation → into potential markup phase.

• These types of bases can produce ridiculously explosive moves, and if traded correctly with trailing stops this can be a multi month/year trade.

🧩 Sector Context:

• Semiconductors remain one of the strongest groups in the market (NVDA, MU, AVGO).

• ACMR isn’t a semiconductor itself, but is highly correlated — it’s in the same supply chain, and benefits from the group's strength.

⚠️ Current Price Action:

• ACMR is coiling just under this major breakout zone — weekly and monthly charts confirm supply is thinning out.

• No “early” entry here — we will wait for clear confirmation after Powell, and will prioritize staged entries when the breakout validates.

📌 Key Lesson:
The best trades often emerge when:
1️⃣ Structure aligns across weekly + daily charts.
2️⃣ The stock is in a leading group.
3️⃣ Volume patterns show accumulation under resistance.

That’s ACMR right now.

FOCUSED SECTOR
XLK: Technology

The technology sector (XLK) — the dominant market leader since the April reversal — is now flashing its first real signs of exhaustion:

📉 We are seeing the formation of a rising bearish wedge on the daily chart. This matters — for several reasons:

• Historically, this pattern breaks to the downside ~82% of the time (source: CentralCharts).

• 55% of rising wedges end an uptrend.

• When they break, the price objective is achieved ~63% of the time.

Volume behavior is a key tell: rising wedges often form on declining relative volume — not something we can clearly see here which makes this unclear (geopolitics adds to this confusing picture).

Rotation Watch:
While tech shows fatigue, energy (XLE) is now the short-term leader — supported by surging oil prices and geopolitical uncertainty.

→ Gold miners (GDX) are also attracting flows, as capital rotates into defensive segments.

Key Takeaway for Traders:

• Momentum shifts always begin in the tape before they show in headlines.

• Exhaustion in tech + relative strength in energy/defensive names = early signals of rotation.

How to act:
✅ De-prioritize extended tech setups — odds of continuation are declining.
✅ Run fresh scans in XLE, GDX, defense — look for new leaders.
✅ Stay nimble — this is exactly when late-cycle tech rallies fail and new leadership emerges.

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

Q: “Should we be looking for shorts today on the Israel-Iran conflict?”

A: In short: no — and especially not ahead of today’s FOMC and Powell’s press conference.

It’s critical to understand that positioning aggressively (either long or short) in front of a binary volatility event is not a professional edge — it’s gambling.

Let’s put some data behind it:
Across 20+ major geopolitical shocks (tracked from Pearl Harbor to today), the stats tell a clear story:

• Median 1-Day Move: –0.4%

• Median Total Drawdown: –2.85%

• Median Days to Bottom: 9.5

• Median Days to Recovery: 19

In other words:
→ Markets tend to digest these events faster than people expect — with shallow, short-lived drawdowns.
→ Initial knee-jerk selling is often reversed once uncertainty fades.

In the majority of cases (~70%), these moves are faded or retraced once the macro uncertainty clears — meaning that trying to aggressively short into headline-driven fear is often low reward vs risk.

In today’s environment, the bigger driver for trend direction is still the Fed — not geopolitics.
Markets are watching to see if Powell signals “higher for longer” or indicates potential easing — and that will dictate institutional flows for the coming weeks, not today’s news headlines.

At Swingly, we take a process-driven approach:

• Wait for the event → observe the market reaction → trade the trend once it confirms.

• We will not be initiating new shorts (or new longs) ahead of the Fed — it’s a lower probability play.

• Big opportunity comes after volatility clears — when the tape tells you where real money is moving.

This is exactly how professional momentum desks operate. And it’s how we avoid the “false starts” that trap most retail traders.

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