OVERVIEW
Gold Hits $3,500 as Trump’s Fed Criticism Fuels Market Jitters 🪙

Gold surged to an all-time high of $3,500 per ounce on Tuesday, as investor anxiety over Federal Reserve independence intensified following another public attack by President Donald Trump on Fed Chair Jay Powell. Though the precious metal later gave up some gains, it remains one of the top-performing assets this year — up roughly 30% — as global markets brace for more political and economic turbulence.

Trump’s latest outburst on social media called Powell “Mr Too Late” and demanded immediate rate cuts, just days after Powell warned that Trump’s sweeping tariffs could trigger slower growth and higher inflation. Analysts say the pressure on the Fed is undermining confidence in U.S. financial institutions and driving a flight to safe-haven assets like gold, the Japanese yen, and German bonds.

Market volatility has deepened amid simultaneous declines in U.S. stocks, bonds, and the dollar. While the S&P 500 and Nasdaq rebounded on Tuesday, investors remain cautious, especially as Trump’s rhetoric raises fears of direct interference with the central bank — a move that could destabilize the $29 trillion Treasury market.

Gold-backed ETFs saw $19 billion in inflows in Q1, and demand remains strong globally, particularly in Asia and Europe. With Powell’s term running through May 2026, speculation over potential political shake-ups at the Fed is mounting — and so is the market’s search for stability. The Fed is expected to keep rates unchanged in May, but traders are still pricing in multiple cuts later this year.

We are, however, now seeing Gold pull back today as the commodity becomes technically extended above its moving averages, signaling a potential pause or correction as money begins to rotate away from the safe haven. The rising 10-EMA on the daily chart, currently around $301, is likely to be tested, representing a -3.14% decline from the current close. This highlights the importance of entering long positions during volatility contractions rather than chasing price action upward.

MARKET
Growth Stocks Are Starting To Rally…

The market finds itself at a crossroads today, as we see a delicate shift in both geopolitical tensions and broader risk sentiment. President Trump signaled a less confrontational stance in trade talks with China, noting that the current 145% tariff on Chinese imports is "very high" and, "It won’t be that high. It’ll come down substantially." This marks a notable change in tone from the combative rhetoric we've seen in recent weeks. On the other side, China expressed a willingness to resume trade talks, albeit with the clear caveat that negotiations won't occur under continued threats. The Foreign Ministry spokesperson, Guo Jiakun, emphasized, “We don’t want a trade war, but we’re not afraid of one.”

Both sides appear to be softening their positions, with Trump stating he’s no longer playing "hardball" and Treasury Secretary Scott Bessent predicting a de-escalation of tensions. This shift is encouraging, but the market remains on edge, digesting the potential for an easing of trade conflicts after weeks of heightened tariffs and sharp rhetoric that rattled global markets.

Amidst this backdrop, one asset has stood as a refuge: gold. There is a substantial amount of capital currently sitting in gold, with much of it unproductive, waiting for a reason to re-enter the market. While the commodity has seen a dramatic surge, there's now a pullback underway as volatility settles and the money that sought safety begins to rotate back into equities. Briefly, as discussed above, gold has become technically extended, pulling back from its recent all-time highs with the highest relative volume seen in two years. The market appears to be absorbing these gains, which could indicate a temporary pause before any next move.

We're witnessing an interesting mix of opportunities, with signs of potential strength in equities that could signal a broader risk-on sentiment. However, this doesn't mean jumping in blindly—it's about managing risk effectively, identifying high-conviction setups, and maintaining discipline in the face of evolving market dynamics.

Let’s dive into today's analysis and key developments…

Nasdaq

The Nasdaq is currently teetering on the edge of breaking out of the declining trend line that has been in place since the breakdown accelerated in late February. As of pre-market, we're holding above this critical level, coinciding with the declining 20-EMA, which has acted as resistance throughout this entire period. The key focus for today is simple: a potential shift in character. We need to see this 20-EMA flip from resistance to support on an intraday test. This would signal a potential change in the market's behavior, a crucial confirmation that the bearish trend could be weakening.

Another important point of interest is the Visible Range Volume Profile (VRVP), which highlights a high-demand volume level that we successfully held above in yesterday's session on notably high relative volume. This sets up an intriguing scenario as we approach the potential +7% move into the overhead supply zone, defined by the Point of Control (POC). This could be a critical juncture where the market either reaffirms its strength or faces a rejection at these levels.

What’s particularly interesting today is the backdrop of market dynamics: we’re seeing a number of stocks breaking higher in pre-market, even as money rotates out of gold. Gold, a classic safe-haven and non-productive asset used to hedge against chaos, is losing its appeal. As money flows out of gold, it’s indicative of a shift in market sentiment—potentially signaling that the fear-driven rally is subsiding and that there’s increasing optimism for growth assets.

S&P Midcap 400

The midcaps are showing unexpected strength right now, which is surprising for us to admit, but the technical setup is hard to ignore. We’re currently seeing a Volatility Contraction Pattern (VCP) forming below the declining 10 and 20-EMAs, a key technical feature that indicates a potential build-up of momentum. As seen on the Visible Range Volume Profile (VRVP), if this zone is breached, we have a low-volume pocket leading up to the Point of Control (POC) around $526, providing a clear potential path for the next move.

Pre-market action is already showing the MDY (mid-cap ETF) pushing higher, but as we've all experienced, the key here is preventing a fade at the open. To confirm strength, we need to see the opening range high hold. This would solidify the notion that we are dealing with a legitimate breakout, rather than just another false start.

Russell 2000

The small caps are also forming a similar volatility contraction pattern, and we’re seeing the IWM (Russell 2000 ETF) gap up into its own overhead supply. This zone is notably denser compared to the overhead supply levels on MDY or QQQ, which suggests more significant resistance ahead.

Tech Leadership: Why It Matters for Follow-Through

Now, this brings us to an important point — if we are going to see follow-through on these moves, tech, and especially large-cap tech, is most likely going to lead not small caps. Why? Large-cap tech stocks have a disproportionate influence on major indices like the S&P 500 and the Nasdaq. These stocks tend to have the liquidity and stability needed to break through significant resistance zones and drive momentum across the broader market.

Moreover, tech stocks, especially the retail favorites, are the most robust and tend to be the go-to for pension funds, institutional investors, and large-money managers. These names are often seen as safer bets due to their size, stability, and established track record. After being beaten down for so long, they’re likely the first place capital will rotate to when the market shows signs of strength.

DAILY FOCUS
How To Ride A Trend

The market finds itself at a crucial juncture today. After a prolonged Stage 4 markdown phase, where we experienced significant distribution and price discovery, we are now in the process of determining whether we’ve fully transitioned out of this phase. While no one can predict with certainty when this will happen, our role as traders is clear: stay proactive, scan for the strongest setups, and enter positions when the time is right.

The Stage 4 phase is characterized by a market under pressure, where supply outstrips demand, and prices decline. During this period, we saw widespread weakness and increased volatility. However, just because we were in a Stage 4 markdown doesn’t mean we should sit on the sidelines waiting for a reversal to appear. Instead, we need to be continuously scanning for stocks that are holding strong relative to the broader market. Specifically, we want to focus on stocks forming new Stage 1 bases or those already showing strength despite the market's challenges.

A Stage 1 base is critical for identifying stocks that are setting up for potential Stage 2 breakouts. These stocks are in the process of consolidating, typically after a decline, and are primed to move higher. When we see stocks holding a tight base, especially in a volatile environment, that’s our cue to pay attention—because these setups could lead to the next phase of growth.

This isn’t about rushing into trades or chasing momentum blindly; it’s about patience, discipline, and knowing when to act. For us as swing traders, the entry point is everything. We focus on stocks that are holding up well during the downturn, but we won’t enter until we see clear signs of breakout into Stage 2. We’re looking for volume confirmation, price action, and relative strength.

WATCHLIST
Focus On These On A Strong Reaction

PLTR: Palantir Technologies Inc.

• PLTR consistently remains at the top of our watchlist, showing up in nearly every market leader scan we run. It’s a stock that automatically gets our attention whenever it breaks significant technical levels. Most recently, Palantir has demonstrated remarkable strength, particularly given the broader market’s struggles. As always, we’ve prioritized long exposure to this stock whenever we see it in clear bullish setups.

• Recent positive news, especially regarding Palantir’s partnership with NATO, has added a catalyst for further growth. Technically, the stock has formed a well-defined double bottom pattern, which has proven to be incredibly resilient. This setup has remained intact despite broader market weakness, showcasing Palantir’s inherent strength.

• At the moment, PLTR is testing the critical $100 level. This is not just a key technical zone, as it marks the formation of a base since February, but also a significant psychological barrier. If this level is broken, it will not only confirm continued strength in the stock but also signal a potential for even more upside.

ROOT: Root, Inc.

• ROOT is another stock that’s been on our radar as a relative strength leader in the financial sector. Yesterday, it had a strong session, but the price action struggled to clear overhead supply, which kept us from entering a long position. However, today we’re seeing a major shift with high relative volume driving the stock higher. ROOT is now gapping up above $140, breaking decisively above the $135 level we’ve been watching closely.

• What excites us about ROOT is the structure of its price action. The stock has been forming a series of higher lows, signaling a constructive uptrend. Additionally, we’re seeing volume contraction during the consolidation phase, which often precedes a breakout. This multi-month base being broken to the upside is a bullish sign and presents a compelling opportunity, especially as ROOT shows continued relative strength in a sector that’s performing well overall.