OVERVIEW
Market Should Get Some Clarity Today

Today is a major inflection point for the markets, with all eyes on the Federal Reserve’s rate decision. While the overwhelming expectation is that rates will stay put, the real story lies in Powell’s post-meeting commentary—specifically, how he frames the economic outlook and any signals he gives about future policy direction.

Markets have attempted to find their footing in recent sessions, but technical damage remains, and breadth still looks weak. Investors aren’t just listening for what the Fed does; they’re watching how the market responds. If Powell can’t instill confidence that growth remains steady and inflation is still trending toward 2%, concerns about stagflation or even an outright recession could weigh heavily.

Of particular interest is how the Fed views the broader policy landscape, including Trump’s trade and immigration stance and the impact of aggressive government downsizing efforts, some of which are being championed by high-profile figures like Elon Musk’s DOGE group.

You have to remember that the equities market values clarity above all else. The focus isn’t just on what the Fed says today but on whether the big players can confidently predict where capital allocation makes the most sense. Only when that happens are we likely to see the market begin to trend higher—and today could be the day we finally get some clarity.

Nasdaq

From a technical standpoint, the QQQ—which tracks large and mega-cap technology names—remains in a steep downtrend. However, over the past week, we’ve seen a low-volume bounce, something we’ve highlighted in recent reports.

The QQQ is currently facing strong resistance at its descending daily 10-EMA, and yesterday’s session reinforced that rejection as price struggled to hold its point of control (POC). One encouraging sign is that selling volume has declined since the start of this sell-off, suggesting that participation on the breakdowns is waning. This could indicate exhaustion from sellers, opening the door for a potential reversal—if the QQQ can hold its current levels and form a legitimate bottoming pattern.

That said, context is key. The lighter volume is expected ahead of today’s rate decision, as most traders are sitting on the sidelines rather than trying to predict how the market will react. With volatility contracting and volume drying up, we’re likely on the verge of a decisive move in the coming sessions.

S&P Midcap 400

The midcaps have also seen notably low relative volume over the past few sessions, with the MDY bouncing on a low-volume relief day into its daily 10-EMA, which is barely holding. There’s a fair amount of upside potential here if we see some consolidation, as that would help slow down selling aggression and create a more constructive setup.

However, the volume profile on the relief day suggests this was not a true surge of buying interest but rather a technical bounce—likely driven by profit-taking from sellers rather than genuine accumulation. The visible range volume profile (VRVP) highlights the significance of the $522-$535 zone, where a dense volume pocket has acted as a demand area. This increases the likelihood of continued consolidation in this range before any decisive move takes place.

Russell 2000

The small caps have seen such low relative volume in the last few sessions that a decisive move—either higher or lower—seems increasingly likely. The lower volume dries up, especially during consolidation, the higher the probability of an explosive breakout in either direction. It’s the same principle we apply to individual breakout setups—price contraction + volume contraction = potential volatility expansion.

It has undeniably been a brutal period for small caps, which have been hit hard and remain deeply beaten down.

DAILY FOCUS
The Reaction Today Will Be Very Telling

We genuinely wish we could sit here and write a much more positive report—one filled with exciting trade ideas and setups we’re looking at. But to do that right now would be incredibly disingenuous. The reality is, this is not an environment filled with high-probability trades, and forcing action where it doesn’t exist is how traders bleed their accounts.

Swing trading, whether you like it or not, is a system that often requires sitting on your hands—waiting, watching, and resisting the urge to chase noise. Unlike day trading, which is fast-paced and constant, swing trading is about timing, not just activity. And while that might feel frustrating in the short term, it’s both a blessing and a curse.

If you ever feel impatient or frustrated, remind yourself: the best breakouts and the biggest opportunities for massive profit always come after pullbacks and corrections. This is why discipline matters—it’s not about being in the market all the time; it’s about being in the market at the right time.

The good news is that Powell’s comments today are very likely to give us some clarity—not necessarily on what the Fed will do next (which remains uncertain), but on how the market chooses to react. And that reaction is what really matters.

It’s not unrealistic to think we could finally see the market breathe some relief, especially if Powell delivers a message that reassures big players. If that happens, we may finally see institutions start driving money back into stocks rather than sitting on the sidelines.

At the moment, we’re still seeing money flowing out—or at the very least, not flowing back in. A clear example? Gold. Notice how it continues to push higher and remains green on most days that the SPY is red. That’s a clear signal that capital is still favoring safety plays over risk. But if today’s reaction shifts that dynamic, we’ll be ready to adapt.

WATCHLIST
Focus On These On A Strong Reaction

FPH: Five Point Holdings, LLC

• FPH has a very strong contraction forming on its daily chart, with price now testing the rising 50-day EMA, which so far seems to be acting as support. This is exactly the type of technical pattern you want to be scanning the market for—tight, controlled price action near key moving averages.

• One notable aspect here is volume—it has been very low since the stock’s earnings event. Typically, a volume contraction after earnings is a good sign, signaling that sellers have backed off. However, in this case, the volume profile isn’t the ideal linear drying-up pattern we prefer to see, making it a bit more peculiar.

MSTR: MicroStrategy Incorporated

• MSTR remains firmly on our radar as the so-called Bitcoin king has entered a well-defined multi-month contraction with a series of higher lows. The stock is now trading just below its declining 50-day EMA, which aligns with a key descending resistance level drawn from late 2024.

• Naturally, MSTR’s movements will be heavily correlated with BTCUSD, but from a technical perspective, this contraction is very clean. We’re paying close attention to how it behaves at these key levels, as a decisive move could open up an actionable opportunity.