OVERVIEW
What You Need To Know

• Inflation cools: September CPI came in below expectations, lifting rate-cut hopes and sparking a premarket rally, led by tech.

• Market tone improving: Yields slipped, the dollar softened, and equities are gaining momentum as traders price in easier policy ahead.

• Nasdaq (QQQ & QQQE): Both invalidated prior double-top patterns and held their 10-day MAs — QQQE is even outperforming, showing improving breadth.

• Midcaps (MDY): Strong rebound off 10/20-day EMA cluster and breakout above $597 POC — impressive action but gap-up favors pullback entries, not chases.

• Small caps (IWM): Bounced sharply from $243 POC but on light volume; price flipped short-term bullish, yet open gaps may trap eager buyers.

• Focused Stock (APP): Perfect pullback to 10-week and 50-day EMA, now breaking above $600 POC; remains a top market leader, but avoid chasing the early gap.

• Focused Group (XLK & RSPT): Tech complex rebounding strongly post-CPI, invalidating head-and-shoulders setups — synchronized leadership between mega-cap and equal-weight tech confirms broad institutional support.

MARKET ANALYSIS
The Bulls Are Making A Major Comeback

• Inflation cools slightly: The September CPI report came in softer than expected, with headline inflation rising 0.3% MoM (vs 0.4% forecast) and 3% YoY (vs 3.1% expected). Core CPI, which strips out food and energy, also eased to 0.2% MoM and 3% YoY, both below forecasts. The data suggests inflation pressures are continuing to moderate, reinforcing expectations for further Fed rate cuts this year.

• Market reaction: Equities ticked higher following the release as traders priced in a greater likelihood of easing at the Fed’s upcoming meeting. Treasury yields slipped, while the dollar softened modestly on the dovish signal.

• Earnings moves: Tesla missed earnings expectations and gapped lower at the open, but buyers quickly stepped in, pushing shares back toward breakeven — a sign of resilience in high-beta tech. Intel rallied on strong Q3 results, and Procter & Gamble gained after topping revenue and profit estimates.

• Tone: With inflation cooling, rate-cut hopes rising, and earnings generally beating expectations, market sentiment is cautiously improving heading into the final week of October.

Nasdaq

% over 20 EMA: 65.34% | % over 50 EMA: 60.39% | % over 200 EMA: 63.36%

• Both QQQ (cap-weighted) and QQQE (equal-weighted) moved in perfect tandem yesterday, with QQQE actually outperforming in the last few session which is a very healthy sign of improving breadth.

• The “Eve & Eve” double-top pattern that had formed earlier in October now appears invalidated, as both ETFs held firmly above their rising 10-day MAs and rebounded decisively.

• Volume remains moderate but supportive, confirming that buyers defended key trend levels despite earlier weakness- today will be the test to see if this is a bull trap on this rally, or not.

• We must emphasise that all of the big tech complex (with NVDA being the exception) are posting earnings next week which doesn’t mean long exposure is a bad idea here, but it’s important to keep in mind they will dictate direction.

S&P 400 Midcap

% over 20 EMA: 54.36% | % over 50 EMA: 45.88% | % over 200 EMA: 57.85%

• MDY had an impressive session yesterday, bouncing cleanly off its 10- and 20-day EMA cluster and reclaiming its Point of Control (~$597).

• In premarket, it’s now gapping above the densest part of its distribution zone that’s been forming since early September, signaling a strong shift in demand.

• That said, we’re really urging discipline over euphoria as today’s gap-up favors pullback traders who entered stocks on weakness (more on this in the focused stock section), not breakout chasers.

• Let the first 15–30 minutes establish direction before acting; volume confirmation is the key.

Russell 2000

% over 20 EMA: 53.37% | % over 50 EMA: 48.46% | % over 200 EMA: 58.78%

• IWM is gapping up this morning after an impressive reversal off its Point of Control (~$243), matching the strength seen across the broader market.

• Yesterday’s bounce came on low relative volume, suggesting participation was thin despite the clean reclaim of short-term EMAs.

• Structurally, both price and trend have flipped short-term bullish, confirming that buyers are defending key demand zones.

• However, the risk of a bull trap is high at the open and so chasing the gap-up without confirmation can easily lead to whipsaws in this environment.

• As with MDY, patience is key; let the opening range settle before considering any exposure.

FOCUSED STOCK
APP: A Perfect Pullback

ADR%: 6.16% | Off 52-week high: -20.9% | Above 52-week low: 298.4%

• APP just executed a very impressive pullback by retracing cleanly to its 10-week EMA and 50-day EMA, where buyers stepped in aggressively with a wide expansion candle yesterday.

• This is a great example of how to buy on weakness as you always want to take the chance going long on a major intermediary trend support test (this case it was the 10 week EMA).

• In premarket, euphoria is pushing it above its Point of Control (~$600), signaling a potential breakout through a major supply zone.

• While this setup confirms trend integrity and obvious demand, avoid chasing the gap-up as this early strength can often fade as profit-takers step in during the first 15–30 minutes of trade.

• On the weekly chart, APP remains one of the strongest stocks in the entire market, up nearly 300% over the past 52 weeks, making it a clear leadership name in the current cycle.

FOCUSED GROUP
XLK: The Tech Trade Is back

• Both the cap-weighted XLK and equal-weighted RSPT bounced sharply in tandem, showing synchronized strength across the entire technology complex.

• This morning’s inflation data triggered a strong premarket rally, with tech leading the charge and this is all confirming that growth sectors remain the main beneficiary of easing rate pressure sentiment.

• XLK found strong demand right at its Point of Control (~$285) and rebounded cleanly, while RSPT followed through decisively, both reclaiming short-term EMAs.

• The head-and-shoulders formation on both charts has now been invalidated, signaling renewed structural strength rather than breakdown risk.

• With both mega-cap and equal-weighted tech advancing together, this rebound reflects broad institutional support which is a very strong shift that should solidify leadership assuming earnings from the big tech complex next week confirms the trend.