OVERVIEW
Big Tech Soars While Crypto Struggles

The market had a small pullback yesterday, mainly because everyone is waiting for today’s unemployment data, which will be released just an hour before the market opens. Traders are paying close attention to this important report, with expectations that the U.S. economy added 214,000 jobs in November.

How the job numbers come out could affect the Federal Reserve’s decision on interest rates at their meeting later this month. On Wednesday, Fed Chair Jerome Powell mentioned that the economy is strong enough for the Fed to take a more cautious approach when it comes to cutting rates.

“The labor market is improving, and the risks seem to be lessening,” Powell said. “Growth is stronger than we expected, and inflation is a little higher. But the good news is, we can take our time as we aim for a balanced approach.”

On the crypto side, Bitcoin (BTCUSD) couldn’t maintain its recent surge and dropped back from $104,000 to $98,000. This pullback also affected related stocks like MicroStrategy (MSTR) and Coinbase (COIN), both of which had been rising alongside Bitcoin's jump.

Nasdaq

The Nasdaq had a brief pause in its rally yesterday, with lower trading volume and an intraday pullback to its rising hourly 10-EMA (Exponential Moving Average) after hitting a resistance level at $524. Round numbers like this often act as psychological barriers, which is why we’re likely seeing traders take profits here.

What stands out is that when we look at the QQQ chart, it actually closed below the hourly 10-EMA. The next key support is the rising 20-EMA, which is the last major line of defense before we reach an unfilled gap from December 4. If that gap is broken, we could see a sharper move down to $517, which aligns with the daily 10-EMA.

However, we’re optimistic and don’t expect a deep pullback. This is mainly due to the strong performance of major tech stocks like Tesla, NVIDIA, Amazon, Alphabet, and Apple, which are all in strong uptrends. Their strength should help keep the broader market in a firm bullish stance.

S&P Midcap 400

Midcap stocks tested their daily 10-EMA during yesterday’s session, but with low volume, which suggests that there wasn’t a strong demand coming into the midcaps. Normally, we'd expect to see more aggressive buying at such an important level.

The Point of Control (POC) above at $616 drew in supply, pushing the MDY (MidCap ETF) lower. This increases the likelihood of the $604 level being tested soon, as it lines up with the next major demand zone and the rising 20-EMA.

Russell 2000

The small caps are facing similar challenges. Not only have they dropped to their 10-EMA on the daily chart, but they’ve also broken lower and are now testing the critical demand zone at $238. It’s important to see the IWM (Russell 2000 ETF) hold this level, with buyers stepping in to defend the $238-$236 range. If this support fails, we could see a deeper pullback, likely down to the rising 50-EMA. However, we’re not at that point yet, so we remain optimistic for now.

DAILY FOCUS
The Tape Is Never Wrong, Opinions Often Are

Over the past week, U.S. equity funds experienced significant net inflows, totaling $8.85 billion. This clearly highlights where the market strength is concentrated right now. While small-cap and mid-cap stocks have been beaten down and underperforming, the real momentum is found in mega-cap and large-cap growth stocks, which are leading the charge.

As swing traders, our job is to follow the trend and ride it as long as it lasts. However, the reality is that we need to be quick in this environment. As we've been emphasizing in our recent daily reports, the best entry points tend to disappear fast. We're now at a point where the breakouts in tech and mega-cap names are largely behind us. Stocks like Tesla, Apple, Nvidia, Palantir, and Amazon are all in strong uptrends, but unfortunately, the ideal entry points have already passed.

If you missed these entries, it's likely best to stay on the sidelines and wait for the next opportunity. While it can be tempting to chase these stocks higher, doing so often leads to less favorable risk/reward setups. Instead, staying patient and waiting for fresh setups or pullbacks offers a better chance to enter with a more favorable position.

WATCHLIST
Nothing Major To Declare

UPST: Upstart Holdings, Inc.

• UPST is the only stock we’re currently watching in the technology sector that appears to be setting up for a potential breakout.

• We’ve seen UPST find support at its 20-EMA, with the last two sessions showing consolidation and a reduction in volatility just below the declining resistance level at $75.

• Given the current market conditions, we are not looking to open any new positions at this time. We are already fully invested, with over 100% exposure in leading growth stocks across sectors like technology, semiconductors, and retail—each performing well.