MARKET ANALYSIS
Here’s What You Need To Know

• U.S. equity futures are attempting a modest stabilization after a sharp two-day selloff in technology and AI-linked names, though the recovery remains narrow and fragile.

• The S&P 500 and Nasdaq are edging higher in futures trading, while the Dow which carries significantly less tech exposure still continues to outperform, reinforcing the ongoing rotation away from growth and into defensive or value-oriented segments.

• Technology stocks remain the epicenter of volatility, with markets continuing to digest earnings and forward guidance from major AI and infrastructure players.

• Alphabet’s decision to significantly ramp AI-related capital expenditure into 2026 has created a two-speed reaction, lifting AI infrastructure beneficiaries while simultaneously pressuring broader tech sentiment due to concerns around margin compression and return on invested capital.

• Software and application-layer names remain under pressure, reflecting growing concerns that rapid AI tooling advancements are accelerating disruption rather than demand stability.

• Chipmakers are increasingly diverging internally, with infrastructure-aligned names seeing selective optimism while consumer and memory-exposed firms face forecast downgrades amid supply constraints.

• Amazon earnings remain a key near-term catalyst, with markets focused less on headline results and more on guidance, margin durability, and cloud demand trends.

• Labor market data, including weekly jobless claims, remains a secondary but important variable, particularly given how sensitive current equity positioning is to any macro deterioration.

• Crypto markets remain under stress, with Bitcoin trading near the $71,000 level following explicit messaging from U.S. officials that government support should not be assumed, reinforcing crypto’s role as a risk proxy rather than a defensive hedge.

• Precious metals volatility has intensified, with sharp reversals in silver and gold highlighting how speculative excess across multiple asset classes is now unwinding simultaneously.

• Broader sentiment across global equities continues to deteriorate, with weakness spreading beyond U.S. markets into international tech and export-driven sectors (see China stock also selling off e.g. GXC)

Nasdaq

43.56%: over 20 EMA | 51.48%: over 50 EMA | 51.48%: over 200 EMA

• The QQQ continued its expected downside resolution, failing to hold the 200-week moving average at 608 and undercutting sharply to the 600 level before attempting a weak bounce.

• The selloff has now occurred on two consecutive sessions of expanding relative volume, with both sessions printing roughly 155% relative volume, confirming institutional participation on the downside.

• Volatility is expanding meaningfully, with Tuesday’s session posting a 3% intraday range versus a 1.4% ADR, and yesterday following up with a 2.5% range, or roughly 1.75x the average daily range.

• An expansion in both relative volume and ATR simultaneously is a textbook bearish condition, signaling that downside momentum remains unresolved.

• Any intraday strength continues to be sold aggressively, with no evidence of dip buyers being able to sustain upside follow-through.

• The equal-weighted NASDAQ (QQQE) is front-running the weakness, with Tuesday’s selloff printing a 2.6% range (2.6x ADR) on 240% relative volume, followed by another high-range, high-volume session yesterday.

• This confirms that weakness is concentrated in growth and AI-heavy names, rather than being broad-based market stress.

• Positioning remains the core issue, as crowded AI and speculative growth trades continue to unwind, with retail dip-buying adding fuel to downside pressure rather than stabilizing price.

S&P 400 Midcap

61.30%: over 20 EMA | 69.84%: over 50 EMA | 69.84%: over 200 EMA

• Mid-caps continue to demonstrate relative resilience, holding their rising 10-week moving average near 624, where buyers are clearly defending price.

• At the 10-week EMA, volume shows a strong demand skew, with approximately 260,000 shares traded green versus 140,000 red, confirming active accumulation.

• Yesterday’s pullback found support at the 20-day EMA, followed by a strong recovery candle on 125% relative volume, the opposite behavior seen in the QQQ.

• While volatility expanded with a 1.8% intraday range versus a 1.2% ADR, the candle structure reflected demand rather than liquidation.

• Breadth remains materially stronger than in large-cap growth, with a significantly higher percentage of stocks holding above their 20- and 50-day EMAs.

• This does not imply aggressive long exposure is warranted, but it does clearly identify mid-caps and particularly value-oriented names, as the relative strength area of the market.

Russell 2000

53.56%: over 20 EMA | 59.97%: over 50 EMA | 65.20%: over 200 EMA

• Small caps are showing similar behavior to mid-caps, though with slightly more short-term volatility.

• IWM tested and held its rising 10-week moving average near 256, which also aligns closely with the rising 50-day EMA.

• Despite yesterday’s dip, IWM maintains a higher relative strength rating versus the SPX (82) compared to mid-caps (~76) and significantly stronger than the QQQ.

• Breadth is not as strong as mid-caps but remains materially healthier than large-cap growth, reinforcing that weakness is sector- and factor-specific rather than market-wide.

• Buyers continue to defend pullbacks, suggesting that downside risk is currently more controlled than in the NASDAQ.

• As with mid-caps, ETFs remain the preferred vehicle in this environment to avoid single-stock volatility and event risk.

FOCUSED STOCK
VG: Oil & Gas Stocks Are Still Leading

ADR%: 7.50% | Off 52-week high: -55.4% | Above 52-week low: +68.0%

• Venture Global (VG) continues to stand out as a leader within the oil and gas / energy complex, which is currently the strongest sector in the market.

• Natural gas has broken out from a multi-year base, providing strong macro and sector tailwinds for related equities (a 1400 day base on expanding relative volume in the last 2 months; see FCG above).

• VG is holding firmly above its rising 10- and 20-week moving averages, confirming a new Stage 2 uptrend that began at the start of 2026.

• Price has spent the last three weeks building a tight contraction above rising averages, a constructive setup within a new trend.

• Relative strength in the sector continues to improve, reinforcing the defensive rotation theme across the market.

• VG’s high average daily range (~7.5%) allows for meaningful movement while still respecting structure.

• Energy continues to exemplify where leadership resides, with defensive, real-asset-linked equities outperforming speculative growth.