OVERVIEW
What You Need To Know

• Futures weak: Tesla (-3%) and IBM (-8%) drag indices lower as oil spikes +5% on new Russia sanctions.

• Market tone: Low volume, tight liquidity — still a consolidation phase, not a breakout.

• QQQ: Forming Eve & Eve double top near $606–$608; $598 neckline is key support to watch.

• MDY: Failed at $599 on weak participation; structure remains distributive and vulnerable to $579–$581.

• IWM: 123% relative-volume breakdown below POC and 20EMA; chop and indecision dominate.

• NVDA: Testing 50EMA with heavy volume; binary setup — hold = bounce, fail = momentum flush.

• XLRE: 14-month base breakout with strong relative volume; potential next-cycle leader if rates keep easing.

MARKET ANALYSIS
Protect Your Profits: Defense Is King

• U.S. equity futures remain soft, extending this week’s losses as Tesla (-3%) and IBM (-8%) trade lower post-earnings. The pullback follows Wednesday’s decline across all major indices, confirming that buyers remain defensive despite generally strong Q3 earnings beats.

• Macro catalysts remain net negative as the Trump’s administration imposed new sanctions on Russia’s top crude exporters (Rosneft, Lukoil), sending Brent +5% to $65.65, while rising energy costs threaten margin compression into year-end.

• Meanwhile, the White House’s proposal to expand export controls on China-made software and equity stakes in U.S. quantum computing firms add another layer of uncertainty to tech flows.

• Combined with elevated valuations and tightening liquidity, the tape remains technically fragile. Current price action, especially in mid- and small-caps, reflects distribution as risk appetite continues to fade.

• Bottom line: Despite Fundstrat’s call for a near-term rally, price behavior across indices remains weak, and until relative volume and breadth confirm demand, this remains a market in consolidation, not in breakout mode.

Nasdaq

% over 20 EMA: 75.24% | % over 50 EMA: 64.35% | % over 200 EMA: 61.38%

• QQQ is carving out what appears to be an Eve & Eve double top — a pattern defined by two rounded peaks of similar height separated by a shallow pullback. The first peak formed between Oct 3–10, and the second between Oct 18–22, both stalling at the $606–$608 resistance zone.

• The valley low near $598 (and point of control) now acts as neckline support; a decisive breakdown beneath that level would confirm the pattern, opening potential downside targets toward the $588 range, aligning with the rising 50 day EMA)

• On the flip side, a clean breakout above $610 with volume expansion would invalidate the pattern and reset the trend higher, but given relative volume contraction and flat momentum oscillators, probabilities currently favor a pause-to-pullback phase rather than immediate upside continuation.

• Keep in mind: the Eve & Eve pattern historically signals exhaustion after prolonged rallies and so if confirmed, it would imply near-term correction risk even if the broader uptrend remains intact.

S&P 400 Midcap

% over 20 EMA: 54.61% | % over 50 EMA: 46.38% | % over 200 EMA: 59.10%

• The S&P 400 Midcap ETF (MDY) continues to show signs of distribution, failing to reclaim prior highs after the brief push toward $599 earlier this week.

• This failure reinforces why relative volume is one of the most critical confirms in our framework. Between Friday and Tuesday, MDY’s rallies came on sub-80% of average participation, signaling that the uptick was driven by passive flow and short covering, not true demand.

• Until we see volume expansion alongside breadth improvement, MDY remains structurally weak and vulnerable to further retracement toward its volume-weighted support near $581-$579 and if the QQQ is struggling, expect the MDY to struggle even more.

Russell 2000

% over 20 EMA: 34.89% | % over 50 EMA: 44.96% | % over 200 EMA: 41.86%

• The Russell 2000 (IWM) printed a 123% relative-volume breakdown, slicing below both its Point of Control (POC) and the now-declining 20-day EMA which to us is a clear sign of supply overwhelming demand.

• While we did see demand reappear near the rising 200-hour moving average, which price briefly reclaimed, the broader read is not constructive. This looks less like institutional absorption and more like mechanical short covering.

• The character of this move with heavy volume on breakdown, light volume on rebound, continues to confirm that liquidity remains two-sided and conviction low.

• IWM isn’t showing strength; it’s showing indecision within distribution, and until we see sustained closes back above $247–$248 with real volume, it remains a choppy, low-quality tape.

FOCUSED STOCK
NVDA: The Make or Break Level

ADR%: 2.80% | Off 52-week high: -7.8% | Above 52-week low: +108.2%

• NVDA continues to act as a barometer for broader risk appetite, sitting right at its 50-day EMA (also the 10 week EMA) after rejecting the long-established green demand zone from July.

• Yesterday’s high relative-volume bounce off that moving average was notable, but price closed exactly at the Point of Control (POC) on the volume profile, signaling indecision at equilibrium.

• This is a binary inflection point:

  • A clean breakdown below the 50-EMA could trigger a momentum flush lower toward the $169-170 pocket (20 week EMA) - a short setup worth tracking if volume accelerates on downside follow-through.

  • Conversely, a reclaim of the $184–$185 supply zone on strong volume would confirm the level as support again and re-open a pullback-long opportunity back toward prior highs (and it will tell us its likely the big tech complex won’t enter a deeper correction).

    Remember: you don’t need to trade NVDA directly, it’s the market’s temperature gauge. How it reacts here will likely set the tone for the next leg across the AI and semiconductor complex.

FOCUSED GROUP
XLRE: The Next Cycle Leader?

• Technical Structure: XLRE has cleanly broken out of a 14-month base after rebounding sharply off its rising 200-day EMA - a level that acted as major accumulation support in mid-September.

• Volume Confirmation: The breakout was backed by a clear relative volume surge, confirming real institutional participation rather than passive rebalancing.

• Key Resistance: Price is now consolidating just below the $42.70–$43.00 supply zone at the same area that capped the July rally before reversing. A decisive weekly close above this level would validate a structural breakout and open room toward $44–$45 next.

Rates, Yields, and the Real Estate Reawakening

While falling interest rates can support real-estate equities (through lower discount rates and more attractive yield spreads), the empirical relationship is nuanced and context-dependent.

As yield curves re-steepen and recession odds ease, the negative correlation between REITs and yields could re-strengthen, which supports an overweight stance on real-estate sectors such as XLRE provided technical signals and sector‐specific fundamentals (occupancy, rental growth, leverage) remain favourable