OVERVIEW
Conditions Are Improving

Jobs shock locks in Fed cut: Payrolls +22k vs. +75k expected, unemployment 4.3%. Odds of a September cut now 99%.

Indices breaking out, volume lagging: SPX near ATHs, QQQ clearing August base, MDY/IWM strong breadth — but no RVOL surge. Breakouts remain fragile without sponsorship.

Gap risk = high failure rate: ~45% of 1–2% gaps (SPY/QQQ) fill intraday; 72% of 0.5–1% QQQ gaps fill same day. First 15–30 minutes critical → patience over chasing.

Leadership clear: MAGS driving tech; AVGO leads semis with +13% earnings gap. QTUM testing $95 supply; COHR breaking out from $84 double-bottom.

MARKET ANALYSIS
A Step In The Right Direction

Futures are higher this morning after a dramatic miss in the August jobs report. The US added just 22k jobs vs. 75k expected, with unemployment ticking up to 4.3%. That cements market expectations for a September Fed cut (99% odds priced).

• SPX futures +0.3% → holding near ATHs.

• Nasdaq futures +0.7% → tech carrying leadership again.

Why it matters:

1. Labor market cracks are accelerating. Job revisions now show net losses in June and weaker gains in July. This isn’t a one-off miss, it’s trend.

2. Fed risk is asymmetric. A cut is fully priced; the market reaction hinges on guidance. Under-delivery = sell-the-news. Over-delivery = melt-up risk.

Nasdaq

% over 20 EMA: 44.55% | % over 50 EMA: 43.56% | % over 200 EMA: 60.39%

The QQQ finally pushed through the red-box supply zone we’ve highlighted for weeks, and today’s gap higher places the ETF above almost the entire August 2025 consolidation base.

Structurally, that’s a constructive development: the index spent a full month digesting gains, absorbing supply, and is now resolving higher.

The one caveat is relative volume. The past three up sessions have carried on declining RVOL. On its own, that isn’t outright bearish, particularly since we’re seeing a healthy number of individual stocks behave correctly by forming bases, but it does raise the question of sponsorship.

The index is climbing, but the tape isn’t showing a surge of fresh demand just yet.

Leadership remains clear. This leg is being driven by the MAGS:

• GOOG extended its gap on Chrome news.

• AMZN broke out of its August flag.

• AAPL continues to strengthen off its 20-day EMA.

The relative strength ratios confirm the story:

• MAGS/SPX has accelerated to new highs → megacaps are driving index performance.

• QQQ/SPX, while still recovering, is stabilizing after a month of underperformance.

S&P 400 Midcap

% over 20 EMA: 72.25% | % over 50 EMA: 67.75% | % over 200 EMA: 62.25%

Midcaps have continued to be one of the steadier groups, with MDY pressing back toward the upper end of its August range. Price action is constructive: the ETF has defended its 50-day EMA multiple times and is now coiling just under resistance with higher lows.

That said, the volume profile is a red flag. The latest push higher has not been accompanied by surging relative volume which is a pattern we’ve also flagged in SPY and QQQ.

In the current choppy environment, that absence of sponsorship should be treated as a cautionary signal. Markets can and do drift higher on weak volume, but without real demand stepping in, breakouts are fragile.

Russell 2000

% over 20 EMA: 72.08% | % over 50 EMA: 69.12% | % over 200 EMA: 61.70%

IWM is mirroring the same constructive structure we just highlighted in midcaps. Price action has been clean: higher lows, firm closes, and the index is now pushing toward the upper end of its summer range. Structurally, that’s strong.

But the volume tells a different story. Just like MDY, these rallies haven’t been backed by a material uptick in relative volume. In an environment where failed breakouts are common, that lack of sponsorship is the main caution flag.

Why this matters: gap-up dynamics are one of the most statistically reliable edges in market structure. Historical studies show that for index ETF gaps of 1%–1.99% (like QQQ or SPY), ~45% are fully filled intraday.

The odds improve for smaller gaps, but large gaps above 2% only fill ~30–33% of the time (SharePlanner).

Another study shows that 72% of modest up-gaps (0.5%–0.99%) in QQQ get filled that day, rising to 79% within two days (Quantified Strategies).

The first 15–30 minutes will be critical not just in IWM, but across QQQ and MDY as well. The statistically high failure rate of gaps argues against chasing at the open.

The better play is to wait for confirmation: either volume-backed continuation or a clean fade to re-test demand zones.

FOCUSED STOCK
AVGO: The Semiconductor Leader

ADR%: 3.05% | Off 52-week high: -3.5% | Above 52-week low: +129.5%

Broadcom has reasserted itself as the semiconductor sector leader with today’s +13% earnings gap.

This move comes directly out of a clean, well-defined retracement phase that allowed the stock to consolidate gains and reset key moving averages, leaving the name structurally unextended despite the size of the gap.

Earnings Reaction: The gap pushes AVGO through the descending resistance line that has capped the stock since early August. The move also decisively clears the 20- and 50-day EMAs, bringing trend alignment back in favor of the bulls.

The main caution here is behavioral. In the last few weeks, almost all large earnings gap-ups have been choppy at the open, with high failure rates for traders who chase immediately (especially 5-min opening range high systems).

The first 15–30 minutes will be crucial to determine whether today resolves into a gap-and-go or a gap-fade.

FOCUSED GROUP
QTUM: Growth Heating Up Again

QTUM continues to build a technically sound base, with the 50-day EMA repeatedly defended and price now gapping into the upper edge of the VRVP supply zone (~$95.11).

This zone has capped rallies all summer, making today’s test a critical inflection point. Sustained acceptance above it would confirm a structural breakout, while another rejection could reinforce the pattern of failed highs.

From a composition standpoint, QTUM blends established technology leaders with early-stage quantum names — a mix that makes the ETF uniquely sensitive to flows across both institutional-quality software/hardware and speculative innovation.

Its top holdings (SNPS, AMD, ORCL, NVDA, CDNS) provide stability and liquidity, while RGTI, ARQQ, and COHR inject a little bit of a speculative edge.

COHR: Breakout Taking Place

COHR has quietly repaired its structure after the sharp August breakdown, and today it’s pressing into a key inflection level.

Base Formation: Price has carved a double-bottom at ~$84, with clear demand stepping in at the 200-day EMA. That zone now defines the line in the sand for bulls.

Current Setup: Yesterday’s surge reclaimed the cluster of 10- and 20-day EMAs, and pre-market action is positioning COHR just under the $96.50 breakout zone, aligned with the top of the VRVP supply block.