MARKET ANALYSIS
What’s Happening Today

• Markets are opening with the same core tension that has defined the week: political headlines are attempting to calm conditions, but price action across oil and equities continues to reflect a market that does not yet believe supply risk has been removed.

• President Donald Trump extended the deadline for potential strikes on Iranian energy infrastructure to April 6, which temporarily reduces immediate escalation risk, but the reaction across commodities tells you investors are still pricing disruption rather than resolution.

• Brent Crude is back above $110, while West Texas Intermediate is approaching $97, and that is important because oil is rising even as military action is delayed — a sign that traders are now focused less on headline diplomacy and more on the practical risk of prolonged supply dislocation.

• The real issue remains the Strait of Hormuz. Even with negotiations continuing, vessel movement remains impaired, shipping disruptions are ongoing, and reports of ships being turned back reinforce that the market still sees the route as unstable.

• Once oil continues advancing despite a diplomatic extension, it usually means participants are beginning to price a deeper second-order effect: tighter shipping conditions, higher insurance costs, delayed cargo movement, and broader pressure on global energy-sensitive supply chains.

• Equity markets are reflecting that shift in a much more serious way now. The Nasdaq Composite has officially entered correction territory, the S&P 500 remains materially below highs, and yesterday’s decline showed that relief rallies are becoming increasingly fragile.

• What stands out most is that dip buying is no longer behaving the way it did earlier in the selloff. Previous downside sessions repeatedly attracted immediate short-term demand, whereas now rebounds are failing faster and with less conviction.

• Sentiment, however, is becoming increasingly stretched beneath the surface. AAII bearish sentiment remains near 50%, which is still well above historical norms, while bullish readings remain suppressed for a sixth consecutive week.

• That matters because markets often become vulnerable to sharp reflex rebounds once pessimism becomes crowded, even if the broader trend remains under pressure.

• For now, though, oil remains the dominant macro variable. Until energy pricing stabilizes, equities are unlikely to fully regain footing because higher crude directly feeds into inflation expectations, margin pressure, and weaker confidence across growth-sensitive sectors.

Nasdaq

13.86%: over 20 EMA | 15.84%: over 50 EMA | 43.56%: over 200 EMA

• The Invesco QQQ Trust continues to deteriorate exactly as expected following Wednesday’s short trigger at $591.20, where price rejected the declining 10-day EMA and failed at what had previously been a major demand zone held between early February and mid-March.

• That level mattered because it was not just short-term moving average resistance — it was also prior structural support, and once that failed, the character change was clear: demand had flipped into supply.

• Thursday confirmed that shift with decisive downside expansion on rising relative volume, followed again yesterday by 120% relative volume on the gap-down continuation, reinforcing that sellers remain fully in control.

• The bigger technical failure is the loss of the rising 50-week EMA, which had acted as a major institutional support reference throughout the entire stage 2 advance since April 2025.

• Once that level gave way, the probability of accelerated markdown increased materially, because there is currently no evidence of meaningful support being defended beneath current price.

• Importantly, downside extension is still not extreme. QQQ is only around -3 ATR multiples below the 50-day EMA, which historically still leaves room before true short-term capitulation begins. In practical terms, the move is weak, but not yet stretched.

• That is why our broader downside target remains $546, which implies another 4.7% lower and aligns with the next meaningful monthly support structure after the break of the 10-month moving average.

• The deterioration is also broadening beneath the surface. Large-cap growth names such as Alphabet Inc. are continuing lower, confirming that this is not isolated ETF weakness but broader growth liquidation.

S&P 400 Midcap

30.75%: over 20 EMA | 24.50%: over 50 EMA | 45.00%: over 200 EMA

• SPDR S&P MidCap 400 ETF Trust is showing a similar pattern, but with weaker internal sponsorship.

• The short entry discussed over the past two sessions remains valid: yesterday’s push into the declining 20-day EMA failed again, confirming trapped supply overhead.

• Visible range volume profile shows roughly 400,000 shares traded green versus 240,000 red near the failed recovery zone, meaning a large portion of recent buyers are now immediately underwater and likely to add supply on any bounce.

• This is precisely why the rejection has been so steep — rallies are not attracting fresh demand; they are simply allowing trapped buyers to exit.

• Short term, the first downside objective remains the point of control near 0.7% lower, but structurally we still expect a deeper move toward $597, which aligns with the rising 15-week EMA and likely represents the first realistic location for a double-bottom attempt.

• As with QQQ, MDY is not yet statistically stretched, with downside extension still modest relative to historical ATR exhaustion levels.

Russell 2000

38.85%: over 20 EMA | 28.72%: over 50 EMA | 47.72%: over 200 EMA

• iShares Russell 2000 ETF also failed exactly at the 20-day EMA yesterday, which was the clean short trigger.

• The rejection came on an inverse hammer structure, confirming that sellers regained control immediately after the attempted reclaim.

• Volume profile remains slightly more balanced than QQQ or MDY, but still shows an imbalance: roughly 7 million shares traded green versus 5.6 million red around resistance, meaning buyers are again trapped beneath reclaimed supply.

• The broader concern here is structural: IWM continues to develop what looks increasingly like an intermediate-term head-and-shoulders top.

• The left shoulder formed during the September-November period, the head during the January-March peak, and current weakness suggests the market is now moving toward the right-side resolution phase.

• Near term, we expect a test of the rising 200-day EMA, with $239 at the rising 50-week EMA acting as the more important downside reference.

• If that fails, the probability rises materially that small caps enter a full stage 4 markdown on the primary trend (monthly charts), rather than a temporary correction.

FOCUSED GROUP
XLB: Looking For A Short Entry Today

• Today’s trade focus is the materials complex, specifically XLB on the short side.

• A common mistake is assuming XLB is a metals proxy. In reality, the ETF is heavily dominated by chemicals, which means its behaviour often diverges materially from pure metals or mining strength.

• Price bounced aggressively from the 200-day EMA near 46.44, but the recovery has now reached a highly vulnerable zone: the declining 10-week EMA, alongside the falling 20-day and 50-day EMAs near 49.53.

• What matters most is that yesterday’s rejection occurred directly into the point of control, where visible range volume shows roughly 5 million shares traded red versus 3.9 million green.

• Even more importantly, this recovery happened on declining relative volume, which strongly suggests this is not accumulation but a bull trap.

• With gold, silver, uranium and broader commodity-linked components all weakening simultaneously, there is very little internal support for XLB to maintain this rebound.

• Our downside target remains 46.52, which implies roughly 5% lower, with yesterday’s high near 48.97 acting as the invalidation point.