OVERVIEW
🟢 Risk-On

📈 Nasdaq (QQQ)

• The undisputed leader: straight-line momentum, every dip absorbed.

• Breadth (% >20EMA: 52%) shows plenty of headroom — not euphoric yet.

• Equal-weight QQQE confirms this is broad Nasdaq strength, not just megacaps.

📉 Midcaps (MDY)

• Choppy and noisy vs. QQQ’s clean power.

• Supported at $597 (20EMA), but rejected again at $599–600 with supply pressing.

• Tactically not top focus — liquidity favors megacaps (NVDA, AI complex). Still risk-on structurally.

📊 Small Caps (IWM)

• Stronger than MDY: defended 10EMA on 144% relative volume.

• Intraday (1h) shows cleaner higher-lows, constructive trend.

• If it follows QQQ’s Monday surge template, small caps could extend higher.

🎯 Focused Stock: SEZL

• Textbook contraction at $92 POC with all MAs converging (20, 50, 200EMA).

• Financials sector + peers (DAVE) showing relative strength.

• Breakout >$92–93 could run toward $130 quickly. Clean risk below $85 demand shelf.

🚀 Focused Group: Technology (XLK + RSPT)

• Both cap-weighted (XLK) and equal-weight (RSPT) tech ETFs broke out in tandem.

• CANSLIM’s “L = Leaders”: probabilities tilt heavily toward swing traders aligned with this group.

MARKET ANALYSIS
The Bull Market Is In Full Swing

Stocks are holding near record highs after kicking off the week with another strong run. Monday marked the third straight day of fresh all-time closes, fueled by momentum in AI names and confidence that more Fed easing is on the horizon.

The spotlight today is on Jerome Powell, who’s set to give his first speech since the Fed cut rates for the first time this year. Markets will be tuned in for clues on how far and fast policymakers are willing to go. His comments will also frame the release of Friday’s PCE report — the Fed’s preferred inflation gauge — which could influence expectations for additional cuts, though the bias remains toward more easing.

Elsewhere, gold pushed to fresh record highs as rate-cut optimism grows, while Micron reports earnings after the bell. The chipmaker’s results will be closely watched for signs of just how much AI demand is boosting sales.

Nasdaq

% over 20 EMA: 52.47% | % over 50 EMA: 48.51% | % over 200 EMA: 59.40%

The Nasdaq remains the market’s undisputed leader, and yesterday’s move through the psychological $600 level crystallized that strength.

Many traders expected resistance here but instead, QQQ cut straight through on persistent relative volume (>120% of its 20-day average).

Momentum traders thrive in these environments because the index itself is signaling capital concentration into large and mega-cap tech and the exact segment designed to pull indices higher. And given QQQ’s weighting, wherever the Nasdaq goes, the broader market tends to follow.

🔹 Volume & Participation

While the last four sessions carried heavier absolute volume, the key is persistence. Sustainable rallies rarely come from one blowout day; they come from a series of above-average sessions where supply fails to push price lower.

That’s exactly what’s happening here: every minor pause has been absorbed and bid back up, confirming the demand is real.

🔹 Breadth: What the Numbers Actually Mean

• % over 20EMA: 52.47%

• % over 50EMA: 48.51% 

• % over 200EMA: 59.40%

These numbers tell us we’re not in an overbought regime. In euphoric phases, you often see 70%+ of names extended above their 20EMA, and that’s when risk of a sharp reversal rises.

We’re nowhere near that. Instead, the Nasdaq is rallying hard at the index level, but with plenty of headroom left internally before stress signals flash

S&P 400 Midcap

% over 20 EMA: 38.59% | % over 50 EMA: 51.87% | % over 200 EMA: 59.39%

If the Nasdaq is clean and powerful, the midcaps are the opposite: choppy, noisy, and harder to trust. Yesterday reinforced that divergence.

🔹 Structure & Levels

• Support: Buyers stepped in at $597 (rising 20EMA), showing there is still demand under the surface.

• Resistance: Short-term rejection again at $599–$600, capped by the declining 10EMA.

Where QQQ is cutting higher in a straight line, MDY keeps running into supply at the same levels.

🔹 What It Means

Capital flow is telling the story: money is being pulled toward the megacap leaders e.g. NVDA’s explosive breakout yesterday is the clearest example. When liquidity floods into the giants, midcaps naturally lose some bid.

That doesn’t mean the group is irrelevant. Theme > index.

Some of the biggest momentum stories right now (quantum names like RGTI, certain industrial tech setups) sit inside the midcap bucket. Price action in those individual leaders is far more important than the index tape.

Structurally midcaps are still risk-on (holding 20EMA, rising trend intact), but tactically, they’re not clean enough to be a top focus compared with the Nasdaq/large-cap tech complex.

We’d frame MDY as “secondary confirmation”: healthy enough not to be bearish, but not strong enough to deserve primary capital allocation.

Russell 2000

% over 20 EMA: 54.33% | % over 50 EMA: 66.83% | % over 200 EMA: 62.63%

The small caps are sitting in a similar structural position as midcaps (MDY) as both hovering near resistance, but the big difference is that IWM looks stronger under the hood.

🔹 Why Stronger?

On Friday, IWM defended its rising 10EMA with conviction, doing so on 144% relative volume vs the 20-day average. That’s an important distinction: when buyers show up on volume at rising trend support, it tells us demand is real, not just mechanical drift.

🔹 Daily + Intraday Alignment

Even zooming into the intraday (1h), IWM’s structure looks much cleaner. The index has been respecting rising moving averages and building constructive higher-lows with a stark contrast with MDY’s chop and repeated rejection.

🔹 Interpretation

This is why indices matter more as guides to group behavior rather than direct trade vehicles. If the Russell is climbing on rising relative volume and price is pushing, that’s all you need to know: small caps as a group are being bought. Don’t overthink it.

FOCUSED STOCK
SEZL: The Breakout Is Coming…

ADR%: 5.29% | Off 52-week high: -50.7% | Above 52-week low: +286.2%

SEZL has been quietly coiling into what looks like a textbook energy build. Don’t let the prior gap down fool you as the tape right now is setting up something powerful.

The Structure:

Price is compressing directly along point of control (POC) near $92, the highest volume-traded zone on the chart.

All the key moving averages are converging: the daily 20EMA, 50EMA, and 200EMA are pinching together. That’s rare, and it tells you supply/demand is balancing tightly. These setups often precede powerful expansions.

Volume is drying up inside the contraction which is another tell that sellers are exhausted.

Why It Matters:

SEZL is in the financials sector, which has quietly been one of the strongest relative strength areas of the market in September. Capital is already rotating here.

Peer action backs the case: names like DAVE have been ripping, confirming appetite for smaller-cap growth in this space.

The gap overhead from earlier this summer creates an “air pocket” of low-volume resistance. If buyers can punch through, that gap can fill quickly, accelerating momentum.

The Opportunity:

This is exactly the type of setup momentum traders want: a Stage 2 base-on-base contraction sitting right on key structure, in a strong group, with relative peers moving.

Breakout trigger is any decisive move above the POC zone (~$92–93) on rising relative volume. If that fires, SEZL has room to run quickly back toward $130+.

Risk is clean: below the $85 demand shelf, where buyers have repeatedly defended.

FOCUSED GROUP
XLK: Technology Is Where You Need To Be

If you’re wondering where leadership is right now, the answer is staring us in the face: technology.

When we combine the message of QQQ strength (large and mega-cap tech dominance) with the sector ETFs of both XLK (cap-weighted) and RSPT (equal-weight), the story is clear:

XLK broke out aggressively yesterday, extending a near-vertical run through September. That reflects heavy concentration in the megacap tech giants (think TSLA, GOOG, AAPL, NVDA, etc).

RSPT, the equal-weight tech ETF, is confirming the move. That’s crucial. It tells us breadth is expanding, and it’s not just the trillion-dollar names carrying the load.

When both cap-weighted and equal-weighted measures align, that’s institutional risk appetite flowing across the entire group. It’s one of the strongest confluence signals you can get as a momentum trader.

🔑 Why This Matters for Swing Trading

Momentum trading is expectancy math. Your best odds don’t come from “finding the next story”, they come from consistently positioning in the leading sectors where institutions are most active.

O’Neil’s CANSLIM (the “L” = Leaders): historically, 70%+ of the top-performing stocks each year come from the #1–2 ranked industry groups.

Relative strength persistence: studies (Jegadeesh/Titman, 1993; Asness, 2013) confirm sector momentum tends to persist 3–12 months. When tech is leading both cap-weighted and equal-weighted, probabilities tilt in your favor.

Risk efficiency: leaders inside leading groups give you the best R/R profiles, meaning, breakouts tend to stick longer, pullbacks are defended harder, and failed trades scratch instead of bleed.

CLOSING NOTE
A pause to say thank you.

We started this as a small group of traders who just wanted to share our research with the world.

What began as notes between us has now grown into something much bigger with so many thousands of you reading along every day. It honestly means a lot.

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