MARKET ANALYSIS
Here’s All You Need To Know

• U.S. futures are higher this morning after reports that Washington sent Iran a ceasefire proposal through intermediaries, which has pulled crude sharply lower and given risk assets some breathing room after several sessions dominated by geopolitical stress.

• The market is still trading primarily as an oil-and-yields tape. When crude falls, yields ease and equities rally. When crude rises, inflation concerns quickly return and pressure risk assets again.

• That is exactly what we are seeing today. Brent and WTI are down hard, Treasury yields are softer, and futures are responding positively. For now, markets are treating lower energy prices as a short-term macro relief valve.

• The issue is that this bounce is being driven by headlines, not resolution. Iran has continued strikes, public messaging remains mixed, and the broader conflict still looks far from settled. That keeps this move vulnerable to reversal if diplomacy stalls.

• Inflation also remains a problem. Import and export prices came in hotter than expected, which suggests price pressures were already building even before the latest oil shock fully fed through.

• That matters because lower crude helps at the margin, but it does not fully remove the pressure on the Fed. The market may get some near-term relief, but the broader inflation backdrop is still not especially clean.

• There are also signs that the macro strain is beginning to hit the real economy. KB Home cut guidance and pointed directly to Middle East-related uncertainty as another factor weighing on an already fragile housing backdrop.

• At the same time, recession odds are creeping higher across several major macro desks. None of that guarantees a contraction, but it does reinforce that this is not a stable macro environment beneath the surface.

• In leadership terms, investors are still rotating quickly back into AI and semiconductor names when the tape allows it, while gold and mining stocks are also catching bids. That combination tells you the market still wants growth exposure, but it is not willing to fully let go of defense yet.

S&P 500

19.88%: over 20 EMA | 24.05%: over 50 EMA | 47.71%: over 200 EMA

• SPY remains in a clear stage-four breakdown phase, with price now down roughly 5.8% over the past 22 sessions in what has been a persistent, structurally clean downside move.

• The decline has been accompanied by rising relative volume, particularly after the decisive loss of the 678 point of control, which is where participation materially expanded and downside conviction became more obvious.

• Since that break, price has moved directly into the 50-week EMA, which also broadly aligns with the 200-day EMA, creating the first meaningful higher-timeframe support zone since the breakdown accelerated.

• Friday’s reaction off that level produced what looked like an attempted capitulation bounce, but importantly, the move occurred with price only reaching approximately -3.5 ATR multiples below the 50-day EMA.

• Historically, true downside exhaustion tends to occur closer to -5 to -8 ATR multiples, suggesting that while price became stretched, it did not yet reach the type of extension typically associated with durable panic lows.

• That distinction is important as it argues that Friday’s bounce should still be treated as a reflexive stabilization and structurally, the current rebound is now pushing into a critical decision zone near 661, where the declining 10-day moving average is already acting as immediate overhead supply.

• This area carries additional significance on the visible range volume profile: roughly 7 million shares traded red through 661 versus only 3.6 million traded green, which tells us that supply remains dominant as price attempts to reclaim that zone.

• In other words, what previously acted as demand between March 9 and March 18 has now clearly transitioned into resistance which is exactly the type of character shift that tends to define ongoing correction phases.

• Beneath current price, the visible range volume profile remains thin until roughly 640, creating a volume pocket where price could move relatively quickly if this bounce fails and sellers regain control.

• That leaves open the realistic possibility of another ~2% downside leg if the current pre-market firmness cannot hold above near-term resistance.

• From a larger pattern perspective, SPY also completed a triple top formation, with three distinct peaks formed between:

  • January 7 – January 19

  • January 26 – February 3

  • The final February peak preceding breakdown

• The pattern has now fully validated. Historical work, including Bulkowski’s simulations, assign a roughly a 65% probability of downside resolution once confirmed, with a 63% probability of an intervening pullback retest, which is effectively what the market is attempting now.

• The decline from the top is already approaching 7%, meaning the triple top objective has largely begun playing out.

• For now, the 50-week / 200-day EMA cluster remains the key stabilization zone, but unless price can reclaim supply above, this still looks more like a pause inside an active corrective structure than a completed low.

• RSP continues to confirm that this is not simply a cap-weight distortion driven by mega-cap weakness. The equal-weight index is showing its own independent deterioration, which reinforces that selling pressure remains broad underneath the surface.

• Structurally, RSP now resembles a developing head-and-shoulders top, with:

  • the left shoulder formed in early January,

  • the head created during the late January / February advance,

  • and the right shoulder now appearing to fail beneath resistance.

• Yesterday’s attempt to reclaim the 10-day EMA at 193.60 failed cleanly, which is significant because that reclaim would have been the first early signal of short-term stabilization.

• Instead, price reversed directly off that level, again confirming overhead supply.

• Volume profile data reinforces the rejection: roughly 4 million shares traded red at 193.60 versus only 2 million green, showing that sellers remain more aggressive on pushes into resistance than buyers are on recovery attempts.

• Monday’s inverse hammer reversal candle, combined with the large true range of the session, further supports the idea that upside attempts are still being sold rather than accumulated.

• Current ATR on RSP is running near 2.4%, materially above the 1.3% 28-day ADR, meaning daily movement remains significantly elevated relative to normal conditions.

• That volatility expansion typically occurs during active directional repricing, not stable base-building.

• From here, the most likely path remains another downside move toward 189.30, where the rising 200-day EMA aligns with prior demand.

• That would imply roughly another 2% lower, which remains entirely consistent with current structure if the open rejects again.

• The key nuance between SPY and RSP is breadth behavior:

  • SPY is seeing relative volume accelerate into weakness, validating the downside move.

  • RSP is seeing relative volume begin to decelerate, which suggests broader market selling is becoming increasingly stretched.

• That aligns with breadth internals showing only ~19% of stocks above the 20-day moving average, which places the market increasingly into mean reversion territory.

• However, if a reflex bounce does emerge, it is more likely to come from oversold non-megacap participation rather than leadership from the largest index names.

Nasdaq

15.84%: over 20 EMA | 20.79%: over 50 EMA | 42.57%: over 200 EMA

• QQQ had already spent 41 trading sessions attempting to stabilize, with price consolidating between February 5 and March 17 in a narrow range beneath the declining 50-day EMA while repeatedly holding above the 594 demand zone.

• That area initially showed some evidence of support. Around 594.30, volume clustering showed roughly 7 million shares traded green versus 6 million red, suggesting buyers were still willing to defend that level during the early phase of consolidation.

• The issue is that once the breakdown accelerated on March 19, that entire support structure changed character very quickly. The move lower came with expanding relative volume, which immediately raised the probability that prior support would convert into overhead supply rather than produce another durable bounce.

• That is exactly what we are now seeing. All of the prior buyers established around 593–594 are effectively trapped underwater, and every attempted reclaim into that zone is now meeting distribution rather than fresh accumulation.

• Yesterday reinforced that point. Relative volume came in at only 87% of the 20-day average, which is notably weak when compared with the much heavier participation seen during the downside acceleration over the previous two weeks.

• While the session printed a doji and superficially suggested indecision, the underlying volume profile still leaned decisively bearish.

• Around 584, which marked the midpoint of yesterday’s session, roughly 4 million shares traded red versus only 1.5 million green.

• At the lows, that imbalance became even more pronounced, with approximately 2 million shares traded red compared with just 700,000 green, showing that selling pressure continued to dominate even as total volume declined.

• That distinction matters: lower total volume does not invalidate the fact that each intraday push higher is still being met by heavier supply than demand.

Communication Services Now Adds New Pressure

• What makes the current Nasdaq setup more vulnerable is that XLC, previously one of the most resilient growth sectors, has now also entered a stage-four breakdown phase.

• This is critical because the two largest weights inside XLC, Meta Platforms and Alphabet Inc., are both now structurally deteriorating.

• Meta has already broken below its ascending support structure and Google is even more important here because it had effectively been one of the strongest leadership names inside the AI complex for the last five to six months.

• That leadership has now failed and the major demand zone around 290, which had held since November 2025, broke decisively yesterday on roughly 124% relative volume.

• For a company with a market capitalization around $3.6 trillion, this kind of technical failure has broader index implications far beyond the single name itself.

• From a pure structure perspective, Google now opens the door to roughly 9–10% additional downside, which materially increases short-side pressure inside XLC and by extension inside QQQ.

• The clean short entry was yesterday’s breakdown. At this stage, intraday mean reversion remains possible, but structurally the burden remains lower unless that breakdown is quickly reclaimed.

• The equal-weight Nasdaq is confirming that this weakness is not isolated to mega-cap technology.

• It has now broken below both the 200-day EMA and the 50-week EMA, with downside volume expanding aggressively and very little visible buyer response.

• Yesterday’s session ran at roughly 200% of 20-day relative volume, which is notable because that is occurring against what has already been an elevated volume backdrop since December 2025.

• This places equal-weight growth in a confirmed stage-four breakdown, and importantly, it is currently underperforming the cap-weighted QQQ.

S&P 400 Midcap

26.75%: over 20 EMA | 26.50%: over 50 EMA | 47.50%: over 200 EMA

• MDY’s bounce yesterday remained structurally weak as the relative volume was only around 100% of the 20-day average, which looks modest when compared with prior selloff sessions where volume reached 400% relative volume, particularly during the March 13 breakdown.

• Structurally, the ETF continues to resemble a head-and-shoulders top, with the left shoulder formed between early December and early January.

• Yesterday’s rejection came directly into the declining 10-week EMA, which remains a major technical ceiling.

• ATR expanded to roughly 2.3%, materially above normal daily movement, but importantly that occurred without convincing upside participation.

• A bounce occurring on low relative volume against declining moving averages is rarely how durable bottoms begin.

• Mid-caps still show slightly better breadth than large caps, with roughly 27% of stocks above the 20- and 50-day EMAs, but that likely means there is simply more room for deterioration rather than immediate strength.

• Given mid-caps were the relative leadership area for much of the last six to eight months, they now remain highly exposed if liquidation continues.

Russell 2000

32.21%: over 20 EMA | 28.35%: over 50 EMA | 47.57%: over 200 EMA

• IWM continues to mirror the same broader pattern: weak rebound attempts inside an emerging topping structure.

• A head-and-shoulders pattern is also visible here, formed through the contraction period between January 12 and March 2.

• Relative volume expanded aggressively during the breakdown from early March through last week, before price bounced off the 50-week EMA.

• Pre-market strength this morning should be treated cautiously.

• There is supply overhead all the way into 255–258, and while the volume profile technically leaves room for a squeeze higher, that would require materially stronger buying than the market is currently showing.

• The higher probability remains immediate selling pressure off the open rather than successful continuation.

• Markets briefly priced in stabilization after President Trump referenced productive discussions with Iran, but that narrative weakened quickly once Iranian officials pushed back publicly.

• As a result, the market is increasingly being forced to reassess whether Monday’s relief bounce simply priced in an outcome that now looks less likely.

• If Middle East tensions continue to worsen, growth remains highly vulnerable because higher oil, firmer yields, and lower confidence all work directly against duration-sensitive tech multiples and it is very likely the smallest and riskiest names (the small caps) will suffer the worst of it.

FOCUSED STOCK
ARM: A Gap Fill Short Off The Open

ADR%: 4.43% | Off 52-week high: -26.3% | Above 52-week low: +68.7%

• Arm Holdings is gapping higher this morning after unveiling its first AI chip.

• Longer term, ARM remains inside a major stage-two consolidation base, with a large constructive monthly structure still intact since IPO.

• But tactically, the immediate question is whether enough marginal buying pressure exists to sustain upside in the middle of broad semiconductor fragility.

• Given current weakness across growth and semiconductors, our preferred view is to watch ARM for a gap-fill short setup intraday.

• If the gap fails and intraday strength cannot hold, the short becomes attractive into the close.

• If instead ARM absorbs supply and holds strength, it should immediately move onto the watchlist as a potential relative-strength leadership candidate, because the larger monthly base remains highly constructive.

• For now though, broad long exposure in growth remains difficult to justify until the wider complex proves it can hold bids consistently.