OVERVIEW
What You Need To Know

Macro

• Premarket strength is purely a technical oversold reaction, not a macro shift — volatility, crypto, and global demand all still indicate active de-risking.

• Any rebound here is likely short-lived; conditions remain fragile until volatility cools and buyers return with conviction.

Nasdaq (QQQ)

• One of the worst selloffs in years: 200% RVOL, a 4.6% range, and a complete slice through multiple demand layers into the $585–$590 HVN.

• QQQ now sits below the 10-week EMA for the first time in 7 months with accelerating downside pressure — only short-term mean reversion is possible, no trend setup exists.

S&P 400 Midcap (MDY)

• MDY failed perfectly at declining resistance and collapsed on 187% RVOL, breaking its short-term demand shelf with no support until lower balance levels.

• Weekly structure is forming a broad Eve & Eve double top, one of the highest-risk intermediate patterns with a historical ~16% average decline.

Russell 2000 (IWM)

• Heavy selloff on 226% RVOL with range expansion far above its ADR confirms rising sell-side pressure across small caps.

• Price is now tracking toward $224 (major demand + 200-day EMA) and the developing double-top breakdown reduces edge for new shorts after a steep acceleration.

Focused Group: XLV

• Healthcare leadership is extended and no longer in a favourable risk window; the optimal entries (Oct 1 and Nov 10) are behind us.

• Rising volume inside consolidation and exhaustion candles in leaders like GH show distribution, crowding, and late buyers getting trapped.

MARKET ANALYSIS
The Sell-Off Is Accelerating

• Markets bounced in premarket after Fed’s Williams hinted at a possible December rate cut, but this is not why equities may stabilize.

• Cuts are being discussed because growth is weakening, and because in one day suddenly now the conditions are improving.

• The only real driver of any short-term rebound is simply just the fact markets are extremely oversold across multiple timeframes which wil create room for a technical based bounce, but not a fundamentally driven one.

• Volatility remains elevated and rising, which tells us investors are still de-risking. Until volatility cools, sentiment stabilizes, and buyers return with conviction, broader conditions stay fragile.

• Crypto weakness reinforces this risk-off environment with Bitcoin hitting fresh multi-month lows is consistent with investors stepping back from high-beta assets.

• Oil sliding again, partly due to geopolitical developments, helps the inflation narrative but also signals slowing global demand, which matters more for medium-term risk appetite.

Bottom line: Any bounce here would be technical and macro headlines haven’t improved; markets are simply stretched enough to justify a temporary reset.

We would be very cautious assuming the worst is behind us.

Nasdaq

% over 20 EMA: 23.52% | % over 50 EMA: 28.43% | % over 200 EMA: 47.05%

• Yesterday was one of the worst single-session selloffs for the Nasdaq 100 in modern history, and we are not using that language loosely.

• QQQ printed ~200% RVOL relative to an already-elevated 20-day period, and the intraday range was 4.6%, which is:

  • 3× its 20-day ADR of 1.6%

  • Over 50% of the entire range off the $637 highs in just one session

• The daily candle sliced back through multiple demand layers and is now sitting inside the high-volume node around $585–$590, where prior support has repeatedly been tested.

• The weekly structure is equally weak as the QQQ is below the 10-week EMA for the first time in seven months, confirming a material shift in momentum.

• Price is now testing the 20-week EMA, and although this level often triggers short-covering as shorts look to profit, we do want to stress that we have:

  • Highest weekly RVOL since April 2025

  • Steep, uninterrupted acceleration in downside pressure

• This kind of tape typically brings out opportunistic buyers only for short-term mean reversion which should not be mistaken for a trend continuation play.

• With this level of velocity and volume expansion, the Nasdaq 100 is an outright avoid for any fresh positioning until the structure stabilises.

S&P 400 Midcap

% over 20 EMA: 24.00% | % over 50 EMA: 27.75% | % over 200 EMA: 45.50%

• MDY saw a significantly intense selloff yesterday, rejecting the exact setup we highlighted with the bull-trap push into the declining 20-day EMA and the declining resistance band near $588.

• Intraday range printed 3.23%, which is:

  • More than 2× the MDY ADR% of 1.44%

  • Also one of the largest single-session ranges of the past year

• Relative volume came in at 187%, again confirming broad selling, and the midcap ETF sliced straight through the short-term demand shelf and is now sitting at the lower end of the recent balance, with no immediate structural support inside the prior volume node.

• The weekly picture is the real concern as the MDY is forming what looks to be an Eve & Eve double top with two rounded, broad tops at the same price level ($610).

• This isn’t a pattern we dismiss lightly on an intermediate timeframe as according to Bulkowski’s simulation across 940 trades:

  • Overall performance rank: 12 / 36

  • Break-even failure rate: 20%

  • Average decline: 16%

  • Pullback rate: 65%

  • % hitting target: 43%

Russell 2000

% over 20 EMA: 24.71% | % over 50 EMA: 28.36% | % over 200 EMA: 46.45%

• IWM also experienced a very heavy selloff, though not quite as severe as MDY, yesterday’s decline came with ~226% RVOL which is still very high.

• Intraday acceleration was extreme relative to the ETF’s typical behaviour and we saw range expansion well above its 20-day ADR, confirming that selling pressure is still unfortunately rising.

• Price has broken decisively below short-term support and is now moving toward the next major level near $224, which aligns with:

  • A key prior demand shelf

  • The rising 200-day EMA

• This area is the next logical test if weakness continues and the weekly structure is deteriorating but still marginally stronger than MDY. The IWM is currently sitting on top of the 50-week EMA, whereas MDY has already lost it.

• That said, the pattern forming is the same with a clear double-top structure around the $243–$250 region, and the breakdown from that pattern is already underway.

• Regarding shorts: While this is technically a weak setup, shorting after a steep multi-day acceleration is typically lower quality.

  • Short trades tend to have high magnitude but very short duration.

  • The best entries are before the unwind start and here the asymmetry for new shorts is reduced, and reversion-chop becomes more likely.

FOCUSED GROUP
XLV: Late To The Healthcare Party

• We’ve been highlighting the relative strength in Healthcare for several weeks now, but it’s important to be very clear:
  the time for high-quality long exposure has already passed.

• The two legitimate entries were:

  • (1) The 30 Sept – 1 Oct breakout from Stage 1 into Stage 2 on the first clean structural shift.

  • (2) The secondary VCP breakout on 10 November, which offered a tight, controlled add-point.

• We are no longer in an optimal risk window. XLV is currently 4.07% extended above the 10-week EMA, and chasing extended healthcare leadership at this stage has poor asymmetry.

• Volume inside the current consolidation is rising, which is not what you want to see after a parabolic rotation into strength. Rising consolidation volume usually means:

  • Supply is pushing back

  • The trend is becoming crowded

  • Institutions are no longer accumulating; they’re distributing into strength

• This is further confirmed when you look inside the group and you see previous momentum leaders showing exhaustion. E.g. Stocks like GH (Guardant Health) printed huge rejection candles on elevated volume, signaling buyers are fatigued and late entrants are getting trapped.