OVERVIEW
The Bull Thesis Still Stands Strong

Yesterday’s session can only be described as a classic shakeout—a broad market retest of a prior resistance level. This type of price action is extremely common. When a key resistance level is broken, the market will often pull back to test conviction at that level before resuming its move higher. Similarly, when a prior support level is lost, it often gets retested before confirming further downside.

What’s particularly notable is that despite everything the market has faced over the last few weeks—geopolitical tensions, inflation data, earnings reactions, and macro uncertainty—it has absorbed each event well. Even when we see intraday digestion, the market continues to show strong closes, reinforcing underlying demand.

These shakeouts serve an important function: they help determine which stocks have true relative strength, where demand is strongest, and whether recent breakouts are being supported by real conviction. In today’s breakdown, we’ll highlight why the bull thesis remains intact and where the best setups are emerging.

Nasdaq

The QQQ, which has been one of the strongest areas in the market—tracking large- and mega-cap technology stocks—showed remarkable resilience in response to yesterday’s attempt to break lower.

After trending higher, momentum cooled off, leading to a sharp intraday pullback yesterday. The QQQ dropped to test its rising daily 10-EMA, which also aligned with the critical breakout level at $532—the very level that was reclaimed in the most recent breakout.

However, what happened next was not a sign of weakness—in fact, it was the opposite. The QQQ was met with a wall of buying aggression, nearly erasing all intraday losses. Looking at the Visible Range Volume Profile (VRVP), we can see that the $532 level, once a major resistance, has now become strong support.

This is a character shift—a powerful indication that the trend has changed. What was once a level where sellers got aggressive has now become a level where buyers are stepping in with conviction. This kind of reaction strengthens the bull thesis, reinforcing the idea that buyers remain in control.

We see the same bullish reaction in the QQQE—the equally weighted variant of the Nasdaq. Just like the QQQ, the QQQE formed a red hammer candle during yesterday’s intraday retracement, testing both its prior breakout zone and the rising 10-EMA on the daily chart.

Whenever we see price retesting rising moving averages—especially the short-term 10-EMA—it’s typically a strong indication that the trend remains intact. This price action signals that buyers are stepping in aggressively at key levels, reinforcing market strength.

From our perspective, the Nasdaq remains in a strong uptrend, and this recent choppy, digestion phase is likely nearing its end. All signs point to a continued push higher.

S&P Midcap 400

The same strength seen in large-cap tech does not extend to the riskier capitalization groups of the market. Midcaps, for example, failed to hold their Point of Control (POC) at $585, breaking lower to test their ascending support level at $578. So far, this support level has held up, keeping the MDY (S&P MidCap 400 ETF) afloat, but the weakness here is worth noting.

Looking at the weekly chart of the MDY, we can see that it held above the weekly 20-EMA, a crucial level for maintaining the current uptrend. This aligns with the broader structure, as the MDY has been forming a bullish pennant for months.

For this pattern to remain valid, we need to see buying momentum pick up and a push higher in the coming sessions. Otherwise, failure to reclaim strength here could lead to a more challenging period for midcaps in the weeks ahead.

Russell 2000

Small caps are in the same position as midcaps, having lost their demand level yesterday but managing to find support at a key area.

The focus now is on how the Russell 2000 (IWM) closes today. A strong recovery above $227 would reinforce confidence that small caps can hold their range and avoid a breakdown next week. Without that move, we risk seeing further weakness in this segment of the market.

Bitcoin (BTCUSD)

One particularly interesting development is what we're seeing in the cryptocurrency space, specifically with Bitcoin (BTCUSD), which is currently pushing higher and preparing to test $100,000 once again.

BTCUSD has been trading within a secondary bull flag or volatility contraction pattern (VCP), following its major breakout in October of last year, where it surged +63%. This setup is exciting because of the strong correlation we often see between BTCUSD and the broader market—both tend to move in tandem.

Additionally, BTCUSD serves as a proxy for investor sentiment, helping gauge overall risk appetite. As a traditionally higher-risk asset, strength in cryptocurrency often signals increased demand for riskier securities, including equities.

DAILY FOCUS
What Does The Bigger Picture Tell You?

One of the most important habits of a successful trader is learning to control emotions—especially during intraday pullbacks. The market moves fast, and it’s easy to react impulsively, but two key actions can help you stay grounded:

1️⃣ Always wait for the close – Intraday volatility is often just noise. Making rash decisions mid-session, like selling positions out of fear, can lead to unnecessary mistakes. The closing price gives a much clearer picture of market strength or weakness.

2️⃣ Zoom out and study market structure – The bigger picture matters more than short-term fluctuations. When in doubt, step back and analyze the weekly chart. Weekly trends help filter out daily noise and give you a clearer sense of where the market truly stands.

If you want to truly understand market structure and improve your ability to navigate volatility, two key figures to study are Stan Weinstein and Richard Wyckoff. Their work provides powerful frameworks for identifying trends, accumulation/distribution phases, and recognizing the underlying forces that drive price action.

📖 Stan Weinstein – "Secrets for Profiting in Bull and Bear Markets"
Weinstein's Stage Analysis breaks the market into four distinct phases (accumulation, uptrend, distribution, and downtrend). Learning to recognize these stages can help you time entries and exits more effectively.

📖 Richard Wyckoff – Wyckoff Method & Market Structure
Wyckoff’s principles focus on smart money movements, supply and demand, and price cycles. His concepts—like accumulation/distribution, spring patterns, and the composite operator theory—are essential for understanding how markets truly function.

WATCHLIST
Today’s Main Focus

MSTR: MicroStrategy Incorporated

• MSTR remains a top focus today, thanks to the strong momentum in BTCUSD, which is likely to drive bullish sentiment in the stock. As the premier crypto-related equity in the U.S. market, MSTR tends to move in tandem with Bitcoin’s price action.

• From a technical standpoint, MSTR looks exceptional—we’re seeing tight contractions in both price and volume, a classic sign of accumulation before a breakout. The stock is now approaching key overhead resistance, and if momentum continues, we could see a breakout attempt soon.

• That said, patience is key. It’s crucial not to anticipate a breakout before it actually happens. Our job as traders is not to predict but to react—think of it like surfing. You don’t try to ride the wave before it forms; you wait, position yourself properly, and ride it once it actually breaks.

• If MSTR follows through today, we’ll be watching closely for high relative volume confirmation before taking any action.