NEWS
Nvidia to Take $5.5 Billion Hit Over China Chip Restrictions

Nvidia shares slid over 6% in after-hours trading Tuesday after the company announced it will record a $5.5 billion charge tied to its H20 AI chips exported to China and other regions. The hit comes after the U.S. government told Nvidia it would now need a license to export these chips — a rule that takes effect immediately and will remain in place indefinitely.

The H20 was specifically designed to comply with earlier U.S. export restrictions targeting advanced AI processors, and it still generated an estimated $12–15 billion in revenue in 2024. However, Nvidia’s CEO Jensen Huang recently warned that Chinese sales have already halved due to existing export controls — and competition from local giants like Huawei is intensifying.

The latest move signals growing tension between U.S. tech policy and Nvidia’s global expansion, especially in China, which remains Nvidia’s fourth-largest sales region. The H20 chip, while similar to Nvidia’s top-tier H100 and H200 chips, features slower data speeds and is based on older AI architecture.

The U.S. has argued these chips could be used to build military supercomputers, justifying the tougher stance. But Nvidia cautions that more restrictions could hurt American innovation and global competitiveness.

To date, Nvidia has relocated some of its operations out of China in response to tightening regulations. And with new “AI diffusion rules” set to take effect soon, the pressure is unlikely to ease. Nvidia stock is now down 16% year-to-date, as broader trade tensions — including Trump’s tariff push — continue to rattle semiconductor markets.

MARKET
Have We Reached Peak Fear?

The worst-case scenario for the market seems to be off the table for now, but there’s still a palpable sense of uncertainty hanging in the air. At any given moment, a headline could hit and cause the market to drop—a reminder of the volatility that still looms despite some recent positive developments we have seen in the price action.

This morning, retail sales rose by 1.4% in March, matching forecasts and marking the best reading in over two years. This data signals the continued resilience of the U.S. economy, offering a reassuring sign ahead of the upcoming tariff announcements that could shake the market. The stronger-than-expected retail sales report comes as a much-needed boost to sentiment, especially when paired with recent news of exemptions on certain tech products. These exemptions have had a notable effect, particularly on the tech sector, providing a lift to some of the largest companies in the U.S.

However, despite these positive data points, we find ourselves in a strange limbo. While there’s some optimism about tech, the broader market remains cautious, with no major inflows into equities yet. The lingering sense of doubt, exacerbated by ongoing tariff concerns and potential shifts in policy, is keeping the institutional investors on edge which nly means choppy market conditions for us retail traders.

Nasdaq

The Nasdaq, which one would typically expect to show the greatest relative strength compared to the broader market, is continuing to exhibit this strength—albeit in a more cautious manner. The index has now printed two inside days at a critical supply level around $467, a zone we've discussed in the past two reports. This area has coincided with the recent rejection seen both yesterday and Monday, indicating significant overhead resistance.

The QQQ (which tracks the Nasdaq) is also showing a concerning volume-price divergence. Yesterday’s session saw the lowest relative volume of the month, a notable event considering the rising price trend. This divergence—where prices ascend but volume descends—is often a precursor to a big and explosive move. Historically, this type of behavior signals indecision and the potential for a sharp reversal, particularly when the prevailing trend is bearish. Unless we see strong positive catalysts today or in the coming sessions, the market is unlikely to see significant follow-through to the upside.

As we’ve already discussed, NVDA and AAPL are under significant pressure, and this is weighing on the broader MAGS (Microsoft, Apple, Google, etc.). These names, which typically lead the market due to their large retail following and high trading volume, are now showing a similar pattern of weakness. The stocks are consolidating below a key high-volume supply shelf just above the declining 20-EMA, a level that has acted as resistance since mid-to-late February.

Given the influence of these stocks on overall market sentiment, their failure to break through this resistance could signal further downside risk for the broader market. As the MAGS go, so often goes the market, making their price action crucial to watch in the coming sessions.

S&P Midcap 400

The midcaps mirrored the broader market in terms of price action yesterday, exhibiting a very low-volume session. While we did see a rejection against the overhanging 20-EMA, which has been a critical resistance level for some time, what’s worth delving deeper into here is the behavior beneath the surface—the order flow and the bid-ask dynamics.

Order Flow & Bid-Ask Dynamics: A Key Insight

When analyzing order flow, it’s important to understand that there’s always a conservation of buyers and sellers in the market. That means at any given moment, the total number of buyers equals the total number of sellers. What distinguishes one session from another, and what can provide us with crucial insights, is the behavior of these buyers and sellers—specifically, whether they are being aggressive or passive in their execution of orders.

• Aggressive buyers are those pushing their orders to the ask, eager to fill their positions at the prevailing price.

• Aggressive sellers are those hitting the bid, eager to exit at the prevailing price.

• Passive participants, on the other hand, are waiting for a better price, not willing to immediately take the other side of the market.

When we see very low relative volume coupled with a declining price trend, it tells us a few things:

1. Weak Participation: There’s a lack of aggressive buying support. If the price is declining on low volume, it suggests that sellers are able to push the price lower without significant resistance from buyers.

2. Bid-Ask Imbalance: The bid—the price buyers are willing to pay—may be weakening, or sellers are more willing to lower their asking price. In a market with low volume, this imbalance can exacerbate price movements as each new transaction sets a lower reference price. Essentially, price is moving lower because there’s not enough buying interest to counteract the selling pressure.

In low-volume environments, market makers (who facilitate trades by providing liquidity) may be adjusting their quotes more conservatively, contributing to the lack of buying pressure. This means that for price to move higher, we need a larger commitment from aggressive buyers, which is absent in these conditions.

Russell 2000

The small caps are also exhibiting the same technical setup as the midcaps, showing notable underperformance relative to the broader market. In the current climate, small-cap stocks are likely to be the last place any trader will look for sustained long exposure. The pressure on this segment is palpable, especially with the ongoing tariff situation, which is exerting significant strain on smaller companies.

Small caps often bear the brunt of economic uncertainty and shifting market conditions, and in this case, the tariff threats and trade war concerns are hitting them harder than larger-cap stocks. These companies tend to have smaller profit margins, less global diversification, and more vulnerability to changes in trade policy, which makes them more sensitive to the tariffs’ potential impact on costs and revenue streams.

DAILY FOCUS
Don’t Forget Powell’s Speech This Afternoon

Today, Fed Chair Powell will address the Economic Club of Chicago. While the exact topics of his speech are unclear, his recent remarks suggest that the Fed is in a wait-and-see mode, particularly as tariff negotiations continue and market volatility remains elevated.

Powell has acknowledged that tariffs could drive up prices and potentially slow economic growth. However, he also pointed out that key economic indicators still suggest a solid economy. The ongoing back-and-forth on tariffs has created uncertainty regarding both inflation and the broader economic outlook. As a result, Fed officials are currently weighing whether they need to adjust policy in response to market volatility and growing concerns about a potential recession—or whether they should remain patient and stick to their current strategy.

For the market, this translates to a likely holding pattern until Powell’s speech concludes. Given how sensitive the market is to any subtle shifts in language from the Fed, we may see heightened volatility depending on his tone and the specifics of his remarks.

From a technical standpoint, there is still work to be done, as we’ve previously discussed. However, we are continuing to see more and more relative strength from leading stocks that are setting up nicely. Despite the uncertainty, there’s potential for good setups if the market digests Powell’s speech and reacts with clarity.

We’ll discuss some of these leading names below. If you'd like to receive a complete daily focus list and gain access to more in-depth analysis, learn more about Swingly Pro.

WATCHLIST
2 Of The Top Relative Strength Leaders

CRWD: CrowdStrike Holdings, Inc.

• CRWD, one of the leading cybersecurity stocks, has recently reclaimed its 10-week and 20-week EMAs, signaling a strong recovery. The stock is now hovering just below its $400 breakout level, with a mere 2% separating the current share price from this key technical level.

• What stands out about CRWD is its consistent ability to build higher lows since 2024, even after enduring a major 50% pullback over just a few weeks. This price action highlights the stock’s resilience and potential for further upside. Currently, CRWD is only about 13.8% away from its 52-week high, indicating strong momentum.

GRND: Grindr Inc.

• GRND is arguably one of the leading names in the technology sector right now, despite not always making the headlines. This is surprising for a stock that has shown remarkable resilience during a time when many other tech stocks have faced significant pullbacks. While the broader tech sector has struggled, GRND has continued to push higher, and it is now sitting at near all-time highs, with its $19.30 breakout level just 2% away from the current share price.

• The volume profile for GRND is equally impressive. Over the past few months, we’ve seen a notable surge in volume, further solidifying the stock’s strength. Despite these higher volumes, GRND has not experienced any major pullbacks, which underscores its relative strength within the tech sector.