OVERVIEW
🟢 Risk On

QQQ: $580 flipped to support twice; consolidating under $585 with QQQE outperforming.

MDY: Breadth thrust with 72% above 20EMA; midcaps leading and should be prioritized over megacaps.

IWM: $240s holding at rising 10EMA; small caps bring higher ADR% and historically outperform post-Fed cuts.

COIN: $307 POC demand intact; above $323 volume pocket opens fast path to $350 with crypto peers ripping.

XLI / Industrials: High-volume breakout over $152 POC; broad confirmation via RSPN- sector scans are must-run.

🧠 Mindset: Edge is selectivity and expectancy flipped positive as breakouts started working; time to push selectively.

MARKET ANALYSIS
All Trend Following Signals Flashing Green

If you scan the financial media today, you’ll see the same headline everywhere: markets are “slipping” ahead of next week’s Fed decision.

We’ll say this categorically, that is not a fair characterization of what’s happening.

The market’s primary function is to discount the future. It doesn’t wait for events, it anticipates them, prices them in, and then moves on.

That’s why CME futures already assign an 92.5% probability to a quarter-point cut. The cut itself is no longer the story. What matters is how the tape behaves once the news is fully absorbed.

And on that front, strength is undeniable. The S&P, Nasdaq, and Dow all closed at record highs yesterday, with participation extending across financials, semiconductors, quantum computing, and cyclicals (to name a few). That breadth is forward-looking and it reflects positioning for what comes next, not anxiety about what’s behind us.

Today’s premarket pullback is so expected and this digestion is not weakness; it’s the mechanism by which trends sustain themselves.

Nasdaq

% over 20 EMA: 49.50% | % over 50 EMA: 45.54% | % over 200 EMA: 60.39%

For readers following along daily, this is where the power of supply/demand mapping shows up in real time.

The red supply band we’ve been tracking around $580 has already flipped into support- twice.

First on Sept 10th, when QQQ dipped into the rising 20EMA on the hourly and bounced hard, and again yesterday in the opening hour, where the same zone absorbed selling and produced a sharp intraday reversal on high relative volume. Both times, demand stepped in exactly where the structure suggested.

That bid carried QQQ back under the $585 overhead supply shelf, where it is currently consolidating. Importantly, this is not weak price action, it’s controlled digestion. Yes, Nasdaq is lagging slightly versus QQQ’s peers, but it’s by no means breaking down.

One more layer: always cross-check the equal-weighted QQQE. This strips out mega-cap distortion, and right now QQQE is quietly outperforming, breaking higher from its July–September base.

Supply overhead sits around $100, but the relative volume surge confirms demand is broadening under the surface.

S&P 400 Midcap

% over 20 EMA: 72.25% | % over 50 EMA: 69.25% | % over 200 EMA: 64.50%

Midcaps absolutely ripped yesterday. The move was explosive and not just price, but breadth. Over 72% of components now sit above their 20EMA, marking one of the strongest breadth thrusts we’ve seen across any index in weeks.

This is what you want to see in a growth environment with rate cuts on deck. Capital is rotating back into the mid-tier, and it’s happening with real velocity.

There’s not much to overanalyze here: the structure is clean, breadth is expanding, and the group is back in line with what you expect to see in a healthy bull phase.

Our read: if you’re allocating attention, midcaps should be prioritized over the stretched megacap tech names.

Russell 2000

% over 20 EMA: 72.09% | % over 50 EMA: 70.09% | % over 200 EMA: 63.79%

Yesterday’s surge pushed IWM back into the $240s with demand consistently stepping in on tests of the rising daily 10EMA.

From an order flow perspective, that’s powerful: every retest of a rising short-term EMA that holds signals dip supply being absorbed and recycled into fresh demand. That’s the hallmark of controlled accumulation.

For momentum traders, small caps bring a structural edge. Their components typically carry a higher average daily range (ADR%), often 5% or more.

That volatility means sharper price discovery and cleaner R/R setups: moves play out faster, giving you more asymmetric payoff when timed correctly.

A stock is just a vehicle for reward-to-risk and small caps simply move with more horsepower.

Historical context: Post-rate cut environments have often seen small caps outperform.

For example, following the 2001 and 2008 easing cycles, Russell 2000 outpaced the S&P 500 in the first 6–12 months as liquidity filtered down into riskier, growth-sensitive names.

While history doesn’t repeat tick-for-tick, the pattern is clear: when monetary policy pivots to easing, small caps tend to benefit disproportionately.

🧠 Mindset Check: Knowing When To Push

The single most underappreciated edge in trading isn’t pattern recognition or even position sizing. It’s selectivity… knowing when the odds justify playing at all.

Every trade is a bet. Expectancy math makes this explicit:

Where:

• E = expectancy (average profit/loss per trade)

• Pw​ = probability of a win (win rate)

• AvgWin = average gain on winning trades

• Pl = probability of a loss (1 – Pw)

• AvgLoss = average loss on losing trades

Your system might average 35–40% winners, but in a trending regime, Pw expands and average winners extend further, making expectancy strongly positive.

In chop, Pw contracts while losers stay constant and expectancy turns negative. Deploying risk here is equivalent to buying a lottery ticket with negative payout odds.

Here’s where retail has a structural edge. Hedge funds must always stay invested, forced to play every hand. We aren’t. The option to sit in cash is like folding bad hands in poker- a game-theory edge that preserves capital until the table tilts in your favor.

Statistically, only ~20–30% of market days deliver “clean” trending opportunity. The other ~70% is noise, failed breakouts, or mean reversion. If you trade through all of it, you’re paying the market a participation tax.

This is why discipline is alpha.

Traders don’t just ask: Where’s my setup? 

They ask: Is the game currently worth playing? 

That difference is subtle but very decisive.

Applied to yesterday’s tape, we saw a material shift in market dynamics: breakouts that had been failing for weeks finally started to work, and a number of long positions began to follow through. That’s the first real sign that the probability set is improving.

Understand: our real edge is not trading more, but trading when the expectancy curve bends sharply in your favor.

Sit out the negative EV regimes. Press when leadership aligns, breadth confirms, and probability is skewed. That’s how you compound without bleeding.

FOCUSED STOCK
COIN: Sitting Right at the Breakout Line

ADR%: 4.17% | Off 52-week high: -27.1% | Above 52-week low: +127.2%

COIN is sitting at a critical breakout point after carving a clean base through August and September. Demand has been consistent at the $307 Point of Control, with buyers refusing to let price undercut that band and showing a textbook accumulation footprint.

Crypto strength: BTCUSD and ETHUSD continue to grind higher, and COIN remains the most liquid equity proxy for that entire trade. The stock also benefits from strength in financials, putting it at the intersection of two leading themes (see XLF).

Technical positioning: On the VRVP, $323 marks the final dense volume shelf overhead. Above that, the profile thins out quickly, leaving “open skies” toward $350+. With COIN already back above its 10-, 20-, and 50-day EMAs, momentum accounts will be watching closely for a decisive push.

Relative confirmation: Across the crypto equity space, miners like CIFR, HUT, IREN, and BITF have all been rallying hard and breaking higher. When second-tier proxies are already surging, it often signals that names like COIN are about to also follow through with higher conviction.

FOCUSED GROUP
XLI: This Is Very Important Move

Industrials just delivered one of the most impressive breakouts we’ve seen in weeks. XLI ripped through its $152 point of control on the highest relative volume day of the month, launching from a tight contraction around the 10/20/50EMA cluster.

The equal-weight RSPN confirmed with its own breakout, even showing relative outperformance and demonstrating a strong sign that this isn’t just cap-weight leadership, but a broad-based move across the sector.

This matters because Industrials are one of the most macro-sensitive sectors. They are capital-intensive, cyclical, and directly correlated with both financing conditions and economic activity.

With the Fed poised to cut rates, the setup aligns with history: across easing cycles since 1970, the S&P 500 has delivered ~12% median returns in the 12 months after the first cut (RBC Wealth Management). Cyclical sectors such as Industrials have consistently outperformed in those periods.

It’s also a sector that overlaps heavily with small caps (Russell 2000). That means strength here not only signals a healthy pro-cyclical rotation but also provides support to IWM.

And here’s the trader assignment:

• Go identify the top 5 growth and top 5 momentum names inside Industrials.

• For growth: apply a CANSLIM lens e.g. annual EPS growth of 25%+ YoY, strong sales acceleration, and clear industry leadership.

• For momentum: look for names that have made the largest relative moves over the last 1, 3, 6, and 12 months, ideally sitting near all-time highs and tightening in volatility contractions.

In Swingly PRO, we run these scans for you. Every day our members see the leading momentum and growth stocks in each sector, so you always know exactly where capital is concentrating.