MARKET ANALYSIS
Here’s What You Need To Know

• We saw a very needed bounce to start this premarket in February, with equities building on Monday’s strength and continuing to respect their intermediate weekly structure.

• Despite elevated volatility across asset classes last week, the broader market has so far behaved like it is digesting gains rather than transitioning into distribution.

• From a trend perspective, the most important takeaway is that key indices remain above their rising 10-week moving averages, keeping the intermediate trend intact.

• Short-term price action remains noisy, largely due to ongoing mega-cap earnings and recent positioning resets, but this has not translated into meaningful weekly damage.

• One notable macro development came from Washington, where Donald Trump announced the launch of a $12 billion U.S. strategic critical minerals stockpile, known as Project Vault.

• The initiative is aimed at reducing U.S. reliance on China for rare earths and critical materials, with funding expected to combine private capital and government-backed loans.

• Markets reacted quickly, with rare earth and critical mineral equities seeing sharp premarket strength, reinforcing the policy-backed bid under domestic resource and infrastructure-linked themes.

• This aligns well with the broader leadership we’ve been tracking in industrials, materials, energy-adjacent services, and select infrastructure names, rather than speculative growth.

• Precious metals also rebounded after last week’s historic liquidation, supporting the view that the recent sell-off was primarily a positioning reset as things clearly got very overbought and the long trade was crowded.

Nasdaq

44.55%: over 20 EMA | 53.46%: over 50 EMA | 54.45%: over 200 EMA

• The NASDAQ defended a critical level yesterday, bouncing cleanly off the rising 50-day EMA, which we highlighted as one of the most important levels to hold.

• More importantly, on the higher timeframe, this bounce also came directly off the weekly point of control and the rising 10-week moving average, which keeps the broader weekly structure intact.

• That said, the bounce lacked conviction, with relative volume coming in at just 90% of the 20-day average, suggesting demand was present but not aggressive.

• There remains heavy supply overhead around the 628 area, which is likely to continue driving volatility and intermittent downside pressure.

• Breadth remains weak, with only ~45% of NASDAQ stocks above their 20-day EMA, indicating that participation is still very narrow.

• In fact, despite the QQQ closing higher, the average NASDAQ stock declined on the session, meaning gains were driven by a small handful of names.

• The key takeaway is that the NASDAQ is still in a large weekly base and volatility contraction pattern that has been developing since October 2025.

• At this stage, the most constructive outcome would be sideways contraction, allowing the market to absorb supply rather than attempting premature breakouts.

S&P 400 Midcap

50.12%: over 20 EMA | 65.91%: over 50 EMA | 64.66%: over 200 EMA

• Mid-caps continue to show relative strength versus the NASDAQ and defended Friday’s lows around 624 with clear evidence of demand.

• The visible range volume profile shows aggressive buying as price approaches the rising 10-week moving average near 623.

• At 625, buying pressure exceeded selling pressure, and near Friday’s lows the imbalance was even more pronounced, with nearly double the green volume versus red.

• This behaviour is consistent with a healthy stage-two rally that began after the Morning Star formation in mid-November.

• On a breadth basis, mid-caps remain structurally stronger, with roughly 66% of stocks above their 50-day EMA, compared to just ~53% in the NASDAQ.

• Until big-tech earnings are fully resolved, mid-caps remain better positioned and are likely to continue outperforming.

Russell 2000

56.84%: over 20 EMA | 63.24%: over 50 EMA | 65.61%: over 200 EMA

• Small-caps are now the strongest capitalisation group, with a relative strength of ~83 versus the S&P 500.

• Yesterday’s bounce came on 110% relative volume, confirming genuine demand stepping in at key levels.

• Although price rejected the declining 10-day EMA near 264, the more important takeaway is the intact weekly structure.

• On the weekly chart, small-caps remain in a confirmed stage-two rally that began after the November Morning Star reversal.

• Volume profile data shows aggressive accumulation at recent lows, with roughly 3.4 million shares traded green versus just 1.2 million traded red.

• A retest of the rising 10-week moving average near 256.7 would not be surprising and would still be considered constructive.

• From a probability standpoint, strength continues to reside in small- and mid-caps, not the NASDAQ.

FOCUSED STOCK
PRIM: Strongest Stock, Strongest Sector

ADR%: 4.06% | Off 52-week high: -1.5% | Above 52-week low: +212%

• PRIM continues to stand out as a leadership name, with a relative strength rating of 98 versus the S&P 500.

• The stock sits within the industrials sector, which remains one of the strongest areas of the market.

• PRIM broke above its 10-week moving average in mid-January and has since been contracting in a clean volatility contraction pattern.

• Price is holding above the rising 10-day EMA, which keeps the short-term trend constructive.

• The company is tightly linked to infrastructure, utilities, energy, and industrial services and all areas are seeing sustained capital inflows.

• This is exactly the type of behaviour we want to see in a market with elevated volatility: relative outperformance, tight price action, and clean structure.