MARKET
A Very Big Open, But Is It A Trap?

Markets are opening with strong upside momentum after reports confirmed that tariffs will be more targeted, focusing on specific industries rather than broad-based measures. This shift has eased fears of an all-out trade war, boosting confidence across equities.

Adding to the optimism, Trump signaled potential flexibility in his tariff plans, which helped lift major indices in the previous session. Investors are now betting that the worst-case scenario—an aggressive, all-encompassing trade battle—may not materialize.

While the pre-market strength is a positive development, the real test will come after the open. We need to see sustained buying pressure, strong relative volume, and key levels holding as support. If this is just another relief rally, we could still see a sharp rejection intraday. As always, confirmation matters more than the initial move—let the market prove itself.

Nasdaq

The Nasdaq, the most growth-focused index, is showing the strongest pre-market action, gapping up into its key 200-EMA, a level it lost two weeks ago. This is a crucial test—if the open holds and buyers step in, it would mark the first major higher high since the breakdown began 4-5 weeks ago, signaling a potential shift in trend. However, we’ve seen this play out before—strong opens followed by heavy selling. Until proven otherwise, we remain cautiously optimistic.

It’s no surprise that the QQQ is leading the pre-market move, given that its top-weighted stocks are also showing strength. NVDA, in particular, is gapping up aggressively, setting up to challenge its own 200-EMA on the daily and potentially break out above $123, clearing a key descending resistance level which if taken out is a strong long trade in itself.

S&P Midcap 400

While large-cap tech names are driving the market higher, midcaps are still playing catch-up—which is expected. Big institutional players typically reallocate into midcaps later in a recovery, making them one of the last groups to see sustained buying pressure. That said, Friday’s losses are being recovered pre-market, but the MDY still has significant technical work to do before confirming a shift in momentum.

The Visible Range Volume Profile (VRVP) highlights a low-volume pocket just above the declining 20-EMA, a level that previously acted as major resistance. This will be the first test—if buyers can reclaim this zone, a fast move higher toward the 200-EMA could unfold, as that’s where the next high-volume cluster resides. Until then, midcaps remain a secondary focus, but if strength follows through, they could provide later-stage opportunities in the coming sessions.

Russell 2000

Small caps remain the weakest segment of the market—not only have they been hit the hardest during the recent downturn, but their pre-market gap-up is minimal compared to large and midcaps. Given the lack of meaningful demand, they are mostly an avoid right now.

If any long exposure is tempting in this environment, it makes far more sense to focus on large and megacap names, particularly in high-growth sectors. These are the stocks attracting institutional interest and showing actual signs of strength, while small caps remain stuck in a high-risk, low-reward zone for now. Until we see clear relative strength and a shift in trend, there’s little reason to engage with this group.

DAILY FOCUS
Don’t Get Impulsive: Stay Rational

A strong open doesn’t mean a strong day. We’ve seen this before—futures rip overnight, stocks gap up, and then by midday, the market rolls over. The key today isn’t just watching price action but how price interacts with key levels and volume. If this is a true shift in momentum, it won’t be a one-hour event—it will hold throughout the session and show continuation in the coming days.

The first step is watching relative volume in the first 15–30 minutes. If breakouts are happening on low or average volume, it’s likely just another weak bounce. But if we see genuine demand—volume 2-3x higher than normal, that’s different. The second key factor is the 5-minute opening range high (ORH). If stocks are clearing ORH with conviction and not immediately reversing, that’s a tradeable signal. However, if they stall, hesitate, or quickly get stuffed back below, that’s the market telling you patience is still the best option.

Zooming out is also critical today. Many names still haven’t reclaimed key levels on the weekly chart, meaning this could just be noise within a broader downtrend. If a stock is still trapped under a declining 20EMA on the daily, is it really a breakout? Context matters. The best traders aren’t the ones who jump first—they’re the ones who wait for confirmation and size up when the trade proves itself.

You won’t be late. The biggest mistake traders make on days like this is thinking they need to nail the open. The best trends unfold over multiple sessions, not in a five-minute window. If this is real, you’ll have plenty of time to scale in. But if it’s just another short-lived rally, you’ll be grateful you stayed on your hands.

WATCHLIST
Focus On These On A Strong Reaction

MSTR: MicroStrategy Incorporated

• MSTR, the undisputed leader in the cryptocurrency/Bitcoin space due to its massive BTC exposure, is showing notable strength in pre-market as it finally clears a long-standing descending resistance level that has been in place since late November 2024. This is a significant technical development, as it marks the first real attempt at shifting momentum in months.

• With Bitcoin itself stabilizing and showing signs of demand, MSTR remains one of the top names on our watchlist today. The key now is confirmation—we need to see the 5-minute opening range high (ORH) hold. If it does, it signals real strength and presents a high-probability trade opportunity.

UBER: Uber Technologies, Inc.

• Uber is another major weekly base we’re tracking, having been consolidating for over a year now. What’s significant here is that the stock has continued to make higher lows for months, signaling steady accumulation despite broader market volatility. Now, we’re starting to see momentum return as Uber gears up to challenge its key overhead resistance near $80.

• The best breakouts tend to emerge from stocks that have displayed relative strength over weeks and months, not just a few days. Uber fits this mold—after reclaiming its lost weekly EMAs, last week’s candle even took out the prior week's breakdown level, showing clear signs of demand. If we see high relative volume and a clean move through resistance, this could set up for a high probability and very strong multi-week breakout.