OVERVIEW
🟢 Risk-On: Rotation + Breadth = Constructive Tape

NVDA held the line. Earnings cleared the bar, and the stock’s recovery erased after-hours weakness — a critical signal that AI leadership remains intact.

Macro supports the tape. GDP revised higher (+3.3% Q2), jobless claims edged lower, and September rate cut expectations are firm. The “soft landing” narrative is alive.

Rotation driving leadership. While mega-cap tech remains sloppy, capital is flowing smoothly into mid- and small-caps, keeping breadth robust.

Energy joins the mix. XLE, OIH, and XES are all breaking multi-month bases with dollar headwinds easing — a powerful sector-level confirmation.

MARKET ANALYSIS
The Technicals Look Strong

Nvidia’s earnings cleared the bar, and the feared cracks in the AI story didn’t show up. While data center sales were softer than expected, management emphasized still-extraordinary demand for Blackwell chips, with China highlighted as a multibillion-dollar growth opportunity. The stock initially dipped, but the recovery erased nearly all of the weakness — exactly what you want to see if AI leadership is intact.

Bigger picture, the tape still looks like digestion rather than topping. Mega-caps remain sloppy, but there’s no evidence of systemic breakdown. Rotation into mid- and small-caps continues to absorb capital smoothly, keeping breadth trends firm.

On the macro side, yesterday’s data supported the soft-landing narrative:

• GDP was revised up to +3.3% in Q2, a rebound from the Q1 dip, with consumer spending holding strong.

• Jobless claims edged lower, keeping labor conditions tight.

• Rate cut expectations for September remain intact, and equities are trading as if easing is already being priced into the risk curve.

Key takeaway:

• The AI bellwether held.

• The economy isn’t rolling over.

• Breadth is broadening.

Nasdaq

% over 20 EMA: 56.43% | % over 50 EMA: 51.48% | % over 200 EMA: 61.38%

The Nasdaq is holding steady in premarket right on the $574 pivot we’ve flagged repeatedly. This zone is the fulcrum: above it sits an expected +3.6% measured move toward the top of the ascending broadening wedge, while a breakdown carries about -2% downside risk back to the $562 point of control (POC).

NVDA, which dictates >10% of QQQ, has already recovered nearly all of yesterday’s after-hours weakness.

Yesterday’s intraday action saw a high relative-volume bounce off the 10-EMA, showing demand stepped in quickly after an undercut.

Bearish risk:

• A decisive break under $570 on heavy volume opens the door for a retest of the $562 POC (last defended on August 19).

• Breadth remains notably weaker here than in mid/small caps — the Nasdaq continues to trade as a single-stock proxy for NVDA and a handful of mega-caps.

Our Approach:
This is not a broad Nasdaq trade; it’s an NVDA trade expressed through the index. If NVDA continues to stabilize and build on strength (with a high rel volume breakout over $183-$184), the QQQ has room for a squeeze higher through $574. If it fails, the downside path is just as clean and can be profited from just as easily.

S&P 400 Midcap

% over 20 EMA: 81.50% | % over 50 EMA: 73.00% | % over 200 EMA: 62.75%

Yesterday’s breakout came on 223% of average 20-day volume which shows a classic expansion following two inside days of tight, low-volume contraction. That is exactly the sequencing we look for: absorption, contraction, then an explosive release of energy.

Short covering dynamic: Positioning data and the tape both suggest systematic short-covering is fueling part of this breakout. That adds fuel to the momentum trade and helps explain why breadth here is so much stronger than in the Nasdaq.

Structural rotation: Institutions are actively rotating down the risk curve, and midcaps are absorbing that flow. Unlike crowded mega-cap tech, this segment has a far more balanced participation profile.

Breadth confirmation: With over 80% of MDY components above their 20-day EMA, the rally is clearly broad-based and structurally healthier.

Where we’re looking for longs:
This is the segment where swing traders have the highest probability of finding clean setups. Within midcaps, we’re particularly focused on:

• AI-linked groups (e.g., QTUM components).

• Consumer Discretionary (XLY) and Retail (XRT), both of which are showing powerful technical rotations.

Russell 2000

% over 20 EMA: 82.11% | % over 50 EMA: 72.84% | % over 200 EMA: 61.13%

The small caps remain the leadership segment in this tape, with breadth metrics confirming their strength with over 80% of components sit above the 20-day EMA versus just ~50% for Nasdaq. From a pure price action standpoint, IWM continues to push higher cleanly following its recent breakout.

That said, yesterday’s move came without the same high relative volume surge that powered the MDY breakout, meaning the tape here is a little “weaker” but also more prone to short-term chop.

Points to note:

Not yet extended: IWM is not flashing “danger zone” extension yet (ATR% multiples remain below the 5x threshold we use as a stretch marker). Still, the further price drifts away from the rising EMAs, the lower the probability new entries will carry edge. Best swing entries always come from controlled pullbacks into rising averages.

Gap risk: Yesterday’s gap-up is exactly the kind of move that can lull traders into chasing exposure. If that first 30 minutes fails, it often sets up a reversal. Discipline here means waiting for the open to settle before committing fresh risk.

Leadership context: While MDY delivered a volume-confirmed breakout, IWM’s rally still makes small caps the clearer leadership group. This is where we continue to scan for leading components offering asymmetric long setups.

🧠 Mindset Check: Liquidity Pivots & Market Structure

Markets rarely trend smoothly. They oscillate around structural pivots, which emerge where positioning, liquidity, and volatility converge. These are price zones where the market’s supply-demand equilibrium shifts.

What makes them critical isn’t the line itself but the behaviour when price interacts with it.

Does liquidity absorb and reverse the move, or does it release and accelerate? That distinction is what reveals whether institutions are distributing or accumulating.

Why pivots matter in expectancy math

Liquidity concentration

• Institutions execute size at pivots because that’s where order book depth exists. Flow can be absorbed or distributed without blowing through the tape.

• This is why volume profiles cluster at these levels and why they so often coincide with anchored VWAPs, control points, or EMA convergence.

Volatility regimes

• ATR expansions almost always start at pivots. A volatility contraction into a structural zone has >60% probability (Bulkowski, proprietary studies) of resolving into a sustained directional move.

• This makes pivots the highest R/R entry points: risk is capped to zone depth, upside is convex if regime shifts follow.

Behavioural asymmetry

• Failed breakdowns at demand = shorts trapped.

• Failed rejections at supply = longs trapped.

• These failures don’t just shift price, they reprice risk as trapped positioning unwinds.

Case study: Bitcoin $108K

• Multi-month supply at $108K capped BTC repeatedly.

• Last week, BTC retested that zone and aligned with the rising 20-week EMA.

• Instead of failing, the zone held and supply flipped to demand.

• This set up a high-probability 1–3 day momentum burst dip-buy, as positioning was forced to reprice higher while shorts scrambled to cover.

🔒 In Swingly PRO we quantify this. Members saw the BTC $108K pivot flagged as a textbook dip-buy with EMA alignment before the move.

We map these setups across equities, crypto, and sectors every day, showing:

• Where liquidity is concentrated

• Where volatility is primed to expand

• Where risk/reward asymmetry is greatest

That’s the difference between seeing “a level” and understanding when institutions are about to show their hand.

FOCUSED STOCK
COIN: Bear Flag or Hidden Accumulation?

ADR%: 4.63% | Off 52-week high: -30.5% | Above 52-week low: +116.7%

From a purely technical standpoint, Coinbase (COIN) is sitting inside what looks like a textbook bear flag. Price has been contracting under declining EMAs, and the symmetry of lower highs with narrowing range normally resolves lower.

But context matters.

• Relative volume → Over the last 2–3 weeks, trading volume has steadily declined. That’s classic absorption behaviour: sellers are pressing, but less aggressively, while buyers are quietly defending.

• Demand zone → The stock is holding around $302, which coincides with the 20-week EMA. Importantly, this level was a major supply zone earlier in 2025, but is now acting as demand and a typical character shift in Wyckoff terms.

• Thematic tailwind → COIN sits at the intersection of two strong currents: the ongoing strength in crypto (BTC, ETH, SOL basing at highs) and financials (XLF pushing higher off its 10-day EMA). That dual confirmation raises the probability that COIN’s “bear flag” is less a distribution pattern and more a controlled consolidation before expansion.

Why this level matters
If $302 continues to hold and volume starts expanding on upside attempts, COIN could flip this perceived weakness into strength. The VRVP shows the $302–$313 band as a high-volume node; clearing above $315 opens a low-resistance pocket where price could accelerate quickly up to the $350 level where we see the next most dense volume cluster on the VRVP.

FOCUSED GROUP
XLE: A Multi-Sector Convergence Play

Energy has quietly become one of the most compelling structural setups in the market.

Macro backdrop

Historically, easing cycles tend to support dollar-denominated commodities like oil, as lower U.S. rates often pressure the dollar.

A weaker dollar makes oil cheaper for foreign buyers, which can reinforce demand and strengthen energy equities.

With rate cuts on deck and the dollar showing signs of rolling over, this macro tailwind is aligning just as energy’s technical structure improves.

Technical structure

XLE has broken a descending trendline that capped price for over seven months.

The ETF is now stabilizing above its 200-day EMA while testing through a massive volume node around $88–$89 — a critical pivot that, if flipped, opens the door for higher levels.

Importantly, this isn’t just XLE. Multiple related groups are confirming:

OIH (Oil Services): breaking out above $253 with room into lighter-volume zones as it hold over its 200 day EMA.

XES (Oil & Gas Equipment & Services): It has not yet pushed over its 200 day EMA which sits at $70 and is acting as resistance so far, however, it is consolidating over dense volume cluster on the VRVP just below $69.80

This kind of breadth and alignment across XLE, OIH, and XES give the sector one of the cleanest “character change” reads in the market right now.