NEWS
Abu Dhabi Bets Big on U.S. Gas Boom Amid Trump’s Export Push

In a major energy move, Abu Dhabi is deepening its footprint in the U.S. shale gas sector — and it’s all about timing.

Mubadala Energy, the investment arm of Abu Dhabi’s sovereign wealth fund, has acquired a 24.1% stake in Kimmeridge’s shale gas operations in Texas, along with a share in its Commonwealth LNG export terminal in Louisiana. The deal, reportedly worth hundreds of millions, comes on the heels of the Trump administration lifting a freeze on LNG export permits, signaling a renewed push to "unleash American energy."

The UAE’s investment underscores rising confidence in a U.S. gas resurgence. Trump’s policy shift is reshaping global energy dynamics, and Gulf nations — traditionally exporters themselves — are looking to strategically tap into the U.S. supply chain as the world’s largest LNG exporter aims to double down on global market share.

Mubadala calls this a “strategic play” in a region expected to supply a third of global LNG by 2050. Their stake in the Eagle Ford shale basin adds immediate production power — currently around 500 million cubic feet per day, with plans to triple output by 2031.

The LNG terminal could be operational by 2029, pending a final investment decision this year — just in time to capitalize on expected global demand spikes.

With a broader $1.4 trillion UAE investment framework in the U.S., this is more than a one-off bet — it's part of a larger energy and diplomacy strategy taking shape under Trump’s second term.

MARKET
Today Could Get Interesting…

This morning, tensions between the world’s two largest economies intensified as China raised tariffs on U.S. goods to 125%. In retaliation, China dismissed the potential impact of any further American tariffs, calling them a "joke" and making it clear they wouldn’t back down. This latest escalation adds to the ongoing trade war, which has already been shaking financial markets and drawing global attention.

Beyond this known volatility trigger, we find ourselves in an extremely fragile market environment. It only takes one headline to throw off any technical analysis, making it a challenging time to navigate with certainty.

Nasdaq

The Nasdaq is setting up an interesting technical formation on the daily chart, especially after Wednesday’s euphoric push into a known supply level, which resulted in a near-term rejection. Yesterday’s session showed signs of a potential second attempt, as the QQQ appears to be gearing up to test the $465 overhead supply once again.

A red hammer candle formed yesterday after the QQQ retraced intraday to its point of control (POC), where it found strong buying pressure. This aggressive response from buyers pushed the QQQ back into the upper part of its intraday range, forming a long tail below. This indicates that buyers stepped in to defend against a breakdown, which is generally seen as a short-term bullish signal.

However, there’s an important consideration with the price-to-volume profile (we’ll dive deeper into this shortly). Specifically, we’ve seen lower relative volume over the past week as the price has moved higher, which creates a bearish divergence. This is a sign that the recent upward movement may lack conviction.

S&P Midcap 400

The midcaps (MDY) are displaying a similar pattern to the Nasdaq, but with a much more exaggerated price-to-volume divergence. Like the Nasdaq, we saw a hammer candle form, indicating demand stepping in at the lower levels tested. However, the MDY faces more significant overhead supply compared to the Nasdaq, which could make it more challenging for the index to break through in the short term.

While we wouldn’t be surprised to see the declining 10 EMA on the daily chart tested, the MDY is dealing with more substantial resistance overhead, making it potentially more susceptible to rejection.

Russell 2000

The small caps are following a similar volatility contraction pattern (VCP) to both the QQQ and MDY, indicating that all major groups are moving in tandem. If we were to see a technical bounce here, it would likely be a broad market-wide move with high participation across various capitalization levels and sectors. The IWM, in particular, has shown strong demand at the $181.91 level, forming a red hammer candle, which suggests there could be a potential move to test the declining 10 EMA on the daily chart.

Across all indices, we’re seeing a low-volume pocket directly above current levels, leading into the next supply zone. This is significant because if price pushes into this zone, it typically has a high probability of moving sharply through the low-volume pocket, as there is less resistance.

For day traders looking to capitalize on supply and demand dynamics, this is a potential opportunity to play the move through the low-volume zone. However, for swing traders who rely more heavily on trends, we are not yet at a point where aggressive long exposure would be warranted, as the broader trend still remains very uncertain.

DAILY FOCUS
Price X Volume – The Only True Indicator

When evaluating a stock or even a market’s potential bottom, the most reliable indicators are price action and volume. These two factors often provide the clearest signals of a reversal. A stock typically bottoms when there is a significant reduction in selling pressure, as the supply of shares begins to dry up.

At first glance, this concept may seem overly simple, but it’s grounded in market dynamics: when selling subsides, buyers who see value in the stock begin to step in. As demand increases with fewer sellers, the price can start to rise, signaling that the stock has likely reached its lowest point.

Volume plays a crucial role here—it’s not just about the price moving in the right direction; it’s about the strength behind that move. Higher volume during a price recovery provides validation to the move, suggesting that the price trend is sustainable. Stocks move based on the principle of supply and demand, and volume is the key to understanding how strong the demand is in comparison to the remaining supply.

Let’s use a unique example to clarify this: imagine Company X, a tech stock, has been on a steady decline over the past few months. It’s trading an average of 1 million shares a day and has fallen 40%. Over the last three days, the volume spikes to 4 million shares, while the stock price begins to trend upward. This sharp increase in volume suggests that there’s a noticeable shift—fewer sellers are willing to sell at these lower levels, and buyers are now coming in, anticipating a rebound.

If Company X were to continue this pattern, with high volume supporting price gains, it could signal that the stock is entering a new phase of accumulation and could see further upward momentum. A key point to note is that the shift in volume and price direction indicates a change in market sentiment: what was once a stock in decline is now experiencing increased demand, which often leads to a strong price reversal.

Real World Example: A Healthy Uptrend

Let’s take a look at SMCI in 2024, during one of its most significant rallies. You’ll notice that both price and volume moved in tandem throughout the move. When the stock was pushing higher and rallying, volume increased alongside the price, indicating more and more participation as the stock rose.

When the stock pulled back, volume also retraced in line with the price decline. This demonstrates a healthy price correction, where both price and volume are retracing together. Then, when the stock broke out again, you saw price and volume rise in sync once more, confirming the breakout.

This is textbook behavior: price and volume should move in harmony, and when they do, it signals strong participation and confirmation of the trend.

Real World Example: An Unhealthy Uptrend

The relationship between price and volume is a fundamental principle that applies across all timeframes—whether you’re analyzing intraday price action or the broader primary trend. At its core, it's a direct reflection of supply and demand dynamics.

In late 2024, within Swingly Pro, we highlighted a clear divergence that had been taking shape throughout 2023-2024, particularly when observing the monthly chart of the SPY. During this period, despite the SPY pushing higher, we saw volume consistently drying up in a linear fashion. This is a classic warning signal.

To understand this, think of volume as a barometer for market participation. When price rises, but volume fails to increase or begins to decline, it signifies that the buying interest is fading. Essentially, the demand for the asset is weakening. Fewer buyers are willing to push the price higher, even as the market continues to test new highs. This lack of participation often precedes an exhaustion phase, where the trend loses steam and a reversal or significant pullback becomes more probable.

This divergence is critical because it speaks directly to market psychology: the market is becoming more complacent. As fewer participants enter the rally, it becomes more vulnerable to a shift in sentiment. If the broader market sentiment flips—whether due to external factors or internal weakness—this kind of volume behavior can accelerate the decline, leading to a sharp move lower.

This is exactly what we observed last month: a high relative volume breakdown on the monthly candle, which has brought us to the current market condition.

WATCHLIST
A Few Of The Top Relative Strength Names

MSTR: MicroStrategy Incorporated

• MicroStrategy (MSTR) serves as a proxy for exposure to the Bitcoin market, given its substantial Bitcoin holdings, making it inherently more volatile compared to traditional equities. In addition to this, MSTR has recently shown signs of relative strength, mirroring the patterns seen in BTCUSD, which exhibits a very similar chart structure.

• What stands out about MSTR is that, despite the broader equities market breakdown, it has not made new lows over the past month. This is noteworthy because MSTR has held its ground during a period when many stocks have been under intense selling pressure. Even more significantly, it has consistently found demand whenever tested at its rising 50-week EMA, signaling that buyers are still active at these levels.

• This week, however, both MSTR and BTCUSD have faced some resistance and have lagged behind other assets. MSTR has been rejected at overhead supply near its declining 10 and 20-EMA, which could indicate a potential breakdown. But this price action is also a great example of what to look for during a bearish period: you're not necessarily looking for stocks that are immediately breaking higher, but rather for stocks that are defending their key levels and demonstrating linearity in their behavior over time.

PLTR: Palantir Technologies Inc.

• PLTR is another great example of relative strength, and the current weekly candle is a significant indicator of demand stepping in. What's important to note here is the exceptionally high relative volume that has already surfaced, confirming the price action.

• This weekly candle has fully retraced all the losses from PLTR's breakdown, which is particularly notable since this occurred while both the CIBR industry and the broader equities market were breaking down.

• This type of price action signals that, despite broader market weakness, PLTR has found strong demand at lower levels, and the buyers are stepping in with force. The high volume reinforces that there’s genuine participation in the stock, increasing the likelihood that this reversal will hold and the stock is looking to go higher, not lower.