OVERVIEW
Risk Is Still On (Cautiously)

Breadth improving: QQQ continues to show tremendous strength, pushing toward the $600 level after validating demand at $584.

Small caps alive: IWM ripped into $245, forming a bull flag and confirming risk appetite is broadening.

Sector rotation: Industrials (XLI) tightening in a multi-month contraction, respecting the weekly 10EMA — a potential breakout group if low-rate narrative persists.

Focused stock: SNOW defended its weekly 10EMA ($214) with volume, now flagging on the hourly — a high-quality pullback setup.

Risk note: Triple witching today could inject volatility — avoid chasing stretched names into expiry.

MARKET ANALYSIS
The Price Action Looks Very Strong!

Stocks are heading into Friday looking strong, with major indexes at record highs after a Fed-driven rally this week. Gains were broad on Thursday, with the Russell 2000 surging 2.5% to notch its first record since 2021 and a sign small caps are catching up, not just Big Tech. As NYU’s Aswath Damodaran put it, “It’s collectively all stocks” fueling this move.

That said, yesterday’s late fade showed some nerves, and today brings triple witching (when stock options, index options, and futures all expire together). These events can inject extra volatility into an otherwise steady market.

Overall, things look great: the Fed’s first rate cut of the year is behind us, expectations for more easing remain, and investors are leaning on earnings strength as a backstop. But with options expirations in play, don’t be surprised if trading gets choppy into the weekend.

Nasdaq

% over 20 EMA: 54.45% | % over 50 EMA: 48.51% | % over 200 EMA: 59.40%

The QQQ continues to display tremendous relative strength. The dip into the $584 demand zone two sessions ago proved to be an incredibly powerful show of buyer conviction, validating the exact demand zone we highlighted earlier in the week.

Yesterday, we pushed higher by gapping above $597 at the open and inching closer to the psychological $600 level. From there, price action turned into a six-hour low-volume fade on the hourly chart, with price riding down into the hourly 10EMA.

What mattered wasn’t the fade but it was that the final hour closed on elevated relative volume, confirming real demand at that intraday support.

This morning, futures are showing another gap up into the open. While this confirms the Nasdaq’s continued leadership, today requires caution. Chasing extended moves into triple witching is not ideal risk/reward especially given too many stocks are already stretched euphorically.

Levels to watch:

• Hourly 10EMA ($595) → first line of defense. We suspect this may not hold on weakness (also a dense volume cluster shown on the VRVP)

• Below that: $591.25 → fills yesterday’s open gap and retests the breakout level established Monday.

S&P 400 Midcap

% over 20 EMA: 52.38% | % over 50 EMA: 62.15% | % over 200 EMA: 61.65%

The midcaps are quietly setting up something powerful. MDY has spent the past two weeks consolidating tightly against overhead supply near $605, a level that has repeatedly capped price since September 5th. This type of coiling just below resistance often precedes a sharp resolution.

Yesterday gave us a clue as the inside-day breakout attempt came on 142% of its 20-day average volume, showing real interest building beneath the surface.

That said, it’s important to recognize what this is not (yet): a confirmed breakout. We’re still pressing against supply, and with triple witching in play today, volatility risk remains elevated.

If upside fails: the worst-case short-term scenario would be a pullback toward $596, which lines up with the next clear demand zone. That would represent about a –1.65% retracement and coincide with a test of the hourly 200EMA.

If we get that dip, we’d view it as a high-probability buy opportunity given the underlying structural strength.

Russell 2000

% over 20 EMA: 69.40% | % over 50 EMA: 72.62% | % over 200 EMA: 65.29%

The small caps remain choppier and more erratic than the other indices, but the underlying message is clear: risk appetite is alive.

Yesterday, IWM ripped higher, taking out Wednesday’s highs and pushing right into the $245 zone. Relative volume came in strong at 135% of its 20-day average, not as heavy as Wednesday’s 222% surge, but still showing solid participation.

On the hourly chart, we’re seeing a clean contraction forming right under $245, which resembles a bull flag setup. If momentum resolves higher, this could extend the move, confirming that broad-based strength is no longer confined to mega-caps or midcaps.

Beyond this, there isn’t much more to overanalyze in the short term. The broader base of strength is presenting itself across the market, and now it’s about validation into the weekend.

FOCUSED STOCK
SNOW: A Strong Pullback Buy

ADR%: 3.29% | Off 52-week high: -11.2% | Above 52-week low: +104.3%

One of the key names on our radar today is Snowflake (SNOW). For those following different frameworks, this one is a classic case:

• Stage 2 uptrend for the Stan Weinstein disciples.

• Markup phase for the Wyckoff followers.

After breaking higher earlier this year, SNOW just put in a perfect test of its rising weekly 10EMA at $214.

That level aligned with both the daily 20EMA and the hourly 200EMA, and buyers stepped in with high relative volume whihc is the expected sign of demand respecting structure.

From that bounce, SNOW is now forming a bull flag on the hourly timeframe. This type of setup is our favorite:

• Pullback entries offer far more favorable risk/reward than chasing breakouts.

• Breakouts demand immediate buying pressure post-entry, while pullback buys give you a cushion as you’re entering where institutions are quietly accumulating.

FOCUSED GROUP
XLI: The Next Big Group Breakout

Industrials are starting to look very interesting here. From a macro perspective, this group typically thrives when the market senses a low-rate environment coming.

This is often because cheaper capital and improving growth expectations feed directly into industrial activity e.g. think construction, manufacturing, transport.

It’s no coincidence that industrials often correlate closely with the Russell 2000, which has a heavy industrial weighting and tends to move as a proxy for U.S. domestic growth.

Technically, the structure here is very tight. XLI has been in a multi-month contraction, stretching back to July 2025, with price refusing to break down even when broader markets wobbled. That type of compression builds energy.

What’s been more impressive is how well the weekly 10EMA has been respected over the past three weeks. Each touchpoint brought buyers back in and pushed XLI higher. That’s institutional behavior- defending structure, accumulating on weakness, and positioning for a potential expansion.

Q&A
Got a trading question? Hit reply and ask!

Q: “I bought RGTI when you guys mentioned it and now it’s gone straight up. How do you know when to sell? I’m scared it’s all going to just crash now…”

A: First off… congratulations!! 👏 

Not only did you catch the move in RGTI, but you also positioned yourself in the strongest growth group in the market: quantum computing.

This is a great example of why you want to fish where institutional money is piling in.

Now, onto your question, selling.

🔑 Scaling Out Into Strength

One of the best ways to manage a fast winner is to take partial profits while the stock is strong. Scaling some at e.g. 2-3R (risk multiples) or on a fixed time interval (like trimming ⅓ by day 3) won’t capture every top, but it smooths your equity curve and helps you avoid the emotional pain of watching a +40% winner round-trip back to breakeven.

🔑 The Five Outcomes Framework

Every swing trade resolves into one of only five buckets:

1. Big Loss (avoidable by risking <1% of capital per trade)

2. Small Loss (~50%+ of trades for most momentum systems)

3. Breakeven (scratch trades)

4. Small Win (partials locked early)

5. Big Win (the trades that make the year)

The math is clear: momentum strategies typically win <50% of the time. The edge comes from cutting the left tail (no big losses) and funding your account with enough small wins until the big outliers arrive.

🔑 Trailing to Capture the Outlier

Once you’ve scaled out, the rest of the position becomes a “free trade.” This is where the real money is made. Remember: your downside is capped (stop-loss), but the upside is unlimited if a stock keeps trending.

That’s why most traders lean on objective trailing tools like the 10EMA or 21EMA. These moving averages adapt to the stock’s own rhythm, letting you stay in the trend as long as it’s healthy.

Without them, most traders cut winners too early and miss the rare fat-tail moves and the outliers that make up the majority of a swing trader’s yearly profits.

Which EMA you trail with depends on the stock itself.

• A strong institutional growth leader that grinds higher in an orderly fashion often respects the 20EMA. Trailing too tightly with the 10EMA would risk shaking you out of a perfectly healthy trend.

• On the flip side, fast-moving small-cap momentum names with extreme volatility (say 10–15% ADR) don’t give you that luxury. If you use the 20EMA there, you could give back a huge chunk of open gains before the stop triggers. In those cases, the 10EMA is often the better leash.

The key isn’t forcing every stock into one system, but it’s about matching the tool to the personality of the trade.

👉 If this helped, just know it’s only the surface. Inside Swingly PRO, we trade as a team by meeting each week, sharing resources, and breaking down trades together.

That’s where we go much deeper into the playbook: which moving averages fit different market regimes, how to size across 20+ trades, and how to systemize exits so you’re never left guessing.

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