MARKET ANALYSIS
Here’s What You Need To Know

• Markets showed a surprising amount of resilience and strength this week, with equities rebounding despite elevated geopolitical noise and macro uncertainty.

• The relief rally was driven by de-escalation headlines, but the magnitude of the bounce relative to recent volatility was notable.

• Futures pulling back modestly after two strong sessions aligns with the choppy, mean-reverting structure we are seeing across indices rather than a clean trend regime.

• Tech sentiment was pressured by Intel’s weak guidance, highlighting that AI and megacap leadership remains selective, not broad-based even though we have seen a lot og strength in the semiconductor space. The rally is still being carried by a narrow subset of names even in the leading groups.

• Flow data showed capital rotating out of U.S. equities during the tariff escalation, with inflows into Europe and Japan. This supports a rotation and diversification narrative, not a wholesale risk-off liquidation.

• Oil firming on renewed Middle East risk introduces upside inflation tail risk, which the equity market is currently treating as secondary.

• Near-term macro data (PMIs) is unlikely to shift rate expectations ahead of the Fed meeting, meaning geopolitics and flows remain the dominant drivers, not monetary policy.

• We expect to see some chop today though we are impressed with the last few sessions of price action all things considered with demand showing up.

Nasdaq

51.96%: over 20 EMA | 55.88%: over 50 EMA | 58.82%: over 200 EMA

• Starting with the NASDAQ via QQQ, yesterday was a notably low-volume session, with volume at 77% of the 20-day average. That is roughly half the relative volume seen on Tuesday and Wednesday and marks the lowest volume since January 12th.

• Price initially pushed lower and briefly undercut the reclaimed 10- and 20-day moving averages, but ultimately reversed higher, printing a red hammer candle that found support at the point of control around 620.

• Overhead supply remains dense up to roughly 629, aligned with the January 15th reversal zone. This represents approximately 1.19% of overhead supply, and we are not expecting that zone to be cleared in a single impulsive move.

• The key structural level is the 50-day EMA at 615.56, which has now been reclaimed. Historically, the NASDAQ tends to chop above the 50-day EMA during uptrends, and this level also aligns with last week’s lows.

• On the weekly chart, the recent sell-off into January 20th–21st found support precisely at the rising 20-week EMA. From an intermediate perspective, the NASDAQ is finding demand where it should.

• Relative volume has been cooling since the November 17th peak as price consolidates, consistent with a volatility contraction pattern on the intermediate trend.

• The primary issue for traders is regime mismatch: attempting to trend trade in a range environment, rather than adapting to mean-reversion and rotational behavior.

S&P 400 Midcap

72.11%: over 20 EMA | 75.37%: over 50 EMA | 69.34%: over 200 EMA

• Mid-caps experienced a modest mean reversion session, with 108% relative volume following a roughly 0.7% gap higher attempt. Price faded from the highs, and profit-taking was evident.

• At 645, approximately 210,000 shares traded red versus 127,000 shares traded green, with even heavier selling above 646, where 33,000 shares traded red versus 10,000 green.

• This confirms meaningful supply and profit-taking near recent highs. Mid-caps remain leaders on a relative basis but are extended, and historically they do not move in a straight line for more than two to three weeks without a consolidation phase.

Russell 2000

74.30%: over 20 EMA | 73.89%: over 50 EMA | 70.07%: over 200 EMA

• Small-caps continue to accelerate relative to mid-caps, but yesterday printed a gravestone doji, which we are treating as an exhaustion candle.

• IWM is currently extended at roughly 5.77 ATR multiples above the 50-day moving average. Anything above 5 ATR multiples tends to become unstable, and we expect near-term consolidation or pullback.

• This should not be interpreted as a crash scenario, but rather as a normalization of extension

FOCUSED STOCK
OUST: Small Cap Semiconductors Pushing

ADR%: 6.60% | Off 52-week high: -34.6% | Above 52-week low: +329.7%

• OUST remains a key focus name. It has a 6.6% ADR and is showing constructive semiconductor-related strength outside the mega-cap cohort.

• The stock formed a double bottom on November 17th and the week of December 29th, bouncing off the rising 50-week moving average (200-day EMA on the daily).

• It has since spent three weeks contracting below the 200-week EMA after a failed breakout attempt on January 9th. Relative volume is now expanding as price pushes higher, while price remains in contraction below the 200-week EMA.

• Structurally, this is consistent with continuation behavior. OUST is in a new stage-two advance following a two-year base that extended from February 21st, 2023 to May 27th, 2025, and remains one of the highest-priority names to track for continuation setups.