OVERVIEW
Markets Are Absorbing Noise, Not Breaking

🟨 Moderate Risk-On: QQQ continues to hold strength near highs, while MDY and IWM are digesting recent breakouts with healthy pullbacks. Leadership remains intact, but smaller caps are more sensitive to macro headlines.

📊 Broad Market Structure: Yesterday saw strong demand at key levels — QQQ held its 10-EMA with a hammer candle, MDY broke through supply on volume, and IWM tagged our $224 zone before pausing.

⚠️ Tariff Volatility Contained: Despite heavy-handed tariff threats from Trump, markets aren’t pricing in macro disruption. Intraday volatility is being bought, not sold — with only mild premarket softness showing up in mid/small caps.

MARKET ANALYSIS
Noise < Signal

This week brought a sharp escalation in global trade rhetoric, with Trump reviving tariff threats, but with a more aggressive stance:

• 35% tariff on Canada, with fentanyl cited as justification

• 50% tariff on Brazil, signaling political leverage as much as economic

• Proposed 15–20% blanket duties on remaining nations — well above the 10% markets had grown accustomed to

Despite the headlines, price is what matters, and price has stayed resilient.

Why it matters: Markets are increasingly pricing in tariffs as posturing, not policy risk, at least for now. The rally continues unless the tape says otherwise. Tariff-induced volatility has been fading by the close, suggesting large money is buying weakness rather than repositioning defensively.

📌 What to Watch:

• The close today is key and continuation of strength signals that this macro pressure is still being absorbed cleanly.

• A shift in behavior (close weak, failed breakout attempts, flight to safety in TLT/DXY/XAUUSD) would be the first sign to reassess.

🔍 Bottom line:
Until proven otherwise, the market is telling us it’s still risk-on, with tariffs just another headline, not a trend-changer.

Nasdaq

QQQ pulled back intraday yesterday, but closed strong, printing a red hammer candle off the rising 10-day EMA.

We’ve seen a notable decline in relative volume over the past week, even as price has started to contract and tighten — classic signs of a Volatility Contraction Pattern (VCP) forming.

Yesterday’s tag of the 10-EMA drew clear demand, showing that buyers are still stepping in on dips, not exiting.

📌 What to Watch: If this contraction continues to hold above the 10-EMA and base out, another run at all-time highs looks likely in the coming sessions.

The AI megacaps driving this leg of the rally — NVDA, MSFT, AVGO, etc. — are moving on fundamental secular demand, not on global trade narratives. Canadian tariffs won’t derail the NVDA-AI supercycle.

S&P 400 Midcap

After a strong red hammer candle earlier this week, MDY surged yesterday on high relative volume, breaking cleanly above the $585–$590 supply zone we flagged.

That breakout move is being faded in pre-market, largely due to renewed tariff headlines.

📌 Why the hit?
Midcaps are inherently more sensitive to geopolitical noise than megacap tech — they sit further down the risk curve and lack the secular dominance of names in QQQ. When macro risk spikes, they’re the first to flinch.

🧠 But context matters:

• This is not structural weakness, pullback to retest the rising 10-EMA would be a normal reaction.

• Nothing in the price action so far invalidates the strong demand we saw on yesterday’s breakout attempt.

Russell 2000

IWM has followed midcaps in lockstep, surging straight up off the $210 breakout and pushing yesterday into the top of the $224 supply zone we’ve flagged repeatedly over the past 1–2 weeks.

Today, we’re seeing some early profit-taking, which is both expected and healthy.

📉 Noteworthy:
This entire push has come on declining relative volume, signaling buying enthusiasm may be cooling short term. That doesn’t mean the move is invalid — it just raises the odds of consolidation here.

📌 What to Watch:

• A pause or pullback from $224 wouldn’t be a red flag as it would be structurally constructive, especially if we see buyers defend higher lows.

• As with MDY, keep your eye on the rising 10-EMA, it’s the key guide for whether strength is being absorbed or breaking down.

🔍 Bottom line: IWM did exactly what it was supposed to do. Now let’s see if it can build a new base for the next leg.

FOCUSED STOCK
LUNR: Ready For Lift-Off?

LUNR has been on our radar for weeks, riding the relative strength of the Aerospace & Defense group (XAR).

Since the March selloff, it’s been quietly building a cup-and-handle pattern, carving out higher lows over the past several weeks.

Now we’re seeing fresh momentum in pre-market, with price pushing above the descending trendline around $11.

Next stop? The point of control (POC) sits at $12, which also lines up with a dense supply zone — a potential resistance area on first test.

📌 What to Watch: If LUNR can push through $12 with volume, it may trigger a larger breakout from the base. But if you're looking to enter today, be mindful of potential resistance at POC — the stock may need to consolidate before a clean move higher.

ADVERTISEMENT - The Oxford Club
The Real Winners of The AI Boom May Surprise You…

AI is growing 10X every six months, says Elon Musk — and it’s putting massive pressure on the U.S. power grid.

Even Trump admits: “We have to produce massive electricity that we don’t have.”

The solution? A surprising energy breakthrough now backed by Big Tech.

Three American companies are leading the charge — and early investors could benefit big.

👉 See the 3 energy stocks poised to surge

FOCUSED GROUP
XBI: Biotechs Making A Move

Biotechs (XBI) have been lagging since the April 2025 rally, underperforming relative to most sectors.

However, that trend may be shifting — XBI just reclaimed its 200-day EMA for the first time since the Q1 correction.

Price is now hovering just above $88, a key level based on the Visible Range Volume Profile (VRVP). This zone marks a potential low-volume pocket up to $92.

The move through the 200 EMA is notable, but what stood out even more was yesterday’s candle, which sustained above the 200 EMA with a clean intraday retest — a signal of strength, not noise.

📌 What to Watch: If XBI can hold above $88 and push into the low-volume zone, it opens the door for a momentum move toward $92. Keep an eye on leading biotech names that may start rotating back into favor.