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Trump’s Tariffs Strike Again..

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 VRVP Daily Chart

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

MDY VRVP Daily Chart

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 VRVP Daily Chart

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 VRVP Daily Chart

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.

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FOCUSED GROUP
XBI: Biotechs Making A Move

XBI VRVP Daily Chart

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.

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