OVERVIEW
What You Need To Know

• Momentum still leads: Tech and small caps remain the primary engines of this rally. Despite “extension” fears, breadth data continues to strengthen — this isn’t exhaustion, it’s sustained momentum.

• Macro backdrop: Rate cut expectations and ongoing AI optimism continue to fuel risk appetite. The government shutdown delays key data, but markets don’t seem to care — liquidity remains dominant.

• Rotation watch: Small caps (IWM) are digesting gains constructively while midcaps (MDY) remain trapped under supply. Large-cap tech still carries leadership torque.

• Gold & Bitcoin at highs: The breakout in alternative assets reflects both risk-on behavior and demand for hedges — a sign of confidence, not fear.

• Focused setups: NVDA offers a textbook pullback long; QTUM shows why volume + structure = leadership.

• Mindset check: Stop trying to short a freight train. Extension ≠ exhaustion. Strong markets correct through time, not price — and right now, the evidence still favors higher.

MARKET ANALYSIS
Calm Headlines, Relentless Trend

• U.S. markets head into Tuesday with momentum from last week’s record highs, but macro uncertainty is in focus.

• Optimism around AI deals and potential Fed rate cuts has driven tech and small-cap strength, yet the ongoing government shutdown continues to cloud the economic outlook.

• Key releases, including the September jobs report and upcoming inflation data, may be delayed, leaving the path of interest rates less clear.

• Gold and Bitcoin recently hit all-time highs, signaling elevated risk appetite and hedging demand amid policy uncertainty.

• Small-cap momentum suggests rotation opportunities beyond mega-cap tech (still the leaders), but concentration risk is rising, making careful exposure management important.

Nasdaq

% over 20 EMA: 60.39% | % over 50 EMA: 57.42% | % over 200 EMA: 62.37%

• Despite QQQ looking quiet on the surface, the real strength lies underneath as the leadership components inside the Nasdaq (especially the Magnificent Seven) continue to power higher.

• On QQQ itself, volume has been declining at highs, signaling compression and typically, falling volume into highs might warn of exhaustion, but the continued strength in names like NVDA, META, and MSFT shows buyers are there.

• Expect this consolidation to resolve up, not down. Momentum remains concentrated, and the Nasdaq remains the undisputed leadership engine of this market.

S&P 400 Midcap

% over 20 EMA: 49.87% | % over 50 EMA: 53.36% | % over 200 EMA: 61.59%

• MDY remains pinned beneath the $605–607 supply band on a zone that has repeatedly rejected price since mid-August. The index is rangebound, coiling but unable to establish directional control.

• The VRVP shows a thick cluster of green volume at these highs and evidence of trapped buyers from prior breakout attempts. Every retest into that zone finds overhead supply as those participants exit at breakeven.

• Demand is still showing up along the rising 10-EMA, confirming underlying strength, but not conviction. Buyers are defending support; they’re not chasing.

• This is a market segment in compression, not expansion. Until we see decisive absorption through $607 on strong relative volume, midcaps remain a non-leadership group, constructive, but not where high-probability asymmetry sits right now as the momentum is weak.

Russell 2000

% over 20 EMA: 45.21% | % over 50 EMA: 55.08% | % over 200 EMA: 59.61%

• IWM is consolidating just beneath recent highs after a powerful breakout last week — clear evidence of strength, not exhaustion.

• Yesterday’s doji formed precisely at a dense VRVP cluster around $246, which served as resistance back in mid-September. That zone has now flipped into short-term support, confirming healthy price acceptance.

• Compared to midcaps, small caps are objectively stronger and are showing sustained momentum and better follow-through since late September.

• Continued sideways action here would be ideal, allowing the market to absorb supply and validate this new range before making another leg higher.

FOCUSED STOCK
NVDA: A Great Pullback Long

ADR%: 2.59% | Off 52-week high: -2.9% | Above 52-week low: +114.2%

• NVDA pulled back yesterday right into a major prior supply zone around $184, which had acted as resistance through most of August and September.

• That same level now aligns perfectly with the rising daily 10-EMA — turning former resistance into new support.

• This is classic constructive behavior: price breaks out, retests the breakout zone, and finds immediate demand.

• Volume stayed moderate on the pullback, suggesting no meaningful supply dump, just digestion after a strong run.

For those already long: this is an ideal add-on zone to compound exposure into strength.

For those flat: it’s a high-quality pullback long and a chance to get positioned in the market’s leading AI name at trend support, not chasing highs.

FOCUSED GROUP
QTUM: Why Relative Volume Is Everything

• QTUM has been one of the cleanest momentum trends since early September, with a near-linear rise and tight pullbacks.

• In late September, price and volume both contracted sharply, forming a perfect secondary VCP (Volatility Contraction Pattern).

• That setup resolved exactly as it should: record-breaking volume as QTUM and the broader quantum group exploded higher.

• This move isn’t about chasing today, it’s about what leadership looks like: tight, orderly bases + explosive breakouts on volume.

• The best entries were early September (initial breakout) and late September (VCP add point).

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

Q: “The market’s been rallying for months now and we’re so clearly extended, but I can’t seem to gain traction shorting?”

Why is it extended?

Does the fact we have been in an uptrend for months mean things have to sell off tomorrow?

Because our equity curve which keeps hitting new highs on our long positions, tells us otherwise.

The chart above shows Net New Highs vs. Net New Lows, one of the cleanest breadth indicators you can track.

As you can see, it’s been trending steadily higher for months, meaning more stocks are breaking out to new highs than breaking down to new lows.

That’s not really what topping markets do, that’s what healthy bull markets do.

The word “extended” gets thrown around a lot, usually by traders who think they’ve spotted the top. But the truth is, calling a top in a strong market is one of the hardest games you can play.

Even if you see a double top, head-and-shoulders, or a perfect bearish divergence, it’s all just theory until the market confirms it by breaking down with real selling pressure.

Think about the statement you’re making when you enter a short position on a day the market’s up.

You’re saying, “I know more than the collective force of global liquidity currently bidding stocks higher.”

That’s what makes shorting strong trends so dangerous as timing has to be perfect, and most traders run out of capital or conviction before they’re right.

The most objective way to gauge whether this market is “due” for a pullback isn’t staring at the index, it’s studying the behavior of the leaders:

• Are they starting to break below key EMAs?

• Are failed breakouts clustering?

• Are you seeing distribution e.g. heavy volume on down days?

• Are you seeing defensive sectors leading whilst high growth groups fail?

• Is there a volume x price divergence (is price pushing on low volume)?

If the answer is no, then you’re not in a topping market, you’re in a very strong trending one which you should be long in and trailing the strength.

And this is where experience comes in. You can’t see that shift without screen time. You have to actually watch how money rotates and how the leaders behave at highs, how pullbacks are bought or ignored, how volume reacts.

That’s not really something a headline can tell you.

Momentum will stay extended far longer than you or your conviction can stay solvent.

In Swingly Pro, we talk about how to build these exact systems so no member has to guess. We all know exactly when the market is ours to attack, and when it’s time to step aside and raise cash.

This is the power of trading alongside a team → see what’s included