MARKET ANALYSIS
Here’s All You Need To Know

• The market is again showing very clearly that it wants to look through the noise as long as the path of least resistance in the Middle East remains toward delay rather than escalation.

• Trump extending the ceasefire matters less because it solves anything immediately, and more because it removes the immediate deadline pressure that had been sitting over the tape into today.

• The market had already started to lean that way yesterday afternoon, and futures this morning are simply continuing that adjustment.

• The important point is that even with Iran still seizing vessels and refusing to fully commit to talks, equities are not trading as though participants believe we are heading into a genuine next phase of military escalation.

• Oil remains the cleanest macro barometer here.

• Crude is still elevated, but the fact it is not accelerating further despite fresh disruption in the Strait tells you the market still believes supply shock risk remains contained for now.

• That is why growth immediately finds sponsorship again the moment oil stops pressing higher.

• The second support underneath this market is earnings and we are still seeing corporate numbers come in strong enough that there is no real earnings shock forcing repricing lower.

• Boeing beating and narrowing losses this morning helps sentiment, but more broadly the message from earnings season so far is that profit resilience is still there.

• That matters because it keeps giving institutional buyers a reason to stay involved even when macro headlines turn unstable.

• What is quite striking now is how little damage sellers are managing to create even when headlines should, in theory, justify more caution.

• We had another session yesterday where geopolitical uncertainty remained elevated, oil stayed firm, and yet the pullback remained very controlled.

• That usually tells you positioning underneath is still supportive.

• Globally the same picture remains intact.

• Nikkei 225 made fresh highs again overnight, semiconductor-linked names in Europe traded strongly, and the broader risk complex is still behaving like capital wants exposure rather than protection.

• The market is effectively saying that unless oil becomes disorderly, the dominant trend remains higher and we should not try to fight that.

S&P 500

68.98%: over 20 EMA | 57.45%: over 50 EMA | 56.26%: over 200 EMA

• SPDR S&P 500 ETF Trust is now sitting roughly 3.45 ATR multiples above its 50-day moving average, so while price is elevated, it is still not in what we would classify as true technical excess.

• Yesterday’s pullback itself was very controlled, and importantly it came on only 70% relative volume, which means sellers still did not show real urgency.

• What does matter technically is the candle structure that formed.

• We now have what qualifies as an evening star formation, which in candlestick theory is one of the more statistically reliable short-term reversal patterns.

• Structurally, an evening star is a three-candle bearish reversal sequence that typically appears after an extended upside move and signals that upside momentum is beginning to weaken.

• Historically, according to bulk pattern testing, it ranks as one of the stronger reversal candles, with a roughly 72% bearish continuation probability in the Bukowski database, placing it among the highest-ranked reversal formations.

• That does not mean SPY suddenly collapses, but it does materially increase the probability of a short-term retracement after such a one-way move.

• A very normal and healthy outcome here would be a retest of the prior breakout zone around 676.61, which is roughly 1.46% lower from current levels.

• That would also bring price much closer to the rising 10-day moving average near 694, which is exactly the type of technical digestion we would want to see after roughly 15 bars of near one-directional advance across 22 sessions.

• The bigger issue remains unchanged: the rally continues without convincing volume expansion.

• That becomes more important now because once exhaustion candles begin appearing inside a low-volume advance, the probability of near-term cooling rises.

• None of this changes the larger trend, but tactically this is where caution becomes justified.

S&P 400 Midcap

82.70%: over 20 EMA | 67.16%: over 50 EMA | 63.65%: over 200 EMA

• SPDR S&P MidCap 400 ETF Trust showed much clearer exhaustion yesterday than the SPY.

• The candle itself was not a bearish engulfing candle, but it did print a relatively wide 1.75% range, which is about 0.25% larger than normal daily movement.

• Despite that wider range, relative volume remained weak at only 50% of the 20-day average.

• That tells you the exhaustion came without strong distribution pressure, which is important.

• Mid-caps were already extremely stretched internally.

• As highlighted yesterday, breadth had reached roughly 87% of stocks above the 20-day moving average, so short-term exhaustion was increasingly likely.

• The most probable technical outcome now is a pullback toward 653.41, which is the prior breakout zone.

• That represents roughly 1.8% downside, which would be entirely normal.

• There is also an open gap between 658 and 655, left from Friday’s gap higher, which adds further probability that price at least tests that area.

• Given that MDY has rallied roughly 13% over 21 trading days, some cooling here would actually strengthen the structure rather than damage it.

Russell 2000

80.48%: over 20 EMA | 71.01%: over 50 EMA | 61.75%: over 200 EMA

• iShares Russell 2000 ETF is now where the clearest short-term caution sits.

• Yesterday produced an actual bearish engulfing candle, which is more meaningful than what formed in SPY or MDY.

• Relative volume also ticked higher to 75%, which while still not heavy, is enough to make the reversal more relevant.

• Small caps have been the strongest area in the market, but that strength is now exactly why they are vulnerable to cooling.

• Over the same recent 22-session window, IWM has rallied roughly 17.4%, which is exceptionally aggressive for this segment.

• The bigger technical issue is the distance from trend support.

• Price is now roughly 2.44% above the 10-day EMA, which is substantial.

• In practical terms, that means one volatile session alone could easily close much of that gap.

• A pullback of that size would not be unusual at all.

• Especially because small caps have also rallied on the same low-volume profile seen elsewhere.

• If anything, the combination of extension, bearish candle structure, and still-unresolved macro sensitivity means IWM is the segment where near-term digestion looks most justified.

• That said, the broader trend still remains strong because open interest has also been rising, as we covered in the recent Swingly Sunday Report, which confirms that participation underneath the move has not been purely retail-driven.

FOCUSED GROUP
XSD: Semiconductors Extremely Extended

• We are now watching semiconductors very closely because this remains the true leadership engine of the market.

• SPDR S&P Semiconductor ETF currently carries roughly 89 relative strength versus the S&P 500, which is one of the strongest readings across all equity groups.

• But that strength is now becoming technically extreme and since the bounce off the 200-day EMA and 50-week moving average on March 30, the semiconductor complex has rallied roughly 44% in just 21 trading days.

• That is statistically exceptional and given that the average weekly range in this group is roughly 6.9%, a move of that size in three weeks places the group into outright extension territory.

• ATR multiples are now near 9 ATR above the 50-day moving average, which is extremely stretched.

• At that point, the issue is simple: there is very little marginal buying pressure left unless price pauses first.

• Semiconductors almost certainly need a pullback soon.

• Not because the trend is broken, but because the move has become mechanically too stretched to continue cleanly without digestion.

• This matters because semiconductors are still driving much of the broader growth rally.

• If semis cool, broader growth likely cools with them.

• Inside that group, however, one name still stands out technically: Micron Technology, Inc..

• MU is structurally much cleaner than many of the other leaders because unlike names such as Broadcom Inc. or Arm Holdings plc, it is not yet in extreme extension.

• It has built a much more orderly base through most of 2026.

• The key strength is that it has held consistently above its 10-week and 20-week moving averages, while also validating the Morning Star reversal that formed three weeks ago.

• We are now seeing a tight consolidation on declining relative volume above the 10-day moving average.

• That makes MU one of the few semiconductor names still showing constructive structure rather than outright excess.

• Immediate entry still depends heavily on whether semiconductors as a group can stabilise, but if one name remains resilient through any pullback, MU is currently one of the strongest candidates.