OVERVIEW
Caution Still Warranted — Let the Dust Settle

🟥 Risk-Off: Macro headlines continue to dominate — but equities are absorbing the news well for now. Still, we remain in a distribution phase with limited follow-through on breakouts. No need to force new risk today.

🔄 Rotation Watch: Tech (XLK) is showing early signs of exhaustion (rising wedge), while semiconductors (XSD) remain the key leadership group. Energy (XLE) is firm, benefiting from geopolitical tension.

📌 What to Do Now: Stay disciplined. We are not in an environment where new longs should be aggressively sized. Wait for clarity and for stronger setups to emerge. The playbook remains unchanged: stay patient, let setups come to you, and do not overtrade into headline noise (protect your capital- cash is a postion).

MARKET ANALYSIS
Price & Volume > News Headlines

It’s hard to miss the barrage of negative news this week: U.S. strikes on Iranian nuclear sites over the weekend, continued tensions in the Middle East, and risks around potential Iranian retaliation — specifically the threat to the Strait of Hormuz, which would have major implications for global oil supply.

Oil markets responded initially — spiking overnight — but quickly retraced. As of this morning, crude is back below recent highs, around $73–$74. In equities, futures remain remarkably stable, with no panic selling.

This tells us something important: markets are not pricing in a worst-case scenario here. There’s always a risk of escalation, but for now, price action is calm and controlled — even in the most macro-sensitive groups like energy and small caps.

The key:

Watch how price behaves — not the headlines. If markets start to price in greater energy disruption or broader conflict, we’ll see it in the tape. Until then, stay tactical. This is still a fragile environment — and far from a “full risk-on” moment — but so far, resilience is notable.

Nasdaq

The tech-heavy Nasdaq — still the market’s leading segment — is beginning to show some cracks.

Friday’s action saw a clear spike in relative volume on another rejection at the well-defined all-time high supply zone. This is not a great sign: volume confirms trend, and with price starting to turn lower over the past week — and relative volume increasing on each new lower low — this is typically a precursor to continued downside momentum.

Technically:

→ We’re now sitting right on the POC and the rising 20-day EMA, which have yet to be tested — so there is no immediate reason to panic… yet.

Key takeaway:

→ This is not the easy-money environment we had in mid-to-late April. If the Nasdaq fails to hold here and begins to break lower, it will likely drag the rest of the market with it.

Stay sharp — the leadership baton is wobbling.

S&P 400 Midcap

Midcaps were rejected on higher relative volume Friday right at their Point of Control (POC) — after building out a month-long base just above the rising 200-day EMA (which continues to provide solid support).

Structurally, this base is tightening, and a major resolution (either up or down) is increasingly likely.

Why do we remain cautiously optimistic?

→ The broader inverse head & shoulders bear market bottom remains intact.

→ The rising 200-day EMA is still being defended — a key sign of underlying demand.

→ Most importantly, despite heavy negative headlines, tape behavior remains resilient — the market is absorbing the geopolitical and macro noise far better than many expected.

That said — we don’t get paid to predict, we get paid to react:

→ Until we see more follow-through on breakouts and new, clean setups start to emerge, we’ll remain tactical and patient here — hands off the wheel for now.

Russell 2000

Small caps remain in a consolidation phase, sitting right on top of their Point of Control (POC) and rising 200-day EMA — both critical technical levels.

📌 Friday’s session saw a solid bounce off these ascending moving averages, and this morning’s pre-market action is notable:

→ Despite a very bearish, noisy macro news cycle over the weekend (geopolitics, oil spikes, Isreal vs Iran headlines), the most macro-sensitive group in the market — small caps — is not breaking lower in pre-market trade.

→ That’s a clear sign that the tape is absorbing this well, and bulls remain in control for now.

However…

→ We are not seeing any clear reason to get aggressively long here yet.

→ Relative volume has started picking up while price action remains tight — and unless we see strength and true range expansion, this could begin to suggest some distribution quietly building.

Advertisement
What if One Tool Could Show You Why You’re Losing Trades?

Still tracking trades in spreadsheets?
Still guessing why your strategy’s not working?

Meet TradeZella — the all-in-one trading platform built to help you go from inconsistent to in control.

✅ Auto-track every trade — no more manual logging
✅ Backtest with precision — validate your edge before risking capital
✅ Pinpoint your strengths + eliminate costly mistakes
✅ Visual dashboards that show exactly what’s working (and what’s not)
✅ All-in-one platform — replace your spreadsheets, journal, and analytics tools

TradeZella helps you save time, cut losses, and grow as a trader — by making smarter, data-driven decisions.

Use code ‘SWING’ for 10% off!

👉  Click here to level up your trading with TradeZella

FOCUSED STOCK
AISP: Major Multi-Year Base in Play

AISP is flashing an interesting setup today — but let’s be clear upfront:

→ If you’re considering taking this trade on today’s big pre-market gap (for which we can’t yet identify a confirmed catalyst), you need to remember we are in a distributive tape right now.

→ The market environment is choppy, follow-through rates on breakouts have been low, and you’d be swimming against that backdrop.

That said — from a purely technical standpoint, this is a high-quality setup:

→ On the weekly chart, AISP is emerging from an enormous multi-year Stage 1 base, with a continuous series of higher lows since November 2024.

→ In pre-market, it is now threatening to break through its long-standing descending resistance — a key inflection point in the structure.

📌 How to approach this

If we see strong opening range follow-through today, this will be difficult to ignore as a technical long — but we will only size this trade half-risk, and strictly manage it given the current environment.

FOCUSED GROUP
XSD: Semiconductors Hold the Line

The semiconductor space remains the clear leader within tech — and arguably the most structurally resilient group in the entire market. Stocks like ARM, NVDA, and MU (all of which we currently own) continue to outperform, even through the chop of the past few weeks.

Here’s what matters:

→ While broader tech sectors (XLK, RSPT) have shown early signs of fatigue, semiconductors have held support perfectly — consistently respecting rising moving averages on both daily and weekly charts.

→ On Friday, we saw a low relative volume fade back to the POC and rising daily 10EMA — classic healthy digestion, not distribution.

Why do we pay so much attention to this group?

Because semiconductors are the backbone of the AI leadership theme — the dominant growth driver in this market.

Historically, when semis (XSD, SMH) are pushing higher and refusing to break down, it is very difficult for the entire equity market to enter a deeper correction.

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

Q: “Can you explain the idea of rotation in a little more detail?”

A: Rotation is one of the most important — but often misunderstood — market concepts for swing traders.

At its core, rotation is about where capital is flowing. Think of the market as a living organism — money is constantly moving from one group or sector to another in search of better returns.

There are two types of rotation to understand:

1️⃣ Intra-market rotation (within equities)
This is when capital rotates between different sectors or groups. For example:

• Tech leads in early April →

• Money rotates into energy and gold in late April/May →

• Then rotates back into small caps in June, etc.

You’ll often hear this called "risk-on rotation" — capital stays inside equities but moves to where momentum and opportunity are better. When tech cools off, money might shift to industrials, financials, or even defensive names.

This is healthy — it keeps the market broad and strong. Your job is to follow the flows, trading the strongest sectors (where money is moving in).

2️⃣ Rotation out of equities (risk-off)
This is where things get more serious.
You’ll see broad selling across most sectors — not just rotation inside equities, but an actual withdrawal of risk appetite:
→ Think December 2024 through April 2025 — tech, financials, industrials all sold off. The only bid was in gold miners because capital was moving into safety.

That’s "risk-off rotation" — it tells you big funds are pulling out of stocks entirely. In this case, you must tighten risk, reduce exposure, and protect capital.

According to Morgan Stanley Quantitative Research, in 87% of market cycles, sector rotation precedes broad index reversals. Watching which sectors are gaining (or losing) relative strength gives you advance clues about broader market health.

Key takeaway:
→ When rotation stays within equities (risk-on), you trade aggressively — but only in leading sectors.
→ When capital is rotating out of equities, you get defensive and protect capital.

This is exactly what we do every day in Swingly — our job is to help you follow these flows before the headlines catch up.

Want to try Swingly Pro risk free? → See what’s included