MARKET ANALYSIS
Here’s What You Need To Know

• The macro backdrop got materially worse this morning after the February payrolls report missed badly, with the U.S. economy losing 92,000 jobs versus expectations for a gain, while the unemployment rate rose to 4.4%.

• That is a meaningful downside surprise and it immediately increases concern that the labour market is beginning to weaken more decisively.

• The jobs data is not entirely clean. A large Kaiser Permanente healthcare strike distorted the headline number, and Reuters also noted harsh winter weather as another drag on February payrolls which is very important because it means the report is weak, but not necessarily a clean read on underlying trend.

• Even with that caveat, the report still matters because it comes at a time when the market is already under pressure from oil, geopolitics, and elevated volatility.

• Oil is the other major macro problem. WTI pushed above $86 and Brent above $89 after renewed concerns around Gulf supply disruption and the near-standstill in Hormuz traffic. That keeps the inflation impulse alive at exactly the wrong time for equities.

• The market is now trying to price two opposing forces at once. On one side, the payroll miss strengthens the case that growth is slowing and that the Fed may eventually need to cut.

• On the other side, the oil shock keeps inflation risk elevated, which makes the policy path much less straightforward.

• Qatar’s energy minister added to that stress by warning that the war could force Gulf exporters to halt energy exports within weeks, and that oil could spike as high as $150 if disruption deepens. That is not the base case the market is trading right now, but it is the tail risk that is keeping fear elevated.

• Futures reacted exactly how you would expect to that combination. After the jobs release, Dow, S&P 500, and Nasdaq futures all sank sharply, with the Nasdaq again taking the biggest hit. That fits the broader picture we have been discussing all week where growth remains the most sensitive area whenever macro stress re-accelerates.

• One of the more interesting cross-currents is that ADP private payrolls were stronger earlier in the week, showing a gain of 63,000 jobs in February. That divergence versus the official payrolls number just adds another layer of uncertainty and makes the tape even harder to trust in the very short term.

• The market is now dealing with a growth scare and an inflation scare at the same time. That is a much more difficult environment to trade than a clean risk-off move or a clean soft-landing setup.

• Until either oil begins to cool or the market gets more clarity that the payroll weakness was largely distortion rather than trend, expect continued violent moves, failed intraday recoveries, and very little clean follow-through across most equities.

Nasdaq

48.51%: over 20 EMA | 43.56%: over 50 EMA | 43.56%: over 200 EMA

• The most important takeaway in the Nasdaq right now is that we are seeing yet another dense supply cluster build right at the highs, with price once again rejecting around the $600 area.

• That rejection has now happened two sessions in a row intraday, which tells you very clearly that sellers are defending this level aggressively.

• Yesterday’s rejection came on 151% relative volume, and that matters because it means participation is rising as price is selling off, which is not what you want to see if you are looking for a clean recovery.

• This morning, pre-market weakness is only adding to that concern. The QQQ is now gapping down roughly 1.65%, taking price straight back into that prior demand zone around $600.

• We do need to emphasise that this move can still extend lower. A test of roughly $591 remains very possible, which from current pre-market levels would represent another 1.33% downside move.

• That matters because the QQQ is now teetering on the edge of a Stage 4 breakdown. If this current demand level fails to hold, especially around the $592 area where we saw price bounce on Tuesday, then the odds increase materially that the Nasdaq enters a deeper markdown phase.

• In that scenario, the next meaningful downside level is the rising 200-day moving average near $585, which is roughly another 2% lower from the current gap-down levels.

S&P 400 Midcap

34.00%: over 20 EMA | 44.50%: over 50 EMA | 57.75%: over 200 EMA

• The mid-caps saw the exact same expansion to the downside yesterday, and in many ways the setup looks even weaker.

• Relative volume spiked to 202%, which is extremely high, and now pre-market price action is erasing even more ground with another 1.3% downside move.

• Price is already below the 50-day moving average, and while we have not yet fully broken the 20-week moving average, that is now the most important level to watch. The 20-week EMA sits around $624, which is only about 1% below current gap-down levels.

• The problem is that we do not have a particularly strong buildup of demand at that 20-week level. The visible range volume profile simply does not show a very dense support zone there, which means that if price reaches it, it may not hold with much authority.

• Because of that, we would not be surprised to see a further downside move into the $616 to $618 area, where the volume profile finally begins to thicken out and demand becomes a little more meaningful.

• Yesterday’s candle range was also extremely large. The range came in at roughly 2%, which is about 40% greater than the 20-day average true range. Again, that downside expansion happened while price was rejecting the declining 10- and 20-day moving averages, which is exactly the type of behavior you would expect to see in a weakening market.

• The broader takeaway is that mid-caps are no longer acting like leaders. What you are seeing now is simply an exaggeration of weakness, and unless demand appears very quickly, the path of least resistance still looks lower.

Russell 2000

37.06%: over 20 EMA | 41.86%: over 50 EMA | 59.07%: over 200 EMA

• Small caps also sold off very hard, and structurally this may actually be the most concerning of the three. The IWM is now sitting below the contraction pattern that had been in place since January 2026, which is a major character change.

• Yesterday, price briefly attempted to break back above that contraction, rallying toward $260, but the move was completely rejected. That rejection was not just a rejection of a prior support level that has now turned into resistance, it was also a rejection of the declining 10-day, 20-day, and 10-week moving averages.

• Relative volume also expanded aggressively, printing roughly 160% relative volume, which confirms that sellers were active and not simply fading because of a quiet market.

• Now in pre-market, the IWM is already trading below the 20-week moving average, which is a very important shift because that level had previously acted as a key support level throughout this broader consolidation.

• From our perspective, unless you see an immediate recovery, the IWM likely has another 3.82% downside still to go before it reaches the next major support zone, which is where the rising 200-day moving average and rising 50-week moving average both come into play.

• Given the continued escalation in the Middle East, and the fact that the market is finding it harder and harder to actually price in the macro backdrop, small caps look especially vulnerable here.

• The broader conclusion across all three indices is straightforward. This is now a complete and utter risk-off market. The worst thing you can do right now is force trades in an environment where volatility is high, linearity is poor, and price is breaking structure across multiple segments at once.