MARKET ANALYSIS
Here’s All You Need To Know

• Markets are reacting to a genuine regime shift rather than a single headline, with risk being repriced across equities, rates, FX, and commodities simultaneously.

• The recent sell-off marks a transition from rotational, index-masking weakness to broader, correlated pressure, which materially changes the risk profile.

• Volatility has expanded while yields are rising and the dollar is weakening which is a dangerous combination that historically compresses equity multiples rather than supports dip-buying.

• Small and mid-caps continue to show relative resilience, but they are no longer insulated, and gap-down opens across these segments signal that liquidity is being pulled back, not rotated.

• After months of choppy, two-day momentum cycles, the market is now vulnerable to acceleration, as positioning has not fully adjusted to downside risk.

• This is not an environment that rewards anticipation or trading strength; it rewards patience, discipline, and confirmation at the close.

• Until volatility contracts and downside pressure stabilizes, risk-off positioning is the higher-probability decision.

• Do not overcomplicate this. The tape is warning that conditions have changed. Stand aside, protect capital, and wait for the market to re-earn risk exposure

Nasdaq

41.17%: over 20 EMA | 45.09%: over 50 EMA | 56.86%: over 200 EMA

• The NASDAQ experienced a decisive breakdown yesterday, and the severity of this move should not be understated.

• QQQ gapped down approximately 1.8% and attempted an intraday mean reversion that carried price back to the 50-day EMA near 615.45, equal to one full average daily range.

• That level had previously acted as demand on January 2 and January 14, but yesterday’s rejection confirms a clear failure of that support zone.

• The session printed the highest relative volume since the November 20 capitulation, occurring during a rejection of both the 50-day and 10-week EMAs.

• High-volume rejection at a former demand level is one of the weakest structural signals possible and typically precedes accelerated downside.

• The equally weighted NASDAQ confirmed the weakness rather than diverging from it.

• QQQE gapped down ~1.45%, rallied nearly 1% intraday (exceeding its average daily range), and then fully rejected the move.

• The reversal occurred on extreme volume — roughly 185% of the 20-day average — also the highest since November capitulation.

• The failure of both cap-weighted and equal-weighted NASDAQ removes the last internal support argument for this index.

• From our standpoint, this is a clear risk-off signal and not a market to be trading from the long side within large-cap growth or tech.

S&P 400 Midcap

61.15%: over 20 EMA | 70.67%: over 50 EMA | 66.16%: over 200 EMA

• Mid-caps continue to outperform on a relative basis and remain in a confirmed Stage 2 advance.

• Yesterday’s session saw an intraday rally of ~1.1% from the gap-down open, but price rejected into a dense supply zone near 638–640.

• Volume at those highs suggests trapped long exposure, increasing the probability of near-term pressure.

• A gravestone-style rejection formed at the highs; while not statistically decisive on its own, it adds to the broader risk context.

• Failure to hold the 10-day EMA would open a path toward the 20-day EMA near 622, effectively retracing roughly 10 sessions of progress.

• Deeper downside risk expands toward the December–early January base if selling pressure broadens further.

Russell 2000

57.71%: over 20 EMA | 64.62%: over 50 EMA | 65.13%: over 200 EMA

• Small caps saw a sharp gap down yesterday of roughly 1.5%, followed by an immediate reaction off the 10-day EMA near 261.

• Volume at that level showed a favorable demand skew, with approximately 3.3 million shares traded on upticks versus 2.7 million on downticks.

• However, the session also produced a long upper wick after a full gap fill, signaling meaningful supply overhead.

• At the highs, selling pressure intensified, with downside volume materially exceeding upside volume.

• The resulting candle formed on elevated relative volume (~120% of average), marking the highest turnover since mid-December.

• From a trend perspective, the Russell remains the relative strength leader and we are not positioned to fade it.

• The key level remains the 10-day EMA near 260.9; consolidation above this level would be a healthy continuation within a Stage 2 advance.

• A period of contraction and digestion at highs would be constructive and preferable to further immediate upside.

FOCUSED STOCK
VIST: Tightness in Leading A Group

ADR%: 3.48% | Off 52-week high: -19.8% | Above 52-week low: +56.3%

• Vista Energy remains one of the strongest non-U.S. energy names we track, with operations concentrated in Argentina and Mexico and exposure to one of the largest shale developments outside North America.

• Relative strength has been persistent since the post-earnings gap on October 27, with price consistently holding above rising 10- and 20-week EMAs.

• After a sharp pullback in early January, VIST rebounded aggressively, rallying roughly 15% in four sessions before topping near 51.13 on January 14.

• Since that peak, price has transitioned into a clean bull flag, with volatility compressing and range tightening since January 13.

• Yesterday’s session was constructive: price undercut the open, tagged the 10-day EMA near 48.24, and reversed higher on expanding relative volume (~93% of the 20-day average).

• Importantly, volume has been expanding on upside moves while contracting on pullbacks since the January 8 low which is a good demand signature.

• Energy remains a relative outperformer, but VIST stands out due to its limited correlation to U.S. macro risk and its positioning within critical oil and gas infrastructure.

• A decisive push through the 50–51 zone would open the door to further upside, but we are not interested in chasing opening-range or breakout highs.

• Optimal entries remain pullbacks into rising moving averages, similar to the January 7 and January 15 tests, rather than momentum entries.