OVERVIEW
So Far, So Good

There’s nothing too dramatic to report in today’s market overview. The markets are making a strong rebound off their moving averages, and so far, the action is actually looking quite promising. Despite what the headlines might be screaming, there’s no need to panic. That’s exactly why Swingly is here—to separate fear from fact and provide you with real, thoughtful analysis.

Let’s talk about this so-called "recession" that everyone seems to be buzzing about. The idea that the recent market sell-off is a sign of an impending economic collapse is, frankly, overblown. Yes, it's true that predicting the future with any degree of certainty is tricky, especially when we're looking a year or two down the line. But the notion that we're on the brink of a major downturn just because of this recent dip?

That's more fear than fact.

Look at the Japanese Nikkei 225, for example. It took a hit just like the rest of the global markets, but it’s bounced back remarkably quickly with a big hammer candle on the weekly chart.

This recovery is encouraging to see, even if it wasn’t the exact spark for the sell-off. It’s a reminder that global markets are interconnected, and what happens in one place can ripple across the world. But at the same time, it shows that recovery is possible and sometimes faster than we expect.

Let’s also address the recent U.S. jobs report, which seemed to kick off this wave of selling. The report was interpreted in the worst possible light, not because the underlying U.S. economy is in shambles, but because the market had been riding a wave of optimism.

Sure, the economy might be a bit weaker than we anticipated, but it’s still growing. The sky isn’t falling, despite what the media might want you to believe.

And speaking of the media, it’s hard to ignore the political drama playing out right now. With Donald Trump and Kamala Harris both deep in their campaigns, each side is using the market’s fluctuations to score points.

Left-leaning media outlets are blaming Trump, while right-wing sources are pointing fingers at Kamala and the Biden administration. It’s all about scoring political points, and it can be hard to separate the spin from the reality.

At the end of the day, whether this sell-off is a sign of something more significant or just a blip on the radar is impossible to say with certainty. But instead of getting caught up in the noise, focus on the fundamentals and the facts. Markets go through cycles, and while it’s easy to get swept up in the latest headlines, keeping a level head is key.

Nasdaq

The Nasdaq has been struggling lately, but the last two sessions have shown some real promise. The QQQ found strong support at the $424 level, which lines up perfectly with the weekly 50-EMA. This touchpoint seems to have sparked a surge in demand, leading to a noticeable uptick in volume.

Since then, we’ve seen the Nasdaq reclaim its daily 200-EMA, and it even managed to close the gap left by Monday’s big pre-market sell-off. It’s a positive sign, but we’re not out of the woods just yet.

What we’re likely to see next is some sideways consolidation. We could be bouncing between the falling daily 10-EMA, around the $455 level, and the daily 200-EMA at $435.

This will set the stage for a flag pattern or a volatility contraction, as the market decides its next move in the coming week, for now it’s still risk off for us.

S&P Midcap 400

Midcaps are also making strides in recovering lost ground, bouncing off their weekly 50-EMA, which has proven to be a significant demand zone. This is clearly visible in the large volume cluster around the $510 level, according to the volume profile.

The MDY is currently pushing against a major supply level at its point of control (POC) around $534. Breaking through this level won’t be easy, and we’re likely to see some range-bound action within this $24 range for a few sessions.

Ideally, we’d like to see $534 get broken as soon as possible, and as of now, the midcaps are making an attempt to do just that in premarket trading.

However, we still believe it’s too early to jump into long positions. We’d prefer to wait for confirmation of trend before making any moves which includes the 10 & 20-EMAs curling back up.

Russell 2000

The small caps are making an impressive move, pushing above their point of control (POC) and their daily 200-EMA. Interestingly, the 200-EMA acted as support during yesterday’s session, which was a pleasant surprise.

The IWM managed to attract buyers at the $202 level, preventing these key zones from being lost. As a result, the Russell 2000 is now making a pre-market push above Friday’s lows, getting close to the falling daily 50-EMA at $209. This is a significant resistance level and is likely to create some friction.

When we look at the volume profile, it’s clear that $209 is a crucial level. If we see a strong move above this level that holds, there’s very little supply to prevent a sharp recovery rally up to $216. This move could be further fueled by an unfilled gap and the lack of significant resistance above $209.

DAILY FOCUS
Profitable Trading Is Meant To Be Boring

As we head into the trading day, our primary focus remains on being patient. The markets are showing some signs of life, but it’s still too early to determine whether this is a relief rally before a deeper markdown or the start of a genuine bottom. Jumping in now would be risky and potentially costly.

We’re continuing to run our scans, focusing on stocks with the highest relative strength. These are the names we want to keep an eye on, but as of now, there are no actionable setups that meet our criteria. The market needs more time to develop before we can confidently take positions.

For today, the plan is to wait for confirmation. We’ll be watching how the market reacts to key levels and whether any setups start to materialize. But for now, it’s a time to sit tight and avoid unnecessary risks.

It’s tempting to try to catch the bottom, but the reality is that it’s too expensive to find out if this is it. We’ll be patient, let the market come to us, and only move when the right opportunities present themselves.

Remember, you’re meant to be here to make money and not to just be excited and filled with dopamine. Sitting on your hands is dull but nevertheless it’s the right thing to do 99% of the time.

Let me ask you this, If you could only enter 5 trades per month, would you be risk entering them right now in this climate? Or, would you rather wait for an uptrend where the efficacy rate of your long position is higher?

WATCHLIST
The RS Leaders

SERV: Serve Robotics Inc.

• SERV is definitely a speculative play with weak fundamentals, especially when you look at the income statement. However, from a purely technical standpoint, the stock appears to be building a potentially explosive base.

• This is a classic example of a 3-day momentum mover setup—one we’d consider trading in the very short term due to the stock’s low internal quality but strong technical momentum.

• The last time SERV had a breakout on a massive green volume day, it sparked a +450% move within just a week of trading. That kind of potential is hard to ignore, even if the fundamentals aren’t solid.

• We’re keeping a close eye on how small caps are performing, especially in this lower-rate environment, which generally benefits them. It’s also worth noting that the IWM is showing relative strength compared to large caps in the QQQ or SPY, which could provide some interesting opportunities.

ASTS: AST SpaceMobile, Inc

• ASTS remains the standout high relative strength (RS) and high average daily range (ADR) setup in the market right now.

• The stock is developing a Volatility Contraction Pattern (VCP) as it approaches its earnings report in mid-August. Importantly, ASTS has consistently maintained every touchpoint of its 10-EMA, demonstrating exceptionally high relative momentum.

Get Involved!

Let us ask you—what stocks are you currently watching? Have you found any promising high relative strength setups that you’re tracking?

We’d love to hear your thoughts!

Feel free to reply to this email or share your picks in the comments below on our website.