OVERVIEW
Boring Is Good

The market has been sluggish over the past few trading sessions, primarily because of the impending FED interest rate decision. The decision will be revealed after a two-day session starting today. However, most analysts expect the Fed Funds' target rate to stay steady at 5.25-5.5%.

The Federal Reserve had previously hinted at the possibility of initiating rate cuts at some stage, making any deviation from this stance noteworthy. However, with the central bank maintaining its target Fed Funds rate unchanged since July of the preceding year, the absence of such action, as anticipated for this week, would mark the sixth consecutive month of waiting.

It's evident that traders are not solely focused on the actual decision itself. Rather, their attention is directed towards Federal Reserve Chair Jerome Powell's potential remarks regarding the decision. This includes both the accompanying statement and any subsequent comments during the press conference.

Powell's decision to either discuss prospective rate cuts or acknowledge the prevailing sentiment among many observers—that there is a likelihood of no rate cuts occurring this year—remains the subject of interest.

NASDAQ

During yesterday's session, the QQQ exhibited a gap up and sustained the $432 level, surpassing all of its key daily EMAs. However, despite this positive movement, the accompanying volume, which typically reflects market participation, remained notably low. Consequently, this tepid market activity doesn't instill much confidence in the sustainability of the QQQ's current elevated levels.

This lack of market participation is likely attributable to traders exercising caution and refraining from making significant bets ahead of the imminent FED decision later this week.

The weekly chart indicates a robust surge in demand around the $415 mark, with buyers swiftly entering the market to protect against the breach of the weekly 20-EMA. Presently, the Nasdaq stands above the weekly 10-EMA. However, it's premature to draw conclusions; the Nasdaq must maintain this position by the week's end for signs that the pullback may finally be concluding.

Examining the Visible Range Volume Profile (VRVP) for the QQQ, it's evident that during yesterday's session, we surpassed a zone characterized by substantial overhead supply. Furthermore, the presence of a low volume cluster directly above suggests that the Nasdaq has the potential to advance beyond this level to reach its Point of Control (POC) at $428. This setup indicates a favorable environment for upward movement in the market.

S&P Midcap 400

The MDY midcap index has experienced an impressive streak of seven consecutive green days, accompanied by a notable decrease in volume. This mirrors the narrative we've observed with the Nasdaq, albeit with a more pronounced demonstration of the low volume rally we've been analyzing. This trend underscores the potential for a significant market movement fuelled by limited participation, highlighting the importance of closely monitoring these developments.

Russell 2000

In comparison to the other primary indexes, the resurgence of the Russell 2000 seems to offer the most promising risk-to-reward scenario. Despite prevailing technical indicators leaning towards a bearish outlook, the departure from oversold Moving Average Convergence Divergence (MACD) signals potential.

Nonetheless, should the Russell 2000 manage to establish a higher low and sustain its position above the 200-day moving average, it becomes an attractive option for long positions.

DAILY FOCUS
A Story Of Bulls & Bears

In today's session, our main priority will be closely monitoring the behavior of the three major indexes in relation to their moving averages. While the low market participation and the increase in share prices don't present a convincingly bullish signal, they do indicate a bullish sentiment nonetheless.

This suggests that sellers are not actively intervening, but their reluctance to fully commit indicates some degree of uncertainty.

We have significant earnings announcements approaching for some of our preferred stocks, and we'll be closely monitoring to see if any breakouts or earnings-driven episodic pivots begin to materialize. While we're not planning to take aggressive long positions, we're open to establishing half-sized positions in the stocks we'll discuss below.

This decision to maintain half-sized long exposure is a strategic move aimed at positioning ourselves effectively for the upcoming FED discussions. Should we witness the market extending its upward trajectory, particularly fuelled by optimistic remarks from Jerome Powell, we anticipate a substantial bullish influx into the market. We want to capitilize on this inflow without overexposing ourselves.

If there are no notable high-volume breakouts observed in leading stocks, we will confidently remain in a cash position.

MSTR: MicroStrategy Incorporated

• MicroStrategy (MSTR) disclosed a net operating loss amounting to $53.1 million, equivalent to $3.09 per share, for the first quarter. This loss followed the recognition of a digital asset impairment charge totalling $191.6 million, as stated in a press release issued on Monday afternoon.

• Despite experiencing a decline in pre-market trading today, it's noteworthy that MSTR isn't exhibiting a gap down accompanied by excessive volume. Additionally, it remains within the confines of its higher-low base that has been forming over recent weeks.

• Our sentiment towards the company remains positive, and we maintain our belief that MSTR holds considerable upside potential, especially following its recent bullish trajectory.

COIN: Coinbase Global, Inc

• Coinbase continues to maintain its higher-low technical pattern, exhibiting a notable contraction in volatility as it approaches its earnings release.

• We don't expect any positions to be triggered before Thursday's earnings release, which aligns perfectly with the FED decision. Nonetheless, we'll be closely monitoring to see if COIN can defend its $210 lows.

MARA: Marathon Digital Holdings

• MARA has successfully defended its daily 200-EMA and rebounded from its brief undercut earlier in the month, accompanied by significant volume.

• Presently, the stock finds itself squeezed between its descending daily 10, 20, and 50-EMAs, amid a contraction in volatility, coinciding with its upcoming earnings.

• We anticipate a significant move, likely to the upside, and will closely monitor whether MARA can sustain its consolidation above its 200-EMA.