The Week in Review
We had a phenomenal week looking back at Flow State #97. The main thesis was that if price remained above the 6978 volume shelf, we could expect a bounce back to 7025. Monday’s session opened by spiking through 6978 and rallying exactly to our 7025 target—setting the high of the week before rotating back down.
By Wednesday, we saw price break below the 6968 short level (the VAH for the large value area). After some chop, we sold down to the 6932 Point of Control (POC), which is the most significant level in any value area as it holds the highest volume. We effectively called both the high and the low of the week.
Following President Trump’s tariff news regarding Greenland over the weekend, we saw a gap down into the Monday session. Price sold off to the 6889 High Volume Node (HVN) before putting in a solid low. We are currently seeing support at this level. Because volume is respecting these high-timeframe value areas so well, our core levels remain relatively unchanged for the week ahead.
I want to point out that there will be a shift to the structure of my posts on X. Expect more frequent charts and analysis on developing setups ranging from low-float stocks to blue chips. Successful setups will remain exclusive inside the Watchlist with full long/mid-term theses. A prime example of this will be as follows:
BNPL vs. Credit Card Caps: I recently posted a thread on the implications of the proposed 10% credit card interest rate cap. While this is a headwind for traditional banks, it is a massive tailwind for Buy Now, Pay Later (BNPL) structures.
Banks have already suggested they may stop issuing cards to those without perfect credit, reduce limits for riskier borrowers, and slash rewards/cash-back programs. Companies like PayPal (PYPL), Affirm, Block, and Shopify (SHOP) will pick up the slack.
Here’ s a link to a short thread on this topic: Credit Cards Caps and BNPL
Shopify is showing clear strength near all-time highs, but my primary focus is PayPal. PYPL is heavily shorted and beaten down to the 50 range. From a risk/reward perspective, the downside is limited while the upside—if the 10% cap is approved—is massive.
Then another example of this is AGX. Similar to IBP and BLD, AGX is a play on lower interest rates boosting building contracts. It is currently on the brink of breaking all-time highs with a target of 500.
Now we will shift our focus to the overall trend on both the SPY and QQQ.
The Big Picture (Macro)
The S&P is set to open just above the 10-week EMA (683.04). The conflict here is that while SPY attempts to hold, the NASDAQ is already selling off. If we see a daily close below the 10-week EMA, expect a move down to the 21-week EMA at 669.39.
The NASDAQ looks significantly weaker. We have a gap down below the 10-week EMA (616.40) and a break below the multi-week trendline. We are targeting the 21-week EMA at 602.96. This bearish outlook is only invalidated by a daily close back above the 10-week EMA.
Economic Calendar
Monday – Wednesday: None.
Thursday:
GDP (Q3) - A "Good" number for the economy is anything above 2%. It proves the US is sidestepping a recession. However, if this comes in too hot (near 4%), the market might fear the Fed will pause rate cuts.
Core PCE (Inflation) - This is the Fed's preferred inflation gauge. We want to see this trending toward 2% YoY. Bad data would be a print above 0.20%, as it suggests that recent tariffs are starting to leak into consumer prices, revealing a heating inflation. I expect this data to come in around 0.20% and the indices to take this data well.
Personal Spending - Little weight is being put into this release but in the near future this will be important.
Friday: None.
The Weekly Map (Paid)
Major Weekly Levels:
Upper Value Area: 7018–6975 (POC 6984)
