The Market Brief
U.S. futures lower early Friday as AI-related fears temper the optimism sparked by a less hawkish commentary than expected from the Federal Reserve on 2026 rate cuts.
Misled by Price
Trading purely off price can be surprisingly misleading. Think about the feeling you get when you wake up to see the market down 1% overnight, your first reaction usually isn’t a calm one.
That’s why context matters. You need to know when the move happened and where it sits within the bigger picture. It’s a bit like assembling a puzzle: the pieces only make sense once you see the full layout.
Timing: Did the drop occur during the overnight session, when the flow is dominated by short-term, lightly capitalized traders? Or did it happen during regular trading hours, when larger, more informed players are active?
Location: Where does this pullback sit within the broader range? Did price simply snap back toward the average of the larger distribution, or is it breaking into new territory?
Reason: What’s driving the move? Is it another round of headline “concerns,” or does it point to a meaningful shift in the macro backdrop?
Risk-Off: Is the entire market moving lower, or is the weakness concentrated in a few sectors or specific names that are dragging things down?
Putting the Puzzle together
Only when the full puzzle is in front of you can you see what the market is actually doing. Most traders grab a single puzzle piece and make decisions off that alone. That’s exactly what leads to unnecessary losses.
Confidence
Confidence comes from being data-driven. That means grounding your decisions in what the market is actually doing, both ahead of time and as conditions unfold in real time.
Yesterday, we shared a post on X pointing out that, despite what the index appeared to be showing, the underlying market was actually displaying notable strength beneath the surface.
This ultimately led the market to finish higher on the session, squeezing the entire overnight move. It played out exactly in line with the upside scenario we outlined earlier during the overnight session.
We’ve posted a video on X walking through these observations and explaining why we had that level of conviction. [Watch Here]
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