[LIVE] Pre-Market Prep – Markets DUMPING As Rates Bounce Back Higher

Thursday, August 20 — Pre-Market “Prep” Overview

The presenter runs a pre-market trading “prep” for Thursday, August 20, framing the morning as a risk-off, rates-driven selloff across broad equities, while crypto and some single stocks outperform.

Market Setup: Stocks Slide as Rates Rise

• Bitcoin/Crypto surge, but semiconductors and high-beta tech drag the broader tape.
• Equity futures (ES/SP/NQ) are pointed lower.
• The presenter emphasizes markets are “calling the bluff” on efforts to push rates lower (with reference to Bessent and the bond market’s response).
• Treasury yields rise again, pressuring equities—especially growth/tech:
  • 10-year: back around ~4.708%
  • 30-year: discussed around ~5.25%

Key Macro/Data and Calendar Expectations

• 8:30 AM: Philadelphia Fed manufacturing and jobless claims are flagged as a volatility catalyst.
• 10:30 AM: Natural gas (for gas traders).
• Friday: S&P Global flash PMI metrics are noted.
• Earnings focus early:
  • Walmart is the major pre-market item.
  • Other names are mostly described as “behind us.”
  • Next week’s Nvidia is treated as the major “Super Bowl” earnings event for markets.

Earnings Headline Reaction: Walmart Weak

• Walmart gaps down.
• The presenter cites:
  • EPS beat (adjusted EPS above expectations),
  • but consumer comps miss and soft outlook/guidance outweigh the beat.
• Other earnings mentions include:
  • John Deere (chart not great)
  • Roth/other follow-ups after hours
  • Walmart remains the central driver.

Fed / Rate-Cut Expectations (“Fed Watch” Tool)

• The presenter says the market is still pricing a secondary cut and then another adjustment later in the year.
• They complain Fed Watch tool is glitchy and do not provide detailed final probabilities.
• Overall implication: even with expectations of cuts, the bond market pushes yields higher, which is the immediate pressure on stocks.

Cross-Asset / Headline Themes

• Iran-related and geopolitics headlines:
  • Includes “Iran’s economy is collapsing” and pushback from a central-bank adviser.
• Treasury buyback plan and long-end curve dynamics are linked to rising yields.
• AI/tech headlines appear frequently:
  • Madna (likely “Medna”) surging after “curing cancer” news
  • Alibaba discussed with AI spending tied to a large net-income drop
  • Crypto regulation referenced via a “Cryptoclarity Act” prompt by Trump

Technical Framework: “Gap Rules” Driving Trade Plans

The presenter’s core method is technical and rules-based. They repeatedly stress that gap-down behavior triggers specific “gap rules.” The main goal:

• Don’t chase shorts into lows on a gap-down day.
• Prefer setups such as “look below and fail” of the overnight low, which may lead to:
  • reclaiming the opening print, and/or
  • moving toward gap-close and forming a higher low on higher timeframes.

ES (S&P Futures): Bearish Trend Context

• The presenter says ES is breaking down in pre-market and is in a clear hourly downtrend.
• Bull case requires:
  • holding the overnight low, and
  • showing evidence of reversal (e.g., look below & fail, then reclaim levels).
• Conceptual targets reference:
  • gap-close, prior highs, and previous all-time high zones
• Key point: trend remains down unless key levels hold.

NQ (Nasdaq Futures): More Nuanced

• Compared with ES, the NQ is treated as having a stronger bounce attempt off overnight lows.
• “Gap rules” are described as less dominant due to the gap context.
• An (inverted/conjoined) head-and-shoulders-like structure is referenced around a key support zone.
• Preference: support + rebound behavior, unless the overnight low breaks and holds below.

QQQ (Nasdaq Cash ETF): Mild Stabilization Tone

QQQ is described as showing counter-trend snapback, potentially neutral-to-bullish if:

• it fails to go lower than the overnight low, and
• it reclaims the 50 SMA.

Russell (RTY/IWM): Cautious on Small Caps

• The presenter is more cautious on small caps:
  • RTY forms a more head-and-shoulders-like rejection structure
  • small caps remain sensitive to the rate narrative (described as a “BS detector” being “on” for lower rates)
• IWM is said to be holding a key level near 300; losing it would be a headwind to the broader market.

Stock-Level Watchlist (Core Trades / Themes)

Guidance is framed as “wait for the chart signal.”

• Nvidia (NVDA):
  • Bouncing from support; earnings next week emphasized
  • Preferred logic: look below & fail
  • Target discussed around a full gap-close region
• Apple (AAPL):
  • Viewed as defensive
  • If market stabilizes, possible test of higher levels around 310
  • Otherwise may grind/flag
• Microsoft (MSFT):
  • Needs a cleaner “gap test” behavior
  • Current pre-market setup called sloppy
  • Prefer retest + rejection at the gap level
• Amazon (AMZN):
  • Prefer holding support around the low-to-mid 260s
  • Reclaim the 50-day area after a gap-retest pattern
• Google (GOOG/GOOGL):
  • Choppy; not attractive for aggressive action
• Broadcom (AVGO):
  • Counter-trend trading discussed
  • Shorts preferred after gap-close / clearer rejection, not at current levels
• Micron (MU):
  • Structurally interesting: possible inverted H&S / higher-low behavior
  • Conditional triggers around prior levels and the 50 SMA
• AMD / Intel:
  • Avoid initiating new shorts right into support
  • Wait for breakdown/range development
• Meta-related (including “Metaverse”):
  • Watchable for potential shorts
  • Mentions a prior missed bearish setup
• Biotech (MRNA / “Labu”-type names):
  • Biotech upside framed as “cool/advancing” with discussion of a speculative cancer-immunotherapy narrative
  • Caution: market interpretation remains uncertain and depends on future findings

Overall Conclusion / Stance

• Tone is cautious-to-bearish on ES.
• More constructive/neutral on NQ/QQQ if:
  • overnight lows hold, and
  • levels get reclaimed.
• Main message:
  • Rates are driving behavior
  • The market trades by gap rules
  • The plan is to wait for overnight low failure / gap-close confirmation, rather than chase immediately after the dump.

Presenters / Contributors

• Matt — main presenter/host of the pre-market program