Video summary

[LIVE] Pre-Market Prep –TSM Earnings Gap DOWN! – The AI Trade Is DEAD...

Main summary

Key takeaways

Finance

Macro / Economic Calendar (timelines & what they may influence)

Today (Thu, July 16) key releases

  • 8:30 AM
    • Retail Sales
    • Philly Fed Manufacturing
  • Primary focus (timing): Jobless Claims
    • Framed as the most important item for Fed/inflation-expectations context
  • Lower priority
    • 10:00 AM — Business Inventories, Housing Market Index, Pending Home Sales
    • Nat gas storage (dismissed as “don’t really care”)
  • Afternoon
    • No meaningful intraday catalysts called out
  • Late day / evening
    • 9:00 PM — “Trump speaks” (headline risk / geopolitical tone)

Tomorrow (Friday) mentions

  • Building permits
  • Housing starts
  • Import prices
  • 10:00 AM — University of Michigan preliminary consumer sentiment & inflation expectations
    • Noted as a needle-mover vs revisions

Fed-rate Expectations / Inflation Backdrop

Speaker frames the Fed setup as improved because

  • CPI beat expectations
  • PPI beat expectations

Fed Watch / market pricing (explicit framework)

  • The market has unpriced a “secondary” rate hike that was being pushed around the calendar (Dec → Jan → March).
  • Now pricing is back to “just a single rate hike.”

Inflation expectation signal

  • 2-year break-even inflation swaps are moving down → suggests less inflation concern.

Geopolitics / Rates → Crude Linkage (risk-off driver)

Rate hike claim

  • A rate hike won’t “open up the Strait of Hormuz and keep crude prices lower.”

Crude tape description

  • Earlier rally cooled (“fell off a cliff”) after de-escalation.
  • Now crude is ticking back upward.
  • Expectation: possible lower high.

Earnings & Sector/Stock-Specific Catalysts (what’s driving the tape)

Core thesis: “AI trade is dead” = positioning/crowding, not company quality

ASML

  • Gapped up on earnings
  • But sold off intraday
  • Described as distribution vs accumulation

TSM (primary focus for today)

  • Gaps down despite “decent earnings,” including:
    • Record earnings
    • Raised annual revenue and CapEx outlooks
    • Q3 guided above expectations
  • Even so, US ADR is trading lower before the bell.

Why the move is framed as positioning, not fundamentals

  • Not “TSM is a bad company” / “AI won’t change the world.”
  • Instead: crowded positioning + lack of incremental buyers
    • “Everybody already owns TSM”
    • “Everybody already owns ASML”
  • For profit-taking (exit liquidity):
    • Rallies can be sold on gap-up distribution
    • Declines can continue when longs are looking to exit

Other Earnings Headlines Mentioned (directional context)

  • UnitedHealthcare (UNH): gapping up; described as defensive
  • GE Aerospace: mentioned (direction not specified)
  • BlackRock: called out as “blowout earnings”; JP Morgan says buy
  • Eli Lilly (LLY): to buy psychedelics maker for $2.8B
    • “Gap-up attempt” but off flag highs
  • Merck (MRK): FDA approval for a cholesterol pill (direction not detailed)
  • United Airlines: earnings top estimates; expects $6B added fuel costs from elevated fuel costs
  • J&J: falls despite beating; “good but not good enough” dynamic implied
  • Netflix: “after earnings on Thursday to get its mojo back” (risk of post-earnings weakness)
  • Headline context mentions:
    • Boeing
    • Lufthansa
    • Rolls-Royce partnership
    • Anthropic / OpenAI: mega IPO timing moved toward 2027

TSM Investment Headline

  • TSM to invest $100B in Arizona
  • After Q2 profit soars over 77% (77%+ growth rate cited)

Market Levels / Technical Framework (ES futures) — step-by-step “pathing”

Instruments & tickers/instruments extracted

  • ES futures (E-mini S&P 500 futures)
  • NQ / Nasdaq futures (used as an ES vs NQ “push-pull” reference)
  • Stocks mentioned
    • TSM
    • ASML
    • UNH
    • GE Aerospace
    • MRK
    • LLY
    • Nvidia (ticker not stated)
  • Oil futures (referenced without a ticker)
  • US 10-year yield (referenced without a ticker)
  • Nat gas storage (commodity)

ES futures technical levels & scenarios (explicit numbers)

  • Key resistance: 7600
  • Key support area: around 7545 (repeated as “neighborhood of 7545” / “75,45”)
  • Bull case rules
    • Maintain higher lows over roughly the mid-7540s area (speaker corrects/clarifies to effectively “stay above ~7545”)
    • Continue higher highs with higher lows
    • Breakouts over 7600 are bullish
  • Hourly downtrend flip (bear triggers)
    • Failure / lower high under 7600, or
    • Taking out the prior higher low, then drifting into the range

Moving average / “stack” risk management reference

  • If price goes “straight down,” then lowering below the previous day’s low leads into the “moving average stack.”
  • Staying above the moving average cluster is framed as the “okay spot.”

“Simplified Pathing” Framework (step-by-step)

The speaker lists three and a half questions to guide expectations for the open:

  1. Where are we opening vs the previous day’s range?
    • Currently opening in range → neutral
  2. Where are we opening vs the value area?
    • Value area closed higher the prior day
    • Opening under value → bearish tone / disappointment risk for longs
  3. Where are we opening vs the overnight range / inventory?
    • Pressed into the overnight low
    • Overnight positioning: “not a net short, but probably net short”
    • Roughly ~78% net short (speaker notes uncertainty in the exact decimal)

Additional Short-Term Context

  • Market described as a 4-hour short-term uptrend inside consolidation, but with weak follow-through expected due to TSM gapping down.
  • TSM treated as a “buoyancy force” that should help ES if the tape were broadly bullish—instead, it’s dragging, increasing downside risk.

Explicit Recommendations / Cautions (trading & risk management tone)

  • Emphasis on positioning/crowding, not fundamental deterioration (“not that TSM is bad”).
  • Don’t let boredom drive rule-breaking:
    • “Don’t fall victim to becoming bored” and changing behavior just to find excitement.
  • Technical caution:
    • Watch for hourly trend flips bearish via:
      • failure / lower high under 7600, or
      • breaking the prior higher low
  • Implied risk posture:
    • Opening below value suggests a bearish buffer and potential rejection from overhead supply (trapped longs feel disappointment).

Disclosures / Disclaimers

  • No explicit “not financial advice” or other legal disclaimer is present in the provided subtitles.

Key Numbers Gathered (most explicit)

  • Date/time: Thu July 16; pre-market around 8:00–8:05
  • FedWatch narrative: market pricing back to single rate hike
  • 2-year break-even inflation swaps: moving down
  • US 10-year yield: 4.581% (+3.6 bps) pre-market
  • Futures pre-market (basis points)
    • Dow: +16 bps
    • S&P: -22 bps
    • Nasdaq: -80 bps
  • Oil price level referenced: 79.81 per barrel
  • TSM headline numbers
    • $100B Arizona investment
    • Q2 profit +77% (soars over 77%)
  • Eli Lilly deal: $2.8B
  • United Airlines fuel cost: $6B added fuel costs
  • ES futures levels
    • 7600 (pivot/resistance)
    • 7545 (support mention)
    • Bull condition: higher lows over ~7545
  • Overnight inventory estimate: ~78% net short (speaker estimate with uncertainty)

Presenters / Sources Mentioned

  • Presenters (in-studio): main host (not named in subtitles)
  • Named sources/users referenced
    • CNBC (used for top-line figures)
    • Jason (referenced as “at the Crowded Market Report”; full name not provided)
    • Fed Watch tool (mentioned by name)
    • ES/NQ (instruments referenced)

Original video