July 17, 2026
Market Snapshot
Today’s price action delivered a clear technical break. Major indexes sliced through key support and took out both the June and July lows in the Nasdaq. The hot AI names that have led this entire move are showing classic signs of exhaustion. Despite the breakdown, the put/call ratio spiked sharply, and buyers stepped in at the lows — a healthy short-term sign that capitulation has not yet occurred. However, the leadership group is not confirming strength, so I am remaining cautious until the price stabilizes, especially with Mag 7 earnings next week!
Semiconductors – Still on the Sidelines
SMH broke the June lows today, down another 2.34%. TSM and ASML earnings were supposed to provide a bullish catalyst, but the reaction was uninspiring. TSM’s post-earnings behavior looks suspiciously like expectations were priced to perfection — a dangerous setup. I have not added any semiconductor exposure yet. My rule remains the same: I want to see price stabilize above the 50-day SMA on the daily chart and show a clear bounce from that zone before stepping in. Names I continue to watch for potential entries ahead of August earnings: AMD, AVGO, and NVDA. No positions established yet.
Key Pullback Zones to Monitor
On any name that has been hot, the levels that matter most right now are:
- 50-day, 100-day, and 200-day SMAs on the daily chart
- Previous swing lows and clear price support clusters
A break of these zones accompanied by a 5%+ decline on elevated volume is a higher-probability signal for additional downside. Seasonality has also shifted earlier than normal. We typically see strength in July earnings and a pullback in August. The Mag 7 names have skipped their usual pre-earnings rallies for several quarters now — this is the primary driver behind the earlier-than-expected pullback we are witnessing.
Sector Rotation – Consumer Staples
I am actively buying into the rotation. XLP is showing clear relative strength as money moves into defensive areas. Costco and Walmart are squeezing higher on the weekly chart and recovering nicely on the daily. I also like the setups in TJX and ROST — both have pulled back and are now consolidating constructively on the weekly timeframe.
Cybersecurity
This group continues to stand out with strong relative strength and bullish price action. NET, CRWD, and PANW are all holding up well. CRWD and NET currently offer the most attractive risk/reward for new long entries.
Aerospace Highlight – HWM
HWM is a true five-star setup right now. It has excellent relative strength, is bouncing cleanly off the 50-day SMA, and is approaching earnings with a very healthy pattern. This is one of the names I am actively working on adding to.
Mag 7 Drag & Broader Market
The Mag 7 continues to weigh on the broader market. Until we see these names stabilize and start to lead again, further downside remains possible. Next week marks the real start of Mag 7 earnings season, so volatility is expected.
Earnings Season Strategy
Next week’s reports from TSLA, GOOGL, INTC, and others have the potential to move the entire market. My bias remains long-term bullish on the major indices, but I am prepared to hedge aggressively if price fails to hold key levels. I am already positioned with QQQ put spreads (and butterflies) targeting a break below 700 with measured downside into the 675 area. If we do not see positive price action that holds after the key reports, I will begin layering in additional shorts on names that have been repeatedly punished after earnings and sit in clear bearish patterns (example: NFLX).
Options Earnings Watchlist – Next Week
- Bullish bias names: TSLA, GOOGL, TXN, INTC (still watching for post-earnings reactions — high expectations remain a risk)
- Bearish pattern names: IBM, NOW (earnings destruction setups)
- Notable mentions: SCHW and IBKR — both showing substantially higher trading volume and attractive setups.
Bottom Line
We are in a period of distribution in the former leadership and rotation into more defensive and select growth areas. The technical damage in the Nasdaq is real, but the put/call spike and buying at lows suggest we are not in full capitulation mode yet. I remain patient on the hot AI/semiconductor names, aggressive on high-quality setups like HWM and cybersecurity, and defensively positioned via staples and QQQ hedges. Next week’s earnings will likely set the tone for the rest of the summer. Volatility is coming — trade accordingly and manage risk tightly.
Trade smart. Stay disciplined.
