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The Mag 7 Earnings Gauntlet: Tesla, Google and a Market Under Fire
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We have a busy week ahead that will be overshadowed by the US/Iran war, the continued sell-off in the semiconductors, and two of the Magnificent 7 stocks: Tesla (TSLA) and Alphabet (GOOG) on Wednesday, and Intel (INTC) and IBM (IBM) Thursday.(doing what on Wed?)
The global chip market has lost over $3 trillion in market value since June 22, with a big percentage of that flowing out from the Magnificent 7. According to BNP Paribas, semiconductor sales increased 79% year-on-year in the first quarter of 2026, up from 38% in the fourth quarter of 2025, and expects the second quarter to show sales growth of 132%.
I think the big question is: Is all the spending good enough for continued returns, and at the current spending levels, is it enough for positive investor returns?
It seems like tech/AI has entered a new phase where pricing was set at one level, now set to increase as costs go up. Then you throw in the uncertainty over the US/Iran war and higher oil prices.
Goldman Sachs energy strategists led by Daan Struyven: After falling to near zero in the early days of the war, flows through the strait had recovered to roughly 10 million barrels per day in early July. As of July 15, those levels had fallen back near 3 million to 5 million barrels per day, with further losses ahead. The setback now leaves the oil market short 13.4 million barrels per day of oil from the Gulf.
On Friday, crude oil futures (*CLQ26) traded up to 83.76 from 67.05 on 07/02/26, or just 10 trading sessions.
My AI ES levels had the high and close to the low, but at the end of the day, it's really not the levels; it's how you use them.
It doesn't matter if you are a long-term investor or a short-term scalper. The markets seem to be evolving quickly, and as I have said in the past, I think it's all new AI bots that are throwing gas on the algos and HFT systems.
They say AI bots only make up about 10% of the volume, but as more people build AI trading systems, they will start to eat away volume from the algos and HFT, which I think we are already seeing.
As the summer wears on and we head into the fall, the midterm elections are going to push volatility to higher levels.
Our lean: The war is hitting new levels of destruction, oil rallied to $82.00+, and notes and bonds were higher, but I do not think this thrashing is over. The NQ is down 4.29% over the last 5 days. Can they rally? Sure, they do almost every day. Can they hold the rallies? I don't think so, but I also think it's important to pay attention to a headline that says the US and Iran are going back to the negotiating table. Trump may be saying we are going to blow up Iran, but as long as this goes on, the worse it is for the Republicans in the midterms.
$ES AI Market Profile Levels for 7/20/26
It was another wild day in the trading jungle, with the ES trading in a 7539.00 to 7483.25 Globex trading range and Friday's 9:30 ET regular session open at 7482.25, down 91.75 points or -1.23%.
After the open, the ES traded up to 7492.25, sold off 19.25 points down to 7473.00, and then rallied 66.00 points up to 7539.00 at 10:15, 1 point away from my AI market profile resistance level.
The ES sold off 34.25 points down to 7504.75 at 11:15, rallied 32.00 points up to a 7536.75 lower high at 12:00, sold off 20.25 points down to 7516.50 at 12:15, rallied 22.00 points up to another lower high at 7538.50 at 12:45, and sold off 40.75 points down to 7497.75 at 2:28.
The ES rallied up to 7511.75 at 2:45, sold off 25.50 points down to 7486.25 at 3:20, rallied up to 7505.50 at 3:49, and traded 7505.25 as the 3:50 cash imbalance showed NYSE 1.8 billion to buy, S&P $2.2 billion to buy, and Nasdaq $800 million to buy. The ES traded down to 7497.00 on the 4:00 cash close.
After 4:00, the ES traded in a 3- to 4-point range and settled at 7497.75, down 80.25 points or -1.06%, or down 127 points in the last 2 sessions.
The NQ settled at 28,773.25, down 452.50 points or -1.55%, or down 1,017 points or -3.45% in the last 3 sessions. The YM settled at 52,375, down 411 points or -0.78%, down 748 points or 748 points -1.44% in the last 2 sessions. The RTY settled at 2,973.50, down 17.20 points or -0.58%, or down 18.30 points or -0.62% in the last 2 sessions.
In the end, my lean was correct: big down, big rally, and then the late Friday risk-off weakness. In terms of the ES’s overall tone, all 4 of the indices had big rips but turned weak late. In terms of the ES’s overall trade, volume was the largest in 11 sessions, at 1.598 million contracts traded.
The MOC opened with a strong $3.7 billion buy imbalance across all markets. Buy orders totaled $6.0 billion against $2.3 billion for sale, producing a decisive +72.1% dollar lean. The symbol lean was less forceful at +59.4%, with 409 stocks showing buy imbalances and 279 showing sells. That combination suggested concentrated institutional buying rather than a complete market-wide sweep.
The S&P 500 carried a $3.4 billion buy imbalance with a +72.5% dollar lean and +63.2% symbol lean. The NYSE showed $2.4 billion to buy, while Nasdaq opened with a $1.2 billion buy imbalance and a wholesale-style +70.2% dollar lean.
The imbalance faded steadily after the opening print. It declined to $3.4 billion at 15:52, $2.4 billion at 15:53, and $1.4 billion by 15:55. Sell orders briefly accelerated to $4.8 billion at 15:58, cutting the net imbalance to just $235 million at 15:59. The final cross recovered slightly, finishing near $570 million to buy at 16:00.
Sector flow was broadly positive. Basic Materials posted a wholesale +100.0% symbol lean, while Energy reached +78.7%, Materials +71.1%, and Industrials +84.0%. Information Technology attracted the largest gross buying at $1.3 billion, but $647.4 million in sells reduced its net imbalance to $646.9 million. Financials showed strong dollar demand but a rotational -50.5% symbol lean, while Real Estate registered a -51.9% symbol lean.
MU led individual buys at $220.1 million, followed by MSFT at $163.4 million, NVDA at $154.8 million, META at $145.5 million, and FIX at $142.9 million. Major sells included CSCO at $94.9 million, NVR at $91.1 million, CRM at $82.2 million, HON at $74.2 million, and A at $66.4 million.
Technical Edge
Daily Breadth Data 📊
For Friday, July 17, 2026
NYSE Breadth: 32% Upside Volume
Nasdaq Breadth: 33% Upside Volume
Total Breadth: 33% Upside Volume
NYSE Advance/Decline: 35% Advance
Nasdaq Advance/Decline: 36% Advance
Total Advance/Decline: 36% Advance
NYSE New Highs/New Lows: 151 / 45
Nasdaq New Highs/New Lows: 146 / 280
NYSE TRIN: 1.15
Nasdaq TRIN: 1.14
Weekly Breadth Data 📈
For Week Ending Friday, July 17, 2026
NYSE Breadth: 48% Upside Volume
Nasdaq Breadth: 44% Upside Volume
Total Breadth: 45% Upside Volume
NYSE Advance/Decline: 53% Advance
Nasdaq Advance/Decline: 39% Advance
Total Advance/Decline: 44% Advance
NYSE New Highs/New Lows: 296 / 119
Nasdaq New Highs/New Lows: 445 / 510
NYSE TRIN: 1.25
Nasdaq TRIN: 0.82
BTS Levels - (Premium Only)
Today’s Important Economic Events
DTG Room Preview – Monday, July 20, 2026
Market Tone
US equity futures are steady but remain highly sensitive to geopolitical and earnings headlines.
Market breadth is narrow, with leadership rotating away from mega-cap technology.
The tone is cautious rather than fully risk-off, with traders waiting for Big Tech earnings to set direction.
Volatility remains contained but could expand quickly if the current range breaks.
Geopolitics and Oil
Crude oil has moved above $90 amid concerns over disruption through the Strait of Hormuz.
Escalation in the US–Iran conflict could push transportation and manufacturing costs higher.
Sustained oil strength may support energy stocks while pressuring technology and consumer sectors.
Higher crude prices could complicate the Fed’s disinflation outlook.
Big Tech and AI
Big Tech earnings are the market’s next major catalyst.
Investors want confirmation that earnings can support elevated valuations and restore index leadership.
The NQ is especially vulnerable to sharp downside if results disappoint.
AI-related companies need to show accelerating revenue growth to justify current multiples.
TSMC’s strong multi-year AI chip outlook remains supportive for semiconductors.
Memory constraints, power demand, and rising infrastructure costs remain risks to tech margins.
Earnings and Economic Calendar
Ryanair reported a 34% decline in profit as higher fuel costs weighed on results.
The US economic calendar is light.
Conference Board Leading Index: 10:00 a.m. ET.
Volatility and Positioning
The ES five-day average daily range increased to 79.75 points from 63.75.
Geopolitical headlines and political developments could inject additional volatility.
Overnight large-trader activity was light and mixed.
There is no clear whale bias.
ES Technical Outlook
Friday’s selloff broke the short-term uptrend channel, creating a bearish near-term signal.
The ES closed below its 50-day moving average at 7535.25.
The 50-day average is likely to act as initial resistance.
A recovery back into the prior two-week range could turn the level back into support.
Failure to recover leaves the door open to a retest of the 7400s.
Key Levels
Resistance: 7586–7591, 7621–7626, 7732–7737, 8145–8150
Support: 7170–7175
