Frothy Market Selling The Great Earnings News

Good Thursday Morning, MPTraders! July 16, 2026-- Pre-Market Update: 

-- In the past 24 hours, two technology powerhouses, ASML and TSM, reported much better-than-expected Earnings, but in BOTH CASES, investors have pummeled their respective stocks (coming days after the debacle in IBM). 

Although the indices have not violated major support so far, this behavior under the hood makes me "technically nervous" that the dominant uptrend patterns are weakening within a developing sell-the-great Earnings-news" set-up in an increasingly frothy market. 

In other words, overlaid by continued geopolitical headline risk, it is time for all of us to rethink our levels of market exposure, position sizes, and portfolio concentration in big technology in particular...

Now for some chart setups:

TSM (Taiwan Semi)-- Despite extremely strong Earnings (see Seeking Alpha snippet below), the stock has nosedived nearly 5%, slicing beneath initial support lodged in and around 400, which morphs the mid-May-to-present chart pattern into a potentially significant near-term Top. To neutralize the price deterioration, TSM needs to climb and sustain above 418; otherwise, the stock will remain vulnerable to a continuation lower, pointing to a test of the dominant 15-month uptrend line that cuts across the price axis near 370 (see my attached 4-Hour Chart, and scroll down to charts of ASML and IBM)...

ASML has NOT smashed below its critical near-term support plateau from 1680 to 1710, and remains in the grasp of a high-level digestion area that will prove to be EITHER a bullish continuation setup, OR a June-July near-term distribution top. As long as the support plateau remains intact, the ASML bulls have reason to hold their position, for now... Last is 1781.19...

IBM has pressed into the mid-point of my optimal, extremely oversold target window of 203 to 215 ahead of a potential recovery rally that projects to 230-240. As I am typing this update, IBM has made a new low at 210.31. At the moment, the price action that has resulted in a decline of nearly 40% since the 6/01/26 ATH at 341.00 remains a falling knife, but one that has developed an acutely oversold condition amid near-term positive Momentum divergences that indicate a recovery rally is approaching quickly. Anyone who wants to scalp and capture a violent bounce should use calls, with stops on the calls if IBM breaks 203... Last is 210.53...