2/12/26 Recap

The SPY is losing big levels today, not only did we lose the 21 ema but we’re losing the 50 day for the second time in a week. You could feel something was wrong the last few days/weeks when we seemingly couldn’t make new highs. You have metals all crashing again, we have CPI in the morning tomorrow and people are scared. Of course a good CPI could reverse all this but this is not looking good right now and if you’re disciplined, you would lighten up alot if things under the 50 day. The SPY had been holding up best the last 2 weeks in the tech wreck, but it is spilling over now with sectors like the XLE that have led all year down nearly 2%. We have a long weekend coming up with a holiday monday and if CPI is not taken well by the market tomorrow things could get very ugly. Just be careful, under the 50 day isn’t where you want to be pressing things. These breakdowns trigger the VIX to spike and you get all sorts of chaos.

Tech remains the big problem as the QQQ was coming into the downtrend line and just turned lower without even testing it. I mentioned the other day this looked like a giant bear flag and here it is breaking lower. That’s the problem with even trying to be bearish, it just squeezes you to the last second and then it breaks down which is why I really never bother buying puts but try to understand when the market is in a period of weakness and just be mindful of the leverage I’m using. This is now a series of lower highs and I still think that 200 day below at 580 is getting tested. It doesn’t have to make sense but things like Coca Cola are breaking out to new highs while names like Amazon are falling to lows on strong prints. It’s just a massive rotation to defensive names right now and trying to fight it is futile.

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