Tuesday, February 17, 2026

Earnings … Empire State Manufacturing … NAHB Housing Index … Momentum Trading DOW Stocks & ETFs … Stock Market Analysis

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.” - Peter Lynch, former manager of Fidelity’s Magellan® fund.
   
"This is maybe the most dangerous market of my career, and that includes 1987's crash, that includes the savings and loan debacle market of the early '90s, that includes the 1999 to 2009 lost decade in the S&P 500 in the dot-com bubble. This is the most difficult market of my 45 years." -  Bill Smead, Smead Value Fund (SMVLX), May 2025.”
 
EARNINGS UPDATE (FACTSET)
“At this late stage of the Q4 earnings season, the S&P 500 is reporting solid results. While the percentage of S&P 500 companies reporting positive earnings surprises is below recent averages, the magnitude of earnings surprises is in line with recent averages. As a result, the index is reporting flat earnings for the fourth quarter today relative to the end of last week but higher earnings for the fourth quarter today relative to the end of the quarter. The S&P 500 is now reporting double-digit (year-over-year) earnings growth for the 5th straight quarter.” Report at…
 
AI BOTS BULLYING HUMANS (WSJ)
“Scott Shambaugh woke up early Wednesday morning to learn that an artificial intelligence bot had written a blog post accusing him of hypocrisy and prejudice…The bot that criticized Shambaugh said on its website that it has a “relentless drive” to find and fix open issues in open-source software. It isn’t clear who—if anyone—gave it that mission, nor why it became aggressive, though AI agents can be programmed in a number of ways. Several hours later, the bot apologized to Shambaugh for being “inappropriate and personal.” … Shambaugh said in an interview that his experience shows the risk that rogue AIs could threaten or blackmail people is no longer theoretical. 
“Right now this is a baby version,” he said. “But I think it’s incredibly concerning for the future.” Story at…
My cmt: One of the engineers quoted in the article said he could do the work of 50 engineers using AI tools.
 
BRACE YOURSELF FOR AI (WSJ)
“He [Matt Shumer, an AI executive and investor] pushes back on the argument that we’ll ride through this automation as we always have in the past…Legal work? “AI can already read contracts, summarize case law, draft briefs, and do legal research.” Financial services? AI is “building financial models, analyzing data, writing investment memos, generating reports.” Medicine? It’s “reading scans, analyzing lab results, suggesting diagnoses, reviewing literature.” Customer service? “Genuinely capable AI agents . . . are being deployed now, handling complex multi-step problems.”
“If your job happens on a screen (if the core of what you do is reading, writing, analyzing, deciding, communicating through a keyboard) then AI is coming for significant parts of it.” … His advice? Get in and adapt now. Learn how to use AI “seriously,” not as a search engine.” – Pegy Noonan, WSJ Opinion Columnist. Opinion at…
 
EMPIRE STATE MANUFACTURING (RTT News)
“The New York Fed said its general business conditions index edged down to 7.1 in February from 7.7 in January, but a positive reading still indicates growth…Looking ahead, the New York Fed said firms continue to be optimistic about the outlook, with the index for future business conditions climbing to 34.7 in February from 30.3 in January.” Story at…
 
NAHB HOUSING INDEX (NAHB)
“Persistent affordability challenges, including high housing price-to-income ratios and elevated land and construction costs, helped push builder confidence lower for the second straight month to start the year.
Builder confidence in the market for newly built single-family homes fell one point to 36 in February, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index…” Report at…
 
-Tuesday the S&P 500 rose about 0.1% to 6843
-VIX declined about 1.5% to 20.29.
-The yield on the 10-year Treasury rose to 4.062% (compared to about this time prior market day).
 
MY TRADING POSITIONS
XLK – SOLD 2/11/2026
SPY – Added 12/1/2025.
NVDA – Added 12/1/2025 & 2/6/2026
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
At the close today, of the 50-Indicators I track, 12 gave Bear-signs and 8 were Bullish. The rest are neutral. (It is normal to have a lot of neutral indicators since many of the indicators are top or bottom indicators that will signal only at extremes.)
 
TODAY’S COMMENT
The daily, bull-bear spread of 50-indicators declined from -2 to -4 (4 more Bear indicators than Bull indicators), a NEUTRAL indication. I consider +5 to -5 the neutral zone. The 10-dMA curve of the spread (purple on the chart above) that smooths daily fluctuations continued down, a BEARISH sign.
 
The S&P 500 is 0.7% below the 50-dMA so the markets didn’t clear much today from a price perspective.
 
Levels of support are the 100-dMA and the 200-dMA: The S&P 500 is 0.4% above the 100-dMA and 5.1% above the 200-dMA.
 
The S&P 500 is only 1.9% below its all-time high, but that is in part because the bearish rising wedge remains. Until that clears, I am cautious.
 
Since I don’t anticipate a big decline, I do not plan to reduce stock holdings further unless indicators collapse.
 
BOTTOM LINE
Given the indicators and chart, I am Bearish for the short term.
 
ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:
 
The top ranked ETF receives 100%. The rest are then ranked based on their momentum relative to the leading ETF.
*For additional background on the ETF ranking system see NTSM Page at…
DOW STOCKS - TODAY’S MOMENTUM RANKING OF THE DOW 30 STOCKS (Ranked Daily)
 
 
The top ranked Stock receives 100%. The rest are then ranked based on their momentum relative to the leading Stock.
For more details, see NTSM Page at…
TUESDAY MARKET INTERNALS (NYSE DATA)
My basket of Market Internals declined to HOLD. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.) 

 

 

 
 
My invested position is about 55% stocks, including stock mutual funds and ETFs. 50% invested in stocks is a normal, conservative position for a retiree. (80% is my max stock allocation when I am confident that markets will continue higher; 30% in stocks is my Bear market position.)
                                              
I trade about 15-20% of the total portfolio using the momentum-based analysis I provide here although I don’t trade as much as I used to. When I see bullish signs, I add a lot more stocks to the portfolio, usually by using an S&P 500 ETF as I did back in October 2022 and 2023.
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