Market Insights: Friday, February 13th, 2026

Market Overview
US stocks gave up early gains on Friday to close mixed, capping a volatile week marked by sharp losses and mounting fears surrounding AI disruption. The Dow Jones Industrial Average rose 0.1%, while the S&P 500 finished just above the flatline and the tech-heavy Nasdaq Composite fell 0.2%. Despite the muted close, all three major averages ended the week in negative territory, with the Dow and S&P 500 down more than 1% and the Nasdaq off more than 2% over the past five sessions. The market’s inability to hold intraday strength reflected persistent caution as investors weighed a cooler-than-expected inflation reading against broader concerns about earnings durability and structural disruption across industries.

Inflation data from the Bureau of Labor Statistics showed consumer prices rose 0.2% in January from the prior month and 2.4% on an annual basis, both softer than expected. The report revived some expectations for a June rate cut, with a growing majority of traders now anticipating at least a quarter-point reduction by midyear and still projecting two cuts by the end of 2026. However, the cooler print was not enough to generate sustained buying interest, as the Federal Reserve’s path remains complicated by a labor market that, while slowing, has not collapsed. The result was a classic “sell the rally” session, with early optimism fading into the close.

AI disruption fears continued to ripple beyond traditional technology sectors. What began as software weakness has now spilled into wealth management, transportation, logistics, and real estate — industries previously viewed as relative safe havens from AI volatility. All seven of the Magnificent Seven megacaps finished lower on the day, underscoring persistent pressure on leadership stocks. Analysts described the environment as a “bull market in disruption hysteria,” noting that while initial reactions may be exaggerated, markets are currently pricing in aggressive downside risk across multiple business models.

Earnings reactions remained mixed and contributed to intraday volatility. Applied Materials surged after issuing an upbeat outlook tied to robust AI infrastructure demand, while Pinterest tumbled on weaker revenue and concerns about AI’s impact on its discovery platform. Rivian soared more than 25% following a strong quarterly report and positive commentary on its upcoming R2 model launch, and Moderna jumped roughly 10% after beating revenue expectations on resilient vaccine sales. Despite these pockets of strength, broad risk appetite remained muted heading into a shortened holiday week, with markets set to close Monday for Presidents’ Day.

SPY Performance
SPY opened at $681.57 and briefly attempted a push higher, reaching an intraday high of $686.28 before momentum faded. Sellers regained control into the afternoon, driving price back toward the mid-range before stabilizing. SPY closed at $681.61, up just 0.05% on the day, on elevated volume of 85.92 million shares. The session reflected indecision, with both sides testing control but neither able to secure a decisive breakout. Price remains below the critical $685 level, keeping near-term pressure tilted toward the bears despite the flat close.

Major Indices Performance
The Nasdaq declined 0.22%, the Dow gained 0.10%, and the Russell 2000 rose 1.19%, showing relative strength in small caps. The divergence suggests selective rotation rather than a full risk-on reversal, with technology still facing persistent headwinds.

Notable Stock Movements
It was broadly a red day across the Magnificent Seven, led lower by Apple, which fell 2.27%. Tesla and Netflix were the only exceptions, with Netflix up as much as 1.33%. Continued weakness across leadership names remains a key risk factor; sustained selling in both megacap technology and crypto would likely signal deeper market pressure.

Commodity and Cryptocurrency Updates
Crude oil was essentially flat at $62.86, up 0.03%. Our model has been forecasting crude moving toward $60 for several months, and while further downside is possible, holding above $56 keeps the door open for a rally back toward $70. Gold climbed 2.14% to $5,054, reflecting renewed hedging interest. Bitcoin surged 4.80% to close above $68,900, recovering from recent lows and stabilizing sentiment within crypto markets.

Treasury Yield Information
The 10-year Treasury yield fell 1.39% to close near 4.047%. In our framework, yields above 4.5% pressure equities, above 4.8% typically precede sharper selloffs, and moves above 5% signal significant equity risk. The current decline in yields provides some relief but reflects growth concerns rather than aggressive risk-taking.

Previous Day’s Forecast Analysis
Thursday’s framework warned that below $685, selling bounces would be favored and that acceptance under that level would intensify the battle between bulls and bears. We emphasized the likelihood of trending downside action with intermittent chop.

Market Performance vs. Forecast
Friday unfolded largely in line with that view. SPY remained below $685, briefly rallied into resistance near $686, and then rotated lower, forming a large intraday doji and confirming indecision within a bearish structure. The inability to reclaim $685 keeps near-term control tilted toward sellers.

Premarket Analysis Summary
In Friday’s premarket notes published at 8:20 AM, SPY was trading near $679.15 with a bias level at $681. Upside targets were outlined at $683, $685, and $688, while downside levels were set at $678.50, $675.50, and $673. We cautioned that volatility from CPI would likely define early direction.

Validation of the Analysis
The session validated that roadmap. SPY reclaimed the $681 bias early and pushed toward $686 but failed to sustain momentum, reversing into a sell-the-rally pattern. Downside support near $677.50 held, preventing further breakdown, but the broader range between $675 and $685 remains intact.

Looking Ahead
Monday is a market holiday, with no major economic releases scheduled Tuesday. Wednesday brings FOMC Minutes, followed by Unemployment Claims Thursday and GDP, PCE, and PMI on Friday. With a three-day weekend ahead, geopolitical developments remain a wildcard.

Market Sentiment and Key Levels
Sentiment remains cautious and range-bound. Resistance sits at $684, $687, $688, and $690, while support rests at $680, $679, and $675. Reclaiming $685 is necessary to shift near-term control back to the bulls.

Expected Price Action
SPY’s projected maximum range for Tuesday is $670 to $692, with the Put side dominating in a steady but wide band that suggests trending price action with intermittent chop.

Trading Strategy
We favor shorting rallies into $687–$689 and failed breakouts above $689. Dip buying should focus on failed breakdown setups near $680 and $675 rather than aggressive bottom fishing. Remain flexible and aligned with structure.

Model’s Projected Range
SPY’s projected maximum range for Tuesday is $670 to $692, with the Put side dominating in a steady but very wide band that suggests trending price action with intermittent chop. Monday is a holiday with no news scheduled on Monday or Tuesday, but a three-day weekend is a long time and geopolitical events can easily disrupt the markets come Tuesday. Today CPI came in better than expected, which helped the market recover from yesterday’s steep decline, although by the end of the day SPY was basically unchanged, closing up just 0.07% at $681.75. It could have been much worse as the session began with an attempt to test $675, stalling at $677.50 before recovering sharply. However, it turned into a sell-the-rally day, and once SPY reached $686, it peaked and sold off during the final two hours to close essentially flat. The market has now rotated back into the $675 to $685 range where it has spent much of the past few months, allowing the bears to remain engaged. Today was another strong trending session and given the size of projected moves, Tuesday is likely to deliver similar multi-hour directional swings. Overnight the market moved lower, breaking the prior day’s lows. By the open SPY was just below $682 and a quick flush to retest the overnight lows held. For several hours SPY recovered nicely and pushed back above $685, briefly suggesting the bulls might reclaim control. But that was not to be, as SPY formed a double top at $686 and then sold off for two hours into the close, printing a large doji on the daily chart. With SPY now below $685, the battle between bulls and bears intensifies and near-term direction becomes far less certain. The long-term bull trend remains intact above $640, but new highs are off the table for Tuesday without an external catalyst. February once again proves to be a difficult month for longs, as we warned for several weeks. Historically, February brings sharp selloffs, and those dips should be used to position for a spring and summer rally. As long as price holds above key structural levels, this remains a broader dip-buying environment. That said, swing and intraday traders must stay focused on positioning and dealer flows, which are currently skewed short. Over the long weekend, bulls must reclaim $685 to regain near-term control. Even if reclaimed, that does not signal an all-clear, as dealers are positioned for weakness up to $689. The $690 to $692 zone is likely to be heavy chop and resistance before any clean directional resolution. The good news for bulls is that $680 appears heavily supported by dealers and may serve as at least a temporary low for Tuesday. Should $680 fail, the next stop is $675 where a bounce is likely. Absent a catalyst, resistance sits at $684, $687, $688, and $690, while support rests at $680, $679, and $675. We favor shorting rallies into $687 and failed breakouts, especially above $689. Dip buying should be approached cautiously, with preference given to failed breakdown setups at $680 and $675. Crypto rallied strongly today and is close to reclaiming $70K. All MAG stocks declined with the exception of Tesla and Netflix, which were modestly higher. If something more ominous is developing, sustained weakness across both leadership groups will continue to lead a broader market pullback. VIX fell 1.06% to 20.60, still signaling risk-off conditions and hovering near bearish territory. SPY closed well below the bull trend channel from the April lows, with structural resistance now near $691, and another day below the channel will likely force the model to redraw the trend.

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended the session in wide Ranging Market State with SPY closing in the lower end of the range above MSI support. There were no extended targets at the close with only a few in the late morning as price reached the day’s highs. But these faded quickly and the MSI failed to continue rescaling higher which led to a sell off from the highs. Overnight the MSI rescaled lower in a wide bearish state with extended targets below but these too stopped printing and SPY reversed from MSI support and by 10 am had begun a series of rapid rescalings higher which again, led to the day’s highs. But by the afternoon, the MSI rescaled to its current ranging state where it remained for the rest of the session. For Tuesday the MSI is forecasting prices which will likely test both ends of the days range with mainly chop. MSI resistance is $684.32 with support at $680.49.
Key Levels and Market Movements:
Thursday we stated, “the bulls want to reclaim $685 to regain control,” and added, “even above $685, its likely to be a sell the rally market on Friday,” while also noting, “Below $690 sell all rallies.” With the MSI opening in a very wide bearish state, the trade was to sell MSI resistance to MSI support, which happened very quickly after the open and delivered a massive first win for those who took it. That was followed by a textbook failed breakdown long off MSI support, setting up a second trade back to MSI resistance with multiple targets overhead as the MSI rescaled higher. But once $685 was reached, just as we stated yesterday, it became a sell-all-rallies day, and as soon as extended targets stopped printing and the MSI stopped rescaling higher, the double top provided a perfect short entry back down the range. An easy day to read and trade with at least three substantial setups, all identified by using proper context with patience and flexibility, leveraging the MSI, premarket levels, and market structure together to guide execution rather than forcing trades. The MSI continues to prove its reliability as the cornerstone of our trading process.
Trading Strategy Based on MSI:
Tuesday has no news and Monday is a holiday, but with a three-day weekend anything can happen so traders should be prepared to trade what they see. Over the weekend the bulls want to reclaim $685 to regain control and put the bears back to sleep. Even if $685 is reclaimed, it is likely to remain a sell-the-rally market up to $689, as there is a fairly heavy wall of resistance above that level. Below $689, sell all rallies and be cautious buying dips until $675 is reached. Absent an external catalyst, Tuesday is likely to see trending price action with a downside push toward $675. If $685 is reclaimed, $689 is the likely peak where we expect bears to contain price once again. The long-term bull trend remains intact above $640 and failed breakouts and failed breakdowns continue to offer the highest-probability setups. Remain flexible, avoid trading during Ranging Market States, and ensure all trades are fully aligned with MSI signals. Providing real-time insights into market control, momentum shifts, and actionable levels, the MSI when integrated with our Pre-Market and Post-Market Reports continues to sharpen execution precision and elevate trade quality. If you haven’t yet integrated MSI and our model levels into your process, now is the time. Contact your representative to get started as these tools are designed to support consistency and enhance performance.

Dealer Positioning Analysis

Dealers are selling SPY $685 to $715 and higher strike Calls while buying $682 to $684 Calls indicating the Dealers’ desire to participate in any relief rally on Tuesday. The ceiling for Tuesday appears to be $687. To the downside, Dealers are buying $681 to $600 and lower strike Puts in a 3:1 ratio to the Calls they’re selling/buying displaying some concern that prices could move lower. Dealer positioning is unchanged from neutral/slightly bearish to neutral/slightly bearish.
Looking Ahead to Next Friday:
Dealers are selling SPY $696 to $715 and higher strike Calls while buying $682 to $695 Calls indicating the Dealers’ desire to participate in any rally next week. The ceiling for the week appears to be $700. To the downside, Dealers are buying $681 to $575 and lower strike Puts in a 6:1 ratio to the Calls they’re selling/buying, reflecting a market that is concerned about lower prices. For the week Dealer positioning is unchanged from bearish to bearish. We advise reviewing Dealer positioning daily for directional clues. These positions evolve quickly and tracking them is essential for staying ahead of shifting market sentiment.

 Recommendation for Traders
Into next week, respect the range and the bearish tilt below $685. Favor selling failed bounces and remain cautious with dip buying until price confirms structural support. Maintain discipline, monitor dealer positioning daily, and allow MSI signals and market structure to dictate execution rather than emotion.

Good luck and good trading!