EB Daily Market Report - Brief Update - Thursday, February 12, 2026

The range-bound trading continues. There's really not a whole lot to report, though a couple of our cautious signals have perhaps worsened. The S&P 500 gained ground in recent sessions after holding support at 6797. But then yesterday, after nearly reaching 7000 again, the selling has kicked back in. This simply underscores the importance of the short-term trading range from 6797 to 7000.

The action in consumer stocks is concerning. We've seen discretionary stocks sold off all day after a quick gap higher in early trading. Meanwhile, consumer staples (XLP) has seen the exact opposite day, with buying mostly since the opening bell. Here's what these two sectors look like today on a 5-day 10-minute chart:

The poor rotation between discretionary and staples hasn't changed and that's not a good sign.

The four sectors gaining ground are all defensive, led by utilities (XLU, +2.24%). The other 7 sectors are lower, led by technology (XLK, -2.50%). Because of the recent surge in the XLK, that sector was able to distance itself from critical support in the 134-136 area. On the bounce, it nearly reached 145, but has now dropped back into the 130s. Keep an eye on that 134-136 support zone. If that's lost, then the S&P 500 most likely will lose support at 6797, bringing 6500-6525 into play.

The Volatility Index ($VIX, +13.88%) has jumped back above 20.00, another concerning development in the near-term. The bulls will be tested one more time and, as I mentioned yesterday, next week's historical tendencies are not favorable. That doesn't guarantee us lower prices, it simply means that there's one more concerning signal.

I believe we're going to see significant choppiness in the next several months and we're going to need to be able to negotiate it - before the secular bull market returns in full force sometime later this year. Capital preservation will be key for much of 2026, in my opinion. Let's just be on our toes.

Happy trading!
Tom