Stock Market Outlook for February 18, 2026
Bonds Moving Higher While Stocks Freeze: A Shift Is Underway
*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities. As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends.
Stocks Entering Period of Seasonal Strength Today:
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Dollarama Inc. (TSE:DOL.TO) Seasonal Chart
Portland General Electric Co. (NYSE:POR) Seasonal Chart
iShares Currency Hedged MSCI EAFE Small-Cap ETF (AMEX:HSCZ) Seasonal Chart
Disclaimer: Comments and opinions offered in this report are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered is believed to be accurate, but is not guaranteed.
The Markets
Stocks closed little changed on Tuesday in a rather erratic session as the market navigates into the notorious volatility mountain that typically springs up in the back half of February. The S&P 500 Index added a tenth of one percent, continuing to trade below horizontal resistance at 7,000. A slight negative skew remains with highs fixed around aforementioned resistance and lower-lows recorded since the year began. Nothing extreme has developed, yet, and the benchmark remains within arm’s reach of the all-time high charted less than two weeks ago. Threats remain for a downside resolution to 6730, or the mid-December lows, particularly through the period of seasonal weakness for stocks that is average at this time of year. The character of the market seems to have shifted where levels of resistance (at least on this tech heavy benchmark) are holding greater weight than levels of support. Looking to trim equity exposure in this backdrop, until resolved, has become prudent, pulling back the elevated levels of exposure that were held through the Santa Claus rally period and into the first month of the year, bracing for the kind of volatility that is average through the next few weeks. In the Seasonal Advantage Portfolio that we manage for clients at CastleMoore, we have taken action to align with the risks that are creeping into the market ahead of this average mid-February peak in stocks, but, we have not been enticed, yet, to abandon our pro-cyclical and commodity oriented stance that has been flourishing this year. Themes in our chart books to either Accumulate or Avoid continue to gear towards the trends that are working and intact.
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Today, in our Market Outlook to subscribers, we discuss the following:
- Market Backdrop: Stalling Beneath 7,000
- Seasonal Volatility Is Taking Control
- Overbought Cyclicals: Risk of Digestion
- Defensive Rotation Strengthening
- Downgrades Reflect Rising Caution
- New Avoid Candidate
- Portfolio Strategy: Defensive Barbell
- Our List of all Segments of the Market to Either Accumulate or Avoid
- Other Notes
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Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.93.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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