Advisory Swing and Options Trader for the Week of 2-23-26

Running in Place… But Under the Surface, It’s a Different Story

Last week was uneventful—at least on the surface.

Most of the major indices moved less than 1%. The tape looked quiet. But the day-to-day action told a different story. Attempts to move lower were just as frequent as attempts to move higher. That kind of back-and-forth keeps traders second-guessing and investors hesitant.

We’ve been in this environment since late last year—an environment where uncertainty doesn’t explode into panic, but it also doesn’t allow trends to breathe.

Let’s put it into perspective.

Year-to-date:

• S&P 500: up just under 1%
• Nasdaq 100: down just under 1%

That’s essentially running in place.

But beneath that flat index, performance is a meaningful divergence:

• Transportation Index: up ~14%
• Russell 2000: up ~7.5%
• Dow Industrials: up ~3.5%

That’s rotation.

Growth Has Quietly Been in a Bear Market

A deeper dive shows something more important.

While some indices have held together, entire growth pockets have been under serious pressure:

• iShares Expanded Tech-Software Sector ETF (IGV)
• First Trust Dow Jones Internet Index Fund (FDN)
• Staffing & outsourcing stocks
• Bitcoin-related equities

Many of these names are down 50% or more from their late-2025 peaks.

The AI-driven reshuffling is not done. Leadership fractured. Capital left crowded trades and forced repricing in software and internet names.

However—and this matters—the worst-hit stocks are no longer collapsing at the same pace. That loss of downside momentum is often the first step toward stabilization.

Will it form a base?
Or is this just a pause before another leg lower?

We’ll know soon enough.

One high-odds bottoming pattern to watch in extended downtrends is the downside shakeout:

• Consolidation
• Violent flush lower (wide-range bar or cascade of red candles)
• Immediate reversal back into the range

That pattern removes weak hands and clears supply. If we see it, that becomes actionable.

Nvidia: The Center of Gravity This Week

All eyes now turn to NVIDIA Corporation (NVDA), reporting Wednesday after the close.

NVDA has been hovering near the top of its trading range—an area where it has previously failed. But the price action suggests institutions are leaning bullish ahead of earnings.

If it breaks out, there’s a tradable void above.

A decisive move higher could:

• Lift the Nasdaq 100
• Reignite semiconductor leadership
• Potentially mark a turning point in beaten-down tech

If it fails?
Expect pressure to return quickly.

Given NVDA’s weight and psychological influence, this is not “just another earnings report.”

Other Key Earnings This Week

The calendar is full of market-moving names:

Monday

• Dominion Energy (D)
• Domino's Pizza (DPZ)
• ONEOK (OKE)
• Diamondback Energy (FANG)
• Keysight Technologies (KEYS)

Tuesday

• Home Depot (HD)
• Constellation Energy (CEG)
• MercadoLibre (MELI)
• HP Inc. (HPQ)
• Workday (WDAY)

Wednesday

• NVIDIA Corporation (NVDA)
• Snowflake Inc. (SNOW)
• Zoom Video Communications (ZM)

Thursday

• Salesforce (CRM)
• Intuit (INTU)

Software has already been weak. These reports could either stabilize that group or accelerate deterioration.

The Trump Effect (Again)

Last week’s major headline: the Supreme Court ruling against the Trump administration’s global tariffs.

Markets did pop on the headline, but context matters.

The broader indices opened lower and reversed higher before the news broke. That tells us positioning already anticipated the ruling.

You could see it in the tape:

• SPDR S&P Retail ETF (XRT) spiked, then faded.
• ProShares UltraShort 20+ Year Treasury (TBT) jumped, then retraced.

In other words, movement, but not conviction.

Geopolitically, tensions in the Middle East remain elevated amid the U.S.–Iran standoff. Meanwhile, crude oil and gasoline prices are more than 20% off their recent lows.

Oil services ETFs:

• VanEck Oil Services ETF (OIH)
• SPDR S&P Oil & Gas Equipment & Services ETF (XES)

Both are up over 30% this year—and show no signs of exhaustion.

That’s real relative strength.

Economic Crosscurrents

Last week’s data was mixed:

GDP came in weaker than expected.

PCE inflation held near 3%.

FOMC minutes revealed division: some members leaning toward hikes, others toward cuts.

The bond market still leans toward cuts.

The Fed says “not so fast.”

Somebody will blink.

S&P Sector ETFs – Daily Charts - To See a Larger Image,

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S&P Sector ETFs – Weekly Charts - To See a Larger Image,

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S&P Sector ETFs – Sorted by Weekly Percent Change This Week

Last week’s percentage changes.

The percentage changes tell you which sectors were the strongest or weakest on Friday and for the week, month, quarter, and year.

There are seven columns after the percent changes in the sector listed above.

You can see the ETFs that are the strongest getting stronger or weakening.

• Close above or below the 20-MA.
• Close above or below the 20-MA 5 Days Ago. C>20 -5
• Close above or below the 50-MA.
• Close above or below the 50-MA 5 Days Ago. C>50 -5
• 20-MA above or below the 50-MA.
• 20-MA is pointed up, and the close is above the 50-MA

If you step back and remove the noise, the answer is simple:

We’re still in a range.

The S&P 500 has been trading between approximately 6800 on the bottom and 7000 on the top, with 6900 acting as the midpoint magnet for months. Last week, prices moved from the lower end of that range back toward the middle.

Now the obvious question:

Can it push back toward the top?

The Bullish Case

Friday gave us something meaningful.

The S&P 500 opened lower and reversed higher into the close, forming a bullish wide-range bar.

That’s not random.

When a gap down produces a bullish wide-range bar, it tells us institutions were willing buyers below the open. That type of candle doesn’t form by accident.

Master Trader Tip:
When a gap down results in a bullish wide-range bar, the bar's bottom becomes short-term significant support. In an uptrend, that low is a logical place to raise stops.

That one candle increases the probability that the top of the range is believable.

Not guaranteed.
Believable.

The Reality: Still a Range

Technically, the broader charts do not suggest a major directional move is imminent.

Breadth continues to oscillate around zero.
Sentiment has leaned more bullish, which can provide a floor.
Internals are neutral.

That combination does not scream “breakout.” It suggests continued erratic movement.

The market has been rotating more than trending.

Under the surface, we continue to see divergence:

• Small caps and Transports have shown relative strength.
• Software and Internet groups remain in structural downtrends.
• Defensive sectors like Staples and Healthcare have attracted capital.
• Energy continues to benefit from rising crude.

Nvidia Is the Pivot Point

The market’s center of gravity this week is clear:
NVIDIA Corporation (NVDA).

NVDA is sitting near the top of its range heading into earnings.

If it breaks out:

• The Nasdaq 100 likely follows.
• Semiconductors regain leadership.
• The S&P 500 has a strong probability of testing 7000.

If it fails:

• Software weakness may accelerate.
• The recent rotation into laggards may stall.
• The S&P could rotate back toward 6800.

This is not just an earnings report. It’s a potential catalyst.

Options Expiration Is Behind Us

Last week was expiration week, which often suppresses momentum as dealers hedge large open-interest strikes.

That restraint is now gone.

In the last five options expirations, the S&P 500 was higher the following week. That’s not a guarantee—but it’s a tendency worth respecting.

With hedges unwound, markets are “freed” to move.

Whether that move is up or down will likely depend on:

• Nvidia’s earnings
• Core PPI later in the week
• Ongoing rate-cut expectations

The Broader Backdrop

We’re seeing:

• GDP slowing
• Inflation sticky but not accelerating
• Fed members are divided
• Geopolitical tension influencing energy prices

Despite that, indices are holding.

That tells us institutions are not aggressively distributing stock. But they are not aggressively expanding risk either.

The chart above shows the Dow Jones Industrial Average through the lens of Master Trader Technical Strategies (MTS).

Last week, the Dow barely moved — finishing up roughly +0.25% — and traded entirely inside the prior week’s range. That is classic contraction. When a market compresses like this after an advance, it is not random… it is storing energy.

The trend is still up.

• The 20-day moving average is rising.
• The 20-MA remains above the 50-MA.
• Pullbacks continue to find buyers.

That alignment maintains the intermediate trend.

However, let’s not ignore the bigger picture.

The Dow is roughly where it was two months ago.

Despite strong rallies, wide-range bars, and attempts to break higher, price has not meaningfully expanded. That tells us demand and supply are closer to equilibrium than headlines might suggest.

What the Chart Is Really Saying

Over the last several weeks, we’ve seen:

Wide-range bars (+WRBs)

Topping tails near pivot highs

Minor shakeouts that held support

Erratic day-to-day movement

That combination communicates uncertainty — not distribution, but not expansion either.

It’s a market that wants to move but hasn’t decided which side wins.

For the Dow to reassert leadership:

• It must clear recent pivot highs convincingly.
• It must close above them — not just gap above and fade.
• It must expand range and follow through.

If that occurs, new all-time highs are quickly within reach.

The narrowing distance between the 20- and 50-MAs also suggests a contraction phase nearing resolution. Compression resolves with expansion. The only question is direction.

The Dow is not breaking down.

It is not breaking out.

It is coiling.

As long as it remains above the rising 50-MA, the trend bias remains up. A break below shifts the conversation quickly.

For now, this remains a “wait for confirmation” chart — and in this environment, confirmation is everything.

Money Management for Trading and Investing

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