The most significant news of the week occurred on Friday when the Supreme Court’s decision was released striking down President Donald Trump’s use of emergency powers to impose tariffs. The betting markets had predicted a 74% chance of the same.
The Court said that Trump went too far without Congressional approval.
Trump was quick to announce new tariffs so the issue is definitely not dead. Trump was furious with the ruling, ridiculing all who disagreed with him in his Trump fashion, and said he would introduce a new 10 - 15% global tariff under different laws.
The decision will only add uncertainty, particularly since the Court was silent on how to refund tariffs of about $129 billion illegally collected. This decision will also increase government debt, which explains the pop in Treasury yields.
Trade-sensitive stocks rallied after the Supreme Court’s ruling at 10 ET. Retail stocks (XRT) had a wild intra-day swing. Costco (COST), however, one of the leading plaintiffs seeking refunds, was down 0.5% on Friday.
In other news, the artificial intelligence (AI) and private credit fears still exist as shown by volatility in those stocks. Cybersecurity software companies fell on Friday after Anthropic introduced a new security feature into its Claude AI model. The Global X Cybersecurity ETF (BUG) fell 4.9% and closed at its lowest since November 2023.
OWL and other private credit firms also fell on credit fears.
The Fed minutes for its prior FOMC meeting were released last Wednesday, which turned more hawkish (i.e., a more restrictive monetary policy bias). Although there was broad agreement to not cut for some time, several members noted that they would have preferred language that kept rate hikes explicitly in play if inflation remains high.
The Fed said that downside risks to employment had moderated, while the risk of inflation persist. That was confirmed by Friday’s PCE (the Fed’s preferred inflation gauge) coming in at around 3%, a 0.4% increase in December.
In other economic news, U.S. GDP (the value of all goods and services produced across the economy) rose at a 1.4% seasonally and inflation adjusted annual rate in the final quarter of last year, much weaker than the 2.5% estimates.
The political drama continues with a partial government shutdown which starting on 2/14 over funding of Department of Homeland Security and ICE. Many employees, including TSA workers, are now working without pay.
Over the weekend, DHS shut down Global Entry and TSA PreCheck at U.S. airports which will undoubtedly spread the anger amongst Americans arising out of government gridlock. A winter blizzard in the northeast will not help as thousands of flights will be cancelled or delayed.
Nevertheless, for the week, the S&P, Dow, and Nasdaq gained 1.1%, 0.3% and 1.5%, respectively. The IWM closed flat.
Other big potentially big market moving news events are NVDA’s earnings this Wednesday and Trump’s self-imposed deadline on whether or not Trump will order strikes against Iran.
Nothing changes in how we operate. We will continue to trade the same price patterns, manage risk the same way, and let the market—not opinions—tell us when opportunity is present.
If you're not in the Green Room with us, log in to YouTube, Facebook, or Twitter to get our pre-market review at 9 AM ET. If you can't make it, you can view the recording.
Good trading and enjoy the day off on Monday for President’s Day.
TREND MATRIX
The Trend Matrix Continues to have mixed messages.
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.
S&P Sector ETFs – Sorted by Weekly Percent Change
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
Use Coupon Code - Candles
Other ETF Sectors – Sorted by Weekly Percent Change
See the Video Below
VIDEO REVIEW OF ETF SECTORS - Click lower right to open Full Screen.
NEW ETF TRADE IDEAS
2/23: SPDR Gold Shares (GLD) – Over $468.62, consider buying the ETF. Breakout at the 20-MA, bullish +1234 weekly. Stop $440.34.
2/23: State Street SPDR S&P Regional Banking ETF (KRE) - Over $71.93, consider buying a half lot of the ETF. Bullish retest of Buy Setup and reversal at the 20-MA, bullish weekly/monthly. Stop $68.50 (50-MA).
Dan will be presenting this Thursday, February 26th, at 2:15 ET, at Traders Corner’s Stock & Options Investor’s Summit, where he will teach you how to trade stocks and options on a Simple, Powerful “Igniting Pattern.” Register- CLICK HERE
OPEN AND CLOSED ETF POSITIONS WITH TRADE UPDATES (NOTE: Also in Member's Area in Open/Closed Trade Sheet)
2/20: Global X Robotics & Artificial Intelligence ETF (BOTZ) – Bought the ETF at $39.03. Breakout all time frames. Move Stop $37.36 (50-MA).
2/9: Pacer US Small Cap Cash Cows Index (CALF) – Consider buying a ½ lot of the ETF on a pullback between $46.40 – 46.60. +WRB Breakout to all-time highs at the 20-MA. Stop $44.54.
2/9: Global X FinTech ETF (FINX) – Bought a 1/2 lot of the ETF at $24.75. Climactic Buy Setup and +180 reversal on +Vol. 2/21: Buy a ½ lot over $24.15. Stop $22.09.
2/13: iShares Bitcoin Trust ETF (IBIT) – Bought a ½ lot of the ETF at $38.73. Climactic Buy Setup and +180 reversal on +Vol. 2/14: Buy ½ over $39.38. Stop $33.46.
2/23: SPDR Gold Shares (GLD) – Over $468.62, consider buying the ETF. Breakout at the 20-MA, bullish +1234 weekly. Stop $440.34.
2/13: iShares Expanded Tech-Software Sector ETF (IGV) – Bought a ½ lot of the ETF at $83.94. Climactic Buy Setup and +180 reversal on +Vol. 2/13: Bought ½ at $83.18. Stop $76.48.
2/9: iShares US Aerospace & Defense ETF (ITA) – Over $235.38, consider buying the ETF. Buy Setup and reversal at the 20-MA, bullish weekly/monthly. 2/13: Bought ½ at $237.04. 2/21: Move Stop $233.35.
2/9: Invesco S&P 500 Eql Wght ETF (RSP) – Bought the ETF at $202.50. +WRB Breakout to all-time highs at the 20-MA. Stop $196.24.
2/2: State Street Real Estate Select Sector SPDR ETF (XLRE) - Bought a 1/2 lot of the ETF at $41.53. Buy Setup and reversal at the 20/50/200-MA, bullish weekly/monthly. 2/9: Bought ½ at $41.91. 2/17: Sold 1/2 at $46.80. 2/21: Move Stop $42.11 (20-MA).
1/28: State Street Utilities Select Sector SPDR ETF (XLU) – Bought a 1/2 lot of the ETF at $43.56. +WRB Breakout of a bottoming pattern at the 20/50-MA. 2/10: Bought ½ at $43.88. 2/13: Sold 1/3 at $45.86. 2/21: Move Stop $44.13 (20-MA).
Master Trader and You Building Your Financial Future Together!
Happy trading! If you have any questions or comments, please e-mail Greg Capra at Greg@mastertrader.com or Dan Gibby at Dan@mastertrader.com
All the best,
Greg Capra Managing Director of Master Trader
Dan Gibby Chief Options Strategist
NOTE: Master Trader will show the opening and closing prices of all stock and options trades. We recommend that all traders and investors use proper share sizing for both position sizing and money management. However, we cannot recommend what that is for your particular trading style, risk tolerance, or account balance. We urge you to calculate your own share/position size based on your individual risk parameters, Trading Plan, and familiarity with the proposed trade strategy and associated risks. Advanced Management Strategies (AMS) covers in detail the foundation and advanced position and money management.
NOTE: Master Trader and its representatives may have existing positions in actual or other trade recommendations before or after those suggested herein. Additionally, we may manage them differently for internal purposes based on different risk parameters than noted herein. All trade ideas and content are for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, option, or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds. Significant gaps or volatility can increase these losses, particularly for short option strategies. Investment or trading information provided may not be appropriate for all investors, and is provided without respect to individual financial sophistication, financial situation, investing time horizon or risk tolerance. Supporting documentation for any claims (including claims made on behalf of options programs), comparison, statistics, or other technical data, if applicable, will be supplied upon request. Master Trader Consulting, Inc. is not a licensed financial advisor, registered investment advisor, or a registered broker-dealer. Options, futures, and futures options are not suitable for all investors.
