Following are my personal comments on specific markets and issues. I chart markets for a hobby and my comments are the result. They are not recommendations to buy or sell anything and should not be thought of as such. They are for entertainment purposes only so enjoy.
Please remember, the following is pure speculation based only on my experience and chart patterns. "Every sunken ship has a room full of charts."
David Bruce Edwards
Feb. 14, 2026
Note - I got a new wider screen monitor and when I look at this web site with the screen size in full, the site spacing does not come out properly. By making the window less wide all of the text and graphics slide into place. Perhaps you are having the same experience. DBE.
As usual, I will show pictures and graphs found on Zerohedge.com, Sentimentrader.com, which include the Seasonality charts and charts made on Barchart.com. I will also mention "cycle low timing bands" suggested by another market website to which I subscribe, Cyclesman.com.
The Street is back to watching government statistics with numbers on inflation and employment getting most of the attention.
On February 5th, the JOLTs report surprised markets with a big drop in job openings over the last two months (upper left). There are now more people looking for work than there are jobs available. Revelio Labs, a private jobs tracking company that has recently become popular reported a 13,270 drop in jobs last month (upper right) and Challenger and Gray said that corporations announced 108,435 layoffs in January, one of the higher monthly tallies in the last few years. Following these releases there was a lot of discussion about the economy slowing and that maybe the "no hire, no fire" outlook is shifting toward the "fire" side of the phrase.
AI was directly blamed for some of the cutbacks. It is likely that it is having an indirect affect too. If you think your competitor will be cutting their costs using less workers due to AI, you are going to be cautious about hiring even if you can't find that much savings by using AI applications.
On Wednesday we got the delayed (from Friday the previous week) monthly jobs number for January. The consensus forecast was for a gain of around 60,000 jobs. The official number came in at 130,000, however, this is a seasonally adjusted number (left). The non-seasonally adjusted number was a huge 2.649.000 jobs lost for the month, one in which stores layoff a lot of temporary Christmas help. Analysts would have been more skeptical but the Household part of the survey, where data collectors call homes around the country and ask about their employment situation, showed a very healthy gain in full time jobs. Nearly all of 2025's monthly jobs numbers were revised lower in the next month's report. Analysts expect this one to be reduced too.
The labor force participation rate ticked up slightly (left) but the number of weeks it is taking for unemployed workers to find a new job also rose (right side). Health Care added 82,000 jobs while social assistance jobs increased by 42,000. Construction was also positive, adding 33,000 positions.
On Thursday morning we got the latest on New Claims for Unemployment. They failed to confirm a gloomy jobs outlook with the number at 227,000, in the middle of the range of results over the last couple of years. Continuing claims and the four week average of new claims rose a bit but are still low by historical standards.
On Friday we got the latest Consumer Price Index data. The headline number (left) rose 0.2% month over month and the year over year fell to 2.4%. The Core reading (right) that takes away food and energy was up 0.239% in the last month and 2.5% for the year. A decline in Energy prices (down 1.5%) accounted for much of the better than expected rate of inflation while the sub-component for rent and shelter (up 0.2%) was the largest upward input. Electricity prices hit an all time high. The inflation numbers were good but not great. If the target is 2%, we are still not there yet. The Street was looking for higher numbers due to last January's experience. A lot of services contracts, such as insurance, are repriced every January. In 2025 there were significant increases but not this year.
With most of the improvement in the inflation numbers coming from motor fuel costs it is worth looking at the prices of gasoline and heating oil, a proxy for diesel, in February to see if the low CPI reading will carry into next month's data. The pink rectangles highlight this month's prices. With the odds of a strike on Iran and their promises of retaliation increasing, energy prices rose. This goes against President Trump's desire to lower fuel prices for consumers and with midterm elections approaching this could be why President Trump is (so far) favoring negotiations and intimidation over military action.
Last week there was talk of lowering tariffs on industrial metals such as copper, aluminum and steel. This is likely election related with the White House hoping that by next fall, lower inputs for industry will filter through to lower costs on consumer items and take the "Afford-ability" issue off the table for Democrats. Steel companies like Cleveland-Cliffs hit the skids.
This shift from Make America Great to Look Better for the Elections is likely to show up in other areas. In my corner of the country we have the state of Maine that has a large Somali migrant population and with it a big increase in criminal activity over the last decade. Earlier this year, ICE was going to surge the state but backed off at the request of Republican Senator Susan Collins who is up for reelection. She knew that Democrat funded groups were hoping to turn Maine streets into a Minneapolis type confrontation to help her Democrat opponent.
Retail Sales (left) were unchanged in December after a big surge in November. Data from credit card companies shows that a lot of Christmas shopping was charged to Credit cards. President Trump and others in the administration have been talking up the big tax refunds that many workers will see this spring. It is likely that consumers decided to buy now and use the refunds to repay balances on credit cards. Wal-Mart stores came close to a previous high because of the same anticipated refund money. Has the Wal-Mart benefit to tax refunds also been priced into the stock for now?
The upper right graph tracks Retail Sales adjusted for changes in the Consumer Price Index and they are flat for the year. People are spending more money but buying around the same number of items. Demographers say that our population is falling. Deportations reduce the free money circulating in the system and with the aging Boomer Population moving into a more conservative spending phase of life, retail sales should be subdued.
Existing home sales fell 8.4% in January, the biggest drop since February of 2022. Cold weather was not to blame since paperwork for these purchases was signed in the previous two months and also because most of the drop off was from the western part of the country that did not have cold weather. Home builders had a good few weeks due to slightly lower longer term interest rates and talk of a federal program to build a million "Trump Homes." These would be smaller houses that would be built without much of the added state regulation to make them politically correct. In my state of Massachusetts, there is a move to forbid new construction that uses natural gas or heating oil to keep owners warm. Industry special interest groups have been successful in many states at getting their "green" gadgets and additions legislated into construction costs, making homes more expensive.
In past updates I wrote about the automatic flows into S&P 500 Index funds and questioned what would cause investors to trade out of them. Above are charts of the S&P 500 on the left and RSP, an equal weighted version of the S&P 500 stocks on the right. The S&P 500 is capitalization weighted with Nvidia accounting for 7.17%, Apple 6.06%, Microsoft 4.81% and Amazon 3.44%. Below are graphs for them. I put green dashed lines on the RSP graph labled X,Y,Z. Each rally leg was shorter. Poor relative performance by the S&P 500 could be the reason investors look elsewhere.
One could argue that the sell off in these companies is over done and they are ripe for a bounce, however that was true a week ago too.
For the last two weeks we saw extremely violent sell offs in different industry groups that are in danger of being replaced by AI Agents. IGV is an ETF that tracks American software companies. Until recently this was a strong group that was thought to be a beneficiary of AI because they could bring their customers their expertise, bolstered by AI. Then, people realized that you could just ask AI to do the same thing for you without paying the big bucks to hire an independent software firm. Analysts argue that these companies still offer customers advantages that they are not likely to realize on their own but the question is, at what price?
I got my licenses to be a broker for stocks, options and commodities in 1980. Schwab was a relatively new discount broker offering commissions that were a fraction of what my company charged. Within a few years, other discount brokers opened and Wall St. commissions collapsed. Many firms didn't survive. Last year, I heard an interview with an officer of a job recruitment firm. He said that Wall St. companies were hiring AI engineers to replace well paid analysts with AI so that they could cut their costs. Last week, investors realized that with AI, you cannot just get rid of the analysts, you can get rid of the company that employs the analyst. Who needs to enlist the services of a human when AI can do it better and right from your phone at home.
KIE is an insurance company ETF. If AI can analyze your needs and suggest products to protect you, why pay an insurance company or consultant? On top of that, we now have Prediction Markets that price the probability of events in real time. They are thought to be more accurate than polls or other methods in giving the latest real time odds of certain events taking place. Analysts say that taking positions in Prediction Markets can in many instances replace insurance and at a much cheaper price.
Technology has always been self consuming. A few weeks ago, executives on earnings calls were telling investors that they plan to use AI to cut staff and costs and raise productivity and profits. Now they are finding out that their business models and reasons for existence are being undercut from the technology they thought would make them rich.
What are the hot stocks? Anything to do with building out physical plant and equipment. Caterpillar is the absolute winner because its equipment is used in construction and in mining. It is also the second most weighted stock in the Dow Jones Industrial Average, accounting for 9.63% of its move on a daily basis. Microsoft makes up 4.99% and you can see what it has done lately above. On Tuesday of last week, Caterpillar closed at $742.37. On Wednesday it finished the day at 775. Did anything in the real world change fast enough to justify a $32.63 price change in the stock (4.39%)? No. It reminds me of the big price moves we saw at the end of the silver rally. Just for fun I included a silver chart next to the Caterpillar graph.
Goldman Sachs is the most heavily weighted stock in the Dow Jones Industrials, accounting for 11.26%. Along with Caterpillar's 9.63% these two issues are 20.89% of the daily movement of the Index. Microsoft is another 4.99% and The Home Depot adds another 4.86%. Goldman Sachs topped out last month and was hit with the same worries that tanked Schwab, last week. The Home Depot did OK lately but unless home sales pick up, it is limited. The point is that Caterpillar accounts for an oversized part of the recent gains in the Dow Jones Industrials. If the market senses that we are at "peak stimulus" measures from the government or unrealistically peak cap ex spending from the private sector or if the Supreme Court rejects the current tariff justification, Caterpillar could follow silver's example along with the Dow Jones Industrials.
Two of the best performing ETFs are thought to be beneficiaries of the current tariff policy and government debt funded industrial policy. On the left is XLI the SPDR Industrial sector ETF. Once again, Caterpillar is at the top of the list and you can see the blow off type pattern it is making. The other companies are a mix of industrial and defense names. XLB focuses on Materials suppliers. Linde is huge in industrial gases, especially those used in welding. Newmont is the big gold mining firm and Freeport mines gold and copper. CHR is a building materials company with a big market share of the cement, asphalt and concrete business. Aside from the Supreme Court ruling against tariffs, the danger to these groups is that much of the energy behind our current industrial policy rests with an 80 year old President and a legislative branch that knows he has only 3 more years. Last week, the House of Representatives voted against the President's tariffs on Canada. It seemed like a small event but it could be the first crack between a very strong President and politicians who are now more worried about being reelected than they are the anger of a soon to be lame duck, President Trump. If the polls continue to turn against republicans, the tariffs and industrial policy behind the gains in these companies is in danger.
The NASDAQ 100 is back to September's levels with Microsoft leading the losses. SMH, the hot chip ETF is also stalling. There are constant reports of memory chip shortages. Often, markets top on reports of never ending shortages. Note that Nvidia is the most heavily weighted issue in the ETF. Amid a spat over funding a few weeks ago, Open AI's leader Sam Altman said that Nvidia's chips were the best for training AI models but now that this phase is mostly done, the semiconductors from other companies are more essential.
Taiwan Semi makes most of the extremely sophisticated chips and seems to have a lock on the business yet it faltered a bit last week after another very positive news release. Over the last few years, most countries announced subsidies and incentives for chip manufacturing. Are we at "peak chip shortage?"
Bonds had a good week as rates dropped a bit across the curve. Investors weighed the inflation evidence and liked what they saw, despite the probability that the energy component of the CPI will be higher next month. There were mixed results on last week's bond auction with a 3 year issue doing well but longer dated maturities not enthusiastically bought. The right side graph shows the path of rates on the world's most tracked debt instrument, the U.S. Ten Year Note. From their high in 2023 rates traded sideways. Mortgages are priced off of the ten year so a continued decline is essential in loosening up the housing market for the spring selling season.
I read a lot of opinions on markets. There is a great divergence on what is going to happen in the currency markets with very smart people calling for a continued decline in the Dollar and equally intelligent analysts looking for a stronger Dollar. The same is true for the Euro and the European economy. There are predictions for disaster and others for a real recovery in the Euro zone based on defense spending and borrowing with the proceeds going to industrial stimulus, following the Trump Administration's play book.
Some of the best analysts I read are saying that interest rates in Japan are rising to levels that will kill its economy. Others say that rates in Japan are normalizing and that Japan is reinvigorating itself.
From a purely chart perspective, the Dollar could be making a complicated sideways formation with an up phase coming into this summer. Russia recently floated the idea that a truce in Ukraine could come with a readmission of Russia into the SWIFT payments system which would be bad for the theory that BRIKs countries are dedollarizing.
Gold didn't do much over the last two weeks. The sell off can be counted as 9 waves down,an impulse pattern. Usually these are followed by another down move. On the right is a graph of gold in NY. Each bar is a week. Arrows mark 18 week trading cycle lows as theorized by Cyclesman.com. The timing band for the next one is late February and early March.
On the left is a weekly bar chart from 1980. After the first sell off, gold consolidated for a few weeks before another fall.
One can make the chart pattern case that silver is consolidating in a contracting formation that will lead to another thrust down. Last week I read a report about how backed up silver refining is with months of supply sitting on receiving docks waiting to be melted, purified and delivered into major exchanges in the coming months. Where did the shortage go? On the right is a graph comparing platinum, palladium and gold prices. They are moving in lock step. Are you aware of any new technology that is going to use massive amounts of platinum and palladium next year? The spike higher in metals allowed producers to lock in very profitable prices for future delivery of metals and that will be used to expand output.
Above are graphs of crude oil and Exxon. Many of the other major oil companies are very popular too but Exxon is leading the way. Smart analysts continue to say that oil is the next gold or silver. Investors in the energy patch are not waiting for the spike higher. Exxon is a well run company generating a huge profit but like Caterpillar, does its future justify the extraordinary surge higher?
Best Guesses -
Stocks - I am still cautious. Rarely have I heard market commentators as bullish as they were last week. The S&P 500 has gone nowhere since October. It could be that cold, gray days and too much New England snow are making me more pessimistic than I should be, however, I sense that we are at peak stimulus from both the private sector and in government programs. We could be nearing peak Trump influence too. There is no Trump backup quarterback in the locker room. Watch Caterpillar in particular. It is the poster stock for our current market.
Bonds - We had a good week at the track last week. Borrowing needs are only escalating. Google alone sucked up $20 billion last week. Credit spreads are near all time lows. What could go wrong?
Dollar - Cycles are bottoming. If my charts are right, we should be in an up phase.
Gold and Silver - I would like to see another sell off into the Cyclesman.com's 18 week cycle low timing band which is due late this month into early March.
Commodities - Grains looked a bit better last week. Industrial metals and softs (coffee and sugar) were down. If all this government stimulus can't pump them up then what will, aside from war?
Oil - War with Iran or no war? I wrote that two weeks ago and we are still waiting for an answer.
Best of luck,
DBE