Macro Measure - February 13, 2026

Market Rebellion Macro Measure - February 13th, 2026 - Summary

Key Concepts:

• Defcon Shields: A preparedness strategy for market downturns, indicating a more cautious approach to positioning.
• Turnaround Tuesday: A recurring observation of market reversals often occurring on Tuesdays.
• AI Damage Fallout Trade: The potential negative impact of rapid AI development on various sectors and market stability.
• Turbulence Butt: A descriptor for the current market state characterized by conflicting signals and uncertainty.
• Gamma Positioning: The impact of options trading activity on market volatility and price movements.
• Left Tail Risk: A measure of downside risk, indicating increased demand for protective measures.
• Buybacks: Corporate repurchase of their own stock, a factor influencing market performance.
• Presidential Cycle: The observed tendency for market performance to vary based on the year within a president's four-year term.

I. Market Overview & Last Week’s Performance (February 6th - 12th, 2026)

Wayne began by reviewing the previous week’s predictions, acknowledging they were significantly off-target. He anticipated stronger follow-through from Monday’s bounce, expecting the IWM (iShares Russell 2000 ETF) and SPY (SPDR S&P 500 ETF Trust) to approach all-time highs, but this did not materialize. The SPY reached 69714, just below its all-time high of 69784, while the IWM peaked under 269, compared to its high of 27160 – roughly 1% away from their respective peaks. He noted that the lack of sustained momentum was a key warning sign, particularly after a strong initial bounce. Friday saw some significant moves in individual stocks triggered by options activity, but these gains weren’t broadly reflected in the major index ETFs. Despite initial optimism, the market ultimately leaned towards a “not well” scenario by week’s end.

II. Current Market State: “Turbulence Butt”

Wayne characterized the current market as being in a state of “turbulence butt,” highlighting the conflicting forces and lack of clear direction. He emphasized the dramatic potential across various sectors but also the swirling balance of opposing forces. He stressed the importance of adaptability in short-term trading due to the unpredictable nature of the market.

III. Key Factors & Observations

• AI Impact: The “AI damage fallout trade” is expanding beyond software, impacting various sectors. Concerns are growing about the accelerating pace of AI disruption, potentially exceeding initial expectations.
• Defensive Sector Strength: Defensive sectors (e.g., utilities, consumer staples) are performing well, indicating risk aversion among investors.
• Yields & Bond Market: The TNX (10-year Treasury Note Yield) is rolling over, suggesting a potential shift of capital into bonds and rising bond prices.
• VIX Activity: The VIX (CBOE Volatility Index) ended the week with a pulse, signaling increased market uncertainty and potential for volatility. The VIX close was stronger than the previous week.
• Seasonal Weakness: The back half of February and September historically represent weaker periods for the market. 2026 is also a presidential election year, which tends to be the worst performing year in the four-year cycle.
• Market Breadth: While not atrocious, market breadth is flashing risk-off signals, with defensive sectors outperforming.
• Buyback Impact: Corporate buybacks have cooled off recently but are expected to pick up over the next six weeks, potentially providing support.

IV. Technical Analysis & Chart Review

Wayne reviewed key charts, focusing on:

• SMH (VanEck Semiconductor ETF): Remains resilient but exhibits a potential double-top pattern. A break below the 20-day SMA could trigger further selling.
• XLC (Communication Services Select Sector SPDR Fund): Showing weakness and approaching key support levels. A break below support could lead to a more significant decline.
• SPY: Holding trend but at a precarious juncture, close to key support levels. The close was weaker than the previous week.
• IWM: Also holding trend, but Wayne felt fortunate to have exited positions.
• Q's (Nasdaq 100 ETF): Near the 150-day moving average, with a slightly higher low put in on Friday.

V. Sentiment & Positioning

• Bearish Sentiment: The AI survey showed a significant spike in bearish outlooks, a potentially contrarian indicator.
• Short Interest: Short interest in tech stocks has increased, also a potentially contrarian signal.
• Institutional Behavior: Wayne speculated that large players may be hesitant to commit significant capital due to uncertainty and a lack of confidence in the market’s direction.
• Wayne’s Positioning: He is maintaining a light position, primarily holding metals as a hedge, and has long VIX call spreads. He is waiting for more clarity before making substantial commitments.

VI. Concluding Remarks & Outlook

Wayne concluded that the market is “teetering” and that the coming week is crucial. He emphasized the potential for both a resumption of the breakdown or a bounce. He advised traders to remain prepared (“Defcon Shields” at the ready) and to have downside protection in place. He noted the importance of adapting to changing market conditions and adjusting positions accordingly. He expressed concern about the lack of a strong finish to the week and the potential for further weakness, particularly given the historical seasonal patterns and the uncertainties surrounding the AI narrative. He anticipates a potentially volatile week ahead, especially with the President’s Day holiday adding an extra day of uncertainty.

Notable Quotes:

• “Something’s not right if there’s little followthrough.”
• “It’s very hard to get it right all the time.”
• “The market is teetering…you have to be a little more concerned.”
• “You have to trade with one eye on the exit until you really feel like you’ve hooked it.”

Data & Statistics:

• SPY All-Time High: 69784 (reached 69714 this week)
• IWM All-Time High: 27160 (reached under 269 this week)
• Average Yearly Drawdown (NDX - last 30 years): 21% (current drawdown: 22%)
• VIX Close: Relatively strong close at 15.34 (as of 4:00 PM EST)

Synthesis:

The market is currently in a precarious state, characterized by conflicting signals and heightened uncertainty. While defensive sectors are showing strength, key growth sectors are exhibiting signs of weakness. The accelerating impact of AI and the upcoming presidential election cycle add to the complexity. Wayne advocates for a cautious approach, emphasizing the importance of adaptability, downside protection, and a willingness to adjust positions based on evolving market conditions. The coming week will be critical in determining whether the market can sustain its recent gains or is poised for a more significant correction.