Weekly Market Intelligence Brief — Feb 15 2026
🎭 Theme of the Week: Market Tops are Processes
Back-and-forth volatility and sector rotations are normal toward the end of cycles and during topping processes, with increased chop and swings reflecting uncertainty rather than a straight-line decline.
Increased volatility (VIX ~20.6 on Feb 13) signals potential impending regime change, as markets digest AI disruption fears amid otherwise resilient macro data.
At this stage, it remains unclear exactly where we are in the topping process—rounding top formation with potential neckline tests possible—but choppy action and defensive rotations suggest caution without confirming a full breakdown.
📰 Key Market Influencing News (Last Week)
Tech sector under heavy pressure from AI disruption fears extending beyond software into logistics, insurance, wealth management, and other areas, contributing to Nasdaq’s 2.1% weekly drop and the worst week of 2026 for major indexes.
January CPI came in cooler than expected (inflation slowed to ~2.4%), providing some relief on Friday but failing to spark a strong rally as AI jitters dominated sentiment.
Stronger jobs data reduced near-term Fed cut expectations, adding to volatility in growth stocks while supporting a flight-to-quality in bonds, utilities, and defensives.
Broader market saw rotation to “old economy” sectors (utilities, real estate, staples, materials) outperforming amid AI fatigue and choppy trading, with S&P 500 down ~1.4% and Dow ~1.2% for the week.
🏛️ Stock Quadrant Overview
🟢 Accumulation
AWK +60.5 → Utilities/infrastructure demand surge amid defensive rotation.
LYV +59.1 → Entertainment sector resilience in risk-off flows.
VST +56.6 → Energy/utilities strength on reflation bias.
AMT +55.8 → Tower/infrastructure plays benefiting from rotation.
NXPI +55.4 → Semis selective accumulation despite sector pressure.
🔵 Rotation into Position
CDNS +19.8 → Design software inflows on AI-adjacent stability.
CEG +13.5 → Clean energy rotation amid cyclical themes.
DDOG +12.5 → Cloud monitoring gaining on defensive tech bids.
BBIO +10.9 → Biotech nibbling amid healthcare defensives.
PGR +9.7 → Insurance positioning in volatility uptick.
🟡 Rotation out of Position
ED -10.3 → Consumer staples trimming after defensive run.
PNC -10.4 → Regional banks facing rotation pressures.
PBF -10.4 → Refiners outflows on energy volatility.
AME -10.6 → Industrials seeing profit-taking.
KBE -11.1 → Banking sector rotation out amid macro caution.
🔴 Liquidation
SCHW -63.8 → Brokerage heavy selling on financials weakness.
WFC -61.0 → Major banks liquidated amid AI disruption fears.
MDT -59.8 → Healthcare devices under broad risk-off.
SHAK -57.9 → Consumer discretionary sharp unwind.
ORA -55.2 → Renewables pressure in rotation shift.
📊 ETF Quadrant Overview
🟢 Accumulation
EWC +44.7 [🚀] → Canada equities inflow on commodity/reflation tailwinds.
FXY +39.8 [🚀] → Yen safe-haven accumulation amid global caution.
IEF +39.4 [🚀] → Intermediate treasuries bid on flight-to-quality.
VIX +27.8 → Volatility products surging with market chop.
GLD +27.3 → Gold as hedge in overvaluation/risk-off regime.
🔵 Rotation into Position
ETHA +6.9 → Ethereum rotation amid crypto selective interest.
ARKK +1.1 → Innovation basket nibbling on dips.
MGK +0.3 → Mega growth cautious inflows.
🟡 Rotation out of Position
XOP -1.6 → Oil & gas exploration trimming.
XLI -1.8 → Industrials outflows on cyclical caution.
EWJ -1.8 → Japan equities rotation pressure.
OIH -2.0 → Oil services seeing exits.
XLP -2.2 → Staples modest rotation out after defensive strength.
🔴 Liquidation
XRT -50.1 → Retail sharp unwind on discretionary fears.
SPY -46.8 → Broad market ETF heavy liquidation.
IBB -42.3 → Biotech liquidation amid healthcare rotation.
VOO -40.4 → S&P 500 ETF under broad selling.
XLF -34.5 → Financials sector heavy outflows.
🌐 Macro Regime & Valuation Context (Feb 13 2026)
📈 Market Valuation Index (MVI) – Medium- to long-term valuation view:
SPY -0.78 🔴 | QQQ -1.1 🔴 | IWM -1.61 🔴 → all red, medium-term overvaluation; small-caps most stretched.
💹 Medium-Term Risk ON/OFF – Medium-term flow & positioning:
Bull 51.2% 🟢 + Health_bull 46.4% 🔴 → mixed signal with bullish tilt but weakening breadth.
⚠️ MVI vs. Medium-Term Risk ON/OFF Discrepancy:
In a healthy market both are aligned in a bullish way; MVI can diverge from Medium-Term Risk ON/OFF, but this is a clear bubble warning sign that will require resolution through stock market correction, lower interest 10Y TSY rates or higher earnings.
🌤️ Seasons – Short- to medium-term leadership & composition:
Reflation 60.0% 🟢 (Goldilocks 54.6% 🟢) → dominant short-term risk-on with cyclical bias; examples include commodities/infrastructure accumulation.
Macro Regimes (Seasons) need to align as well but can lag for a while in a healthy market; divergence = increased risk.
🔄 Portfolio Rotation (LgCaps) – Short- to medium-term flow dynamics:
Rotation out of Position: 16.1% 🟡 dominant → still bullish but careful trimming; SPX around recent highs hides profit-taking.
Cross-context ⚡:
Short-term reflation leadership with defensive accumulation contrasts against medium-term mixed gamma (bullish tilt but fading breadth), long-term overvaluation, and topping process signals via increased volatility and chop; back-and-forth action typical in late-cycle regimes, but regime change risks rise with VIX elevation and rotations.
Conclusion 🎯:
Monitor for regime shift amid topping process uncertainty; maintain selective long bias in defensives/reflation themes (gold, treasuries, utilities), reduce exposure to stretched growth amid elevated volatility and overvaluation.
Quick Glossary
bull% — Positioning & Flow Trend Indicator (full explanation + live charts: https://reflectionsofreality.substack.com/p/access-to-our-bull-charts)
MVI — Market_Valuation_Index or Equity Valuation Pressure Index (full explanation: https://reflectionsofreality.substack.com/p/market_valuation_index)
Medium Term Risk ON/OFF — Avg. lg. Cap Price Positioning within the Call-Put-Frontier Range
Medium Term Risk ON/OFF: Health — lg. Cap Market Breadth of medium term Machine Learning model
Macro Regimes — “Seasons”: Goldilocks: Strong growth, low inflation → best: stocks/tech/credit | worst: USD/vol/gold Reflation: Rising growth, rising inflation → best: cyclicals/commodities | worst: bonds/defensives Stagflation: Weak growth, high inflation → best: defensives/gold/vol | worst: equities/credit Deflation: Contracting growth, falling inflation → best: bonds/USD | worst: stocks/commodities
Legend
[🚀] = Bull Trendfollowing Triggered (only in Accumulation if bull% >70%)
🟢 + 🟡 = Risk-On | 🔴 + 🔵 = Risk-Off
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