February 23, 2026

Preview from my weekly report*

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War fears cloud the short-term outlook but major trends remain bullish.

• US Stock indexes in medium-term consolidations: Prices have been going nowhere in sideways trading ranges for several months. This trendless price action is likely to resolve in the direction of the dominant trend, to the upside.
• Global stock markets remain in major uptrends for the long term.
• A-D Line bullish: The Cumulative Daily Advance-Decline rose to another new all-time high on Friday, again confirming the uptrend for the full list of NYSE stocks.
• Net New Highs bullish: Highs minus Lows rose to 337 on Wednesday 2/11/2026, the highest level in 52 weeks.
• Smaller stocks bullish: Relative strength has continued to favor smaller, less-glamorous stocks, which are included on the unweighted S&P 500 Equal Weight ETF (RSP) and the S&P 400 MidCap ETF (MDY)--both made new closing-price highs on Friday 2/20/2026. The Russell 2000 ETF (IWM) rose to a new high on 1/22/2026 and has been consolidating previous gains, moving sideways while staying near that high.
• Dow Theory bullish: The Dow Theory again confirmed the major bull market trend this month, when both the Industrial Average and the Transportation Average rose to new all-time, closing-price highs.
• Select Sectors bullish: The following industry sector ETFs rose to new highs this month: XLU, XLI, XLB, XLE, KRE, XLRE, and XLP.
• Price/SMA ratios are more bullish this week: Of the S&P 500 stocks, a 66.0% majority are above their trailing 50-day Simple Moving Averages, and a 67.0% majority are above their trailing 200-day SMAs. Both are up from a week ago, and both remain at high levels. 
• Relative strength rotation: Since November 2025, leadership has rotated away from last year's mega-cap tech leaders. The popular view that AI enthusiasm has been overdone has contributed to cheaper valuations for technology stocks. The Technology ETF (XLK) price action and relative strength improved over the past 2 weeks, as XLK price found support above its November low and above its 200-day SMA at 135.39. The sideways trading range and underperformance of XLK could prove temporary. Watch for technical support above 135 for XLK.
• Sentiment bullish: $VIX and Put/Call Ratios spiked to 2 standard deviations above their means this month, while CNN Investor Sentiment fell into the Fear zone. Fear is bullish, according to The Art of Contrary Opinion.
• International equities mostly bullish: Foreign stock indexes (except for China) rose to higher highs this month, reinforcing bullish momentum. Emerging Markets (EEM) made a new high on Friday, and EAFE Developed Markets (EFA) made a new high on 2/12/2026. China stocks ETF (FXI) struggled after peaking at 42 on 10/2/2025 but staged a big bullish reversal on Friday following news that the US Supreme Court struck down Trump’s sweeping global tariffs. China stocks may be volatile until the tariffs dust settles.
• US Dollar bearish: The US Dollar ETF (UUP, 27.09) fell to 4-year lows on 1/27/2026 and signaled a “death cross” 2/3/2026—which is recognized when the 50-day SMA crosses below the 200-day SMA.
• Metals vulnerable: Metals recovery attempt on light trading volume may not have much more to go. Gold (GLD) and Gold Miners (GDX) have recovered typical fractions of their crash losses of late January, while Silver (SLV) and Copper (CPER) have lagged and underperformed. Caution is warranted as parabolic up moves followed by crashes often lead to further declines.
• Oil turned bullish: The Crude Oil ETF (USO) rose to its highest price in 7 months since last July as war fears escalate. USO signaled a “golden cross”—which is recognized when the 50-day SMA crosses above the 200-day SMA. 
• Fixed-income prices are rising: US note and bond prices rose further above their highs of December and January. This February appears to be shaping up into a bullish reversal month. The long bond ETF (TLT) is likely to turn bullish in days ahead because the rising 50-day SMA is very close to crossing above the flat 200-day SMA.

11-Year Outperformance by the
Top 10 Exchange Traded Funds
Weekly Rankings of Major Trend Relative Strength
My weekly Top 10 ETFs ranked by the Major Trend Relative Strength outperformed the S&P 500 by over an 11-year period of real-time weekly tests. Click here for a graph of simulated performance.
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My book was named one of the top investment books by Stock Trader's Almanac. This book also received an excellent review in Futures Magazine.

My ETF Rankings are not investment advice. Rather, they are an objective ongoing research study.

Analysis of market forces may offer a sense of probabilities. But the many variables that can impact market prices are notoriously difficult to predict. And, market analysis is something less than an exact science. So, sound trading tactics are always recommended. See my Money Management Rules.

According to CFTC Rule 4.41, hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.

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Robert W. Colby, CMT,
is a consultant to institutional and private investors and traders, providing regular analytical reports, custom research services, and trading systems tailored to clients' objectives. Clients include the most successful traders and investors in the world. Robert is the author of The Encyclopedia of Technical Market Indicators, which is the standard reference for indicator and trading systems design. Previously, at several large Wall Street firms, Robert worked as a proprietary trader, technical analyst, and fundamental analyst. He also was adjunct professor at New York University and New York Institute of Finance, where he developed new courses on technical analysis and market timing.

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