You Decide - Market Analysis for Feb 17th, 2026
By
Avi Gilburt
I am going to lay out what I seeing in the SPX/ES charts, and you can decide how it should be viewed.
From the bullish side of the market, we have now completed 5 waves into today’s low. And, in the yellow count, this could complete a much more protracted yellow (b) wave, suggesting a (c) wave rally north of 7100SPX has begun. Moreover, the MACD on the 60-minute chart seems to have reset down to the region from which rallies have begun.
In order for me to have confidence in the (c) wave rally, I would need to see a rather clear 5-wave rally off the low. The initial rally off the low is not clearly a 5-wave structure. The pullback we then quite deep to be considered a standard 4th wave, but I can make that argument. The rally after that pullback has now stalled at the point where it is .764 the size of the initial move up off the low. So, if the pullback was a 4th wave, we have reached the maximum size for a reasonable 5th wave. So, as long as we do not break out over 6865SPX in a direct manner, there is a potential structure in place as 5 waves up off today’s low. But, as you can see, it is no where near ideal.
Should the market move more directly over 6865SPX, then we run the risk of this being an a-b-c rally for a 1-2 downside set up, as shown on the ES chart. In fact, the a=c would target the .500 retracement of the wave 1 down, and if we extend to the c=1.382*a point, then that puts us directly at the .618 retracement.
So, as you can see, we are now at a rather precarious point as we look towards the last two hours of trading.
Additionally, if we should break down below today’s low, that opens a trap door for a wave 3 down to already be in progress, as it is not so unusual to see a c-.764*a, which we have already struck. But, that would be a very shallow wave 2, as it only is hitting the .382 retracement region of wave 1.
So, the market has given us nice parameters. But, it still has not made it clear if it wants to rally one more time to higher highs, or it is about to take a dive. If it chooses a dive, the minimum target is the 6500SPX region, and it could be even deeper than that as once we begin to break support, this could fall apart rather quickly, as we have been so stretched to the upside – similar to what we recently experienced in metals. And, we are really way overdue for that pullback.
So, as I said, you decide. We may still need a bit more information. But, I wanted to write the update so you know what to look for in the coming hours.
