This serves as a recap for myself and is not to be viewed as any kind of trade suggestion. All views expressed are my own.
It’s obvious from the above screenshot that price has been in a very tight chop range in 2026. This started to develop in late October of last year as price got close to the 7000 mark.
Over the past 2 weeks, price has been in a rather frustrating spat of chop and back to back swings. This also led to my earlier judgement that price was likely to go down first, since back on Friday the 13th, price closed under the 21 EMA on the daily chart after this extended period of chop.
However, this was not exactly what happened over the previous holiday-shortened week. Well actually it did first go lower a bit and hit under 6800 by a smidge but found buyers around the 100 day EMA. Price never visited down to the level on subsequent days.
On Wednesday, the Fed released its meeting minutes which showed that there was a notable divergence between officials rate outlooks, with a few pointing out potential for raising rates if inflation proves still sticky and if labor market still holds strong. Interestingly, Fed’s Miran also articulated a less accommodative rate path for the year.
On Friday, GDP came in weaker than expected, due to impacts of the government shutdown over late last year, while simultaneously, PCE was slightly higher than expected. This caused some selling in the markets on Friday morning, before it was completely reversed by the SCOTUS ruling that universal tariff per IEEPA was illegal.
The president came out hours ago bashing the decision and showed a strong stance against the ruling. He vowed using other venues such as section 122, 301 or 232 to impose tariffs. But these often come with limitations on both the rate and term imposed. It would be reasonable to think that the tariff won’t be worse than currently imposed under IEEPA.
This saw equities rallying after the press release and closed the day strongly near the high of the day and above the 6900 mark.
Looking ahead, this potentially marks a point of what should’ve happened didn’t, since it was looking bleak and that price was at strong risk of falling, but instead it was able to reverse that and close back around the 21 day EMA.
Also, consider that the underlying sell-off in software tech has run quite a long way, with many high flying stocks down more than 20% from peaking in late October. Other sectors of the market are doing fairly well and have no visible threat on the horizon.
At the same time, the economy and labor market is still holding strong and hyper-scalers at least for 2026 are still making strong capital expenditures.
Combined, this could mean that equities are ready to get out of the swamp to resume the bull trend. The key to validate this is to see how the new week goes. If price is able to generally stay above the 21 day EMA next week, then confidence increases for price to go higher. An additional data point is to see how the software tech sector does- if recovery is seen then confidence increases.
The Ephemeral Tourist
February 22nd. 2026 @ 1:18pm CST
The Ephemeral Tourist 