ES Morning Update February 20th 2026

The market has rallied up in front of next Monday/Tuesday when I thought we’d see this move play out. I was thinking that we’d chop around the early lows from this week, into this Friday, and then rally next week. But the market has other plans it seems as it’s been grinding higher each day now since the early week low.

It’s looking like it’s waiting for some “event” to make the next move, and with today being OPEX it could go either way. I could make the case that the rally is done in a one wave move and that we are going down from here.  Or I can make the case that we are in an ABC rally up and the A up finished Wednesday, and the B down followed.  That leaves the door open for a strong move up into next Monday or Tuesday for the C wave.

My thoughts are that “if” we can get the C wave up today, to make higher high from the Wednesday high, I think that will end the move up and next Monday we should rollover and start the move down to the 660.08 FP on the SPY, or even the multiple FP’s in the 640′s, which would be close to the 200 day SMA on the daily chart.

If instead today goes down more, but doesn’t take out the recent low, then I have to lean toward an ABC move up carrying into next week where we are in the B wave down and that Monday/Tuesday could see the C wave up to take out the high from this Wednesday, and possibly hit the falling trendline from the 1/28 high that connects to the 2/2 high and 2/11 high.

That would be into the 6950′s area probably. So the close today is important.  If we go lower I can’t short it (unless it’s a flush to the FP’s?), as then I’ll have to wait for Monday/Tuesday to see if the C wave up happens.  If we go up and take out this Wednesdays high (to run the stops on the shorts) then I think Monday starts the down move. Bottom line is that what happens today is important. If we get the move up I think we could see an ugly move down next week.

It’s a flip of a coin on which way it’s going first as the cycles point to a high next Monday/Tuesday, but that would suggest that we do not make a run to say 6950 or so in some C wave squeeze move.  The Supreme Court could make a decision today at 10am EST about Trump’s Tariff’s, which if they rule them as unconstitutional then the market will tank.  But odds of low of the decision for today, and higher for next Tuesday or Wednesday.  If we don’t get a big squeeze today then we could still go up into next Tuesday (assume no war with Iran over the weekend) where we top out and then they rule against Trump… which will be the catalyst for the market to fall off a cliff.

Have a great weekend.