My Trading Game Plan Revealed - 02/13/2026: CPI and Yield Collapse Signal S&P Distribution and Key Stock Levels

The markets are currently navigating a complex web of economic data, shifting Federal Reserve expectations, and technical distribution patterns. Following a CPI report that landed exactly where the data suggested it would, traders are now faced with a divergence between headline economic numbers and the story being told by the bond market. In this morning’s episode of My Trading Game Plan, Gareth Soloway, Chief Market Strategist at Verified Investing, broke down the critical technical signals appearing on the major indices and provided actionable levels for individual stocks moving on earnings and news.

The CPI Print and the Bond Market Warning

The latest Consumer Price Index (CPI) data arrived with precision, matching the analysis Gareth shared days prior. The month-over-month number came in at 0.2% versus the 0.3% forecast, while the year-over-year figure landed at 2.4% against a 2.5% expectation. While on the surface, cooling inflation appears positive for equity markets, a deeper look at the reaction in Treasury yields suggests a more concerning narrative regarding the health of the economy.

The 10-year Treasury yield is collapsing, a movement that stands in stark contrast to the "strong" jobs data released earlier in the week. While participation rates and hourly earnings beat expectations, the bond market is signaling disbelief. When yields plummet despite ostensibly robust employment figures, it indicates that the bond market—often considered the "smart money"—is pricing in economic weakness that the headline numbers have yet to reflect.

This environment creates a unique political and monetary dynamic. The lower inflation data potentially hands the Federal Reserve, and specifically the new Fed Chair nominee Kevin Warsh, the latitude to enact rate cuts sooner than some might expect. However, if these cuts are necessitated by a rapidly cooling economy rather than a "soft landing," the implications for corporate earnings could be significant.

The Mechanics of a "Failed Move" in Yields

From a technical perspective, the 10-year yield chart offers a masterclass in market psychology. The yields recently staged a breakout above a key resistance point, drawing in participants who believed the trend was definitively higher. However, that breakout has now failed.

As Gareth noted in the show: "The old adage that I've said for the last decade, 15-plus years even, is the biggest moves come from failed moves."

When a widely watched technical breakout fails, it traps those who bought the breakout. As they rush to exit their positions, it creates a vacuum that accelerates price action in the opposite direction. The current failure in yields suggests a reversion move is underway, reinforcing the narrative of a slowing economy.

S&P 500 and Nasdaq: The Anatomy of Distribution

The major indices are currently exhibiting classic signs of distribution—a phase where institutional investors ("smart money") sell their positions to retail investors who are buying the narrative of a never-ending bull market.

On the S&P 500 daily chart, the breakdown from the up-sloping trendline has already occurred. Since that break, the price action has been characterized by chop—rallies that fail to sustain new highs followed by pullbacks. This behavior forms a "rounded top," a technical formation that visually represents the gradual exhaustion of buying pressure and the transfer of assets from strong hands to weak hands.

Furthermore, a potential Head and Shoulders pattern is emerging. If the S&P 500 fails to take out recent highs and begins to roll over, it confirms the right shoulder of this bearish formation. The critical level to watch is a daily close below 6,790. A breach of this level would trigger a measured move lower, potentially targeting significantly lower support zones.

The "Stair Step" Decline vs. The Crash

Despite the bearish technical setup, it is crucial to understand the likely nature of the decline. Investors conditioned by years of "buy the dip" mentality often expect markets to either soar or crash violently. However, the probability favors a different outcome.

"Does this mean that we're going to see an all-out crash in the markets? No. Markets generally don't crash off all-time highs because every X percent down, retail investors, which have been programmed for literally years to buy the dip, they will be buying the dip."

This behavior creates a "stair step" lower: a selloff, followed by a retail-fueled bounce, followed by another selloff. This grinding decline is often more painful for retail traders than a crash because it constantly offers false hope. True panic—the kind seen in March 2009—typically occurs only at the end of a bear market, when retail investors finally capitulate and refuse to buy. Currently, we are far from that stage.

Individual Stock Setups: Navigating Earnings and Volatility

While the macro picture suggests caution, volatility in individual names provides specific opportunities for disciplined traders.

Pinterest: Distinguishing Day Trades from Swing Trades

Pinterest is under heavy pressure, down over 22% following its report, compounding a decline that has seen the stock drop significantly since the start of the year. This scenario highlights the vital distinction between day trading and swing trading levels.

For day traders looking for an intraday bounce, the gap fill level at $13.82 presents a technical area of interest. This level is derived from short-term pivots and is valid only for a trade lasting minutes to hours.

However, for swing traders—those looking to hold for days or weeks—the risk at $13.82 is too high. The swing trade level is found much lower, at the major pivot low from 2020 around $10. This distinction is critical; a level that works for a quick scalp can be disastrous for a swing position if the broader trend continues downward.

DraftKings: The Discipline of Pre-Market Analysis

DraftKings offers a lesson in the importance of pre-market observation. While the stock has gap fill support around $21, price action in the pre-market session already violated this level.

"One of my rules that I abide by… is discipline. You have to recognize that… if it was trading down below $21… I don't want to trade that anymore."

Because the $21 level was compromised before the bell, it is no longer a valid support for a high-probability entry. Instead, the focus shifts lower to $19.50, a level defined by previous consolidation and rejection points before the stock's prior breakout. Additionally, a deeper swing trade level exists around $17.20, offering a more conservative entry point for longer-term positioning.

Rivian: Gap Fill Resistance

Rivian is surging, acting as a proxy for EV enthusiasm. However, the chart reveals a massive gap between the previous close and the current open. In technical analysis, gap fills often act as resistance. With the stock trading below the gap fill level, a move up to $18.85 presents a potential day trade short opportunity.

Crucially, this is strictly a day trade setup. The swing trade chart shows a stock that has been decimated from highs, making a swing short dangerous due to the potential for a massive short squeeze. The risk-reward ratio for a multi-day short position is unfavorable given the stock's history of volatility.

Applied Materials (AMAT): Trend Line Mechanics

Applied Materials is up approximately 10% on AI-driven demand, pushing its market cap significantly higher. For traders looking to fade this move, identifying a logical resistance point is challenging in price discovery mode.

By connecting ascending highs, a trend line resistance level emerges around $390. While this is roughly 10% away from current prices, it provides a structural anchor for a potential short entry. Interestingly, previous trend line analysis on AMAT shows that broken resistance lines often turn into support on pullbacks, validating the precision of these technical tools.

Commodities and Crypto: A Mixed Bag

Bitcoin's Micro vs. Macro Conflict

Bitcoin continues to present a conflict between timeframes. The micro (short-term) pattern remains bullish, with an "inside bar" formation suggesting a potential push higher, possibly toward $80,000. However, the macro (long-term) pattern is bearish.

This divergence dictates strategy: short-term long positions may be viable to capture the move to $80,000, but the macro risk suggests exiting and moving to the sidelines once that target is achieved. The probability of a sustained breakout above that level is diminished by the larger bearish structure.

Gold and Silver Consolidation

Precious metals are currently stuck in a choppy trading range. Silver, despite a sharp drop recently, is holding support between $70 and $71, while remaining capped below $90. Gold is similarly range-bound.

In these scenarios, the "game plan" is often patience. When an asset is stuck between clear support and resistance without breaking either, the probability of a successful trade decreases. The disciplined approach is to wait for a test of the outer boundaries of the range before committing capital.

Energy Markets

Crude oil has softened slightly as yields drop, pricing in the demand destruction associated with a weaker economy. Natural gas remains in a consolidation phase after recent volatility, with support established around $2.73. Like the metals, these assets are currently in a "wait and see" mode for high-probability setups.

The Psychology of the Casino

The overarching theme of today's analysis—and successful trading in general—is the shift in mindset from gambler to casino.

"When you start trading like you are the casino, not the gambler, that's where things turn… It's a high win rate that just keeps me grinding out generally month after month profits."

A gambler bets on hunches, narratives, and hope. A casino operates on mathematical edges and probabilities. They know they will lose individual hands (trades), but they know that over a large sample size, the odds are rigged in their favor.

By utilizing technical levels—like the gap fill on Rivian or the breakdown level on the S&P 500—traders are essentially establishing their "house edge." They are not predicting the future with certainty; they are executing trades where historical data suggests the probability of success is 70% or higher.

Conclusion

As we head into the President's Day holiday weekend, the market landscape is defined by a tug-of-war between optimistic headline data and pessimistic bond market signals. The S&P 500 and Nasdaq are flashing warning signs of distribution, while individual stocks like Pinterest and DraftKings are testing critical support levels.

Navigating this environment requires ignoring the noise of the narrative and focusing strictly on the price action. Whether it is waiting for the $19.50 level on DraftKings or watching for the 6,790 breakdown on the S&P, the disciplined application of technical analysis remains the most reliable path to consistent profitability. The market will always provide opportunities; the trader's job is to wait until the probabilities align in their favor.