Trading The Close Market Recap - 02/19/2026: S&P 500 Holds 6,800; SMH Save, Transports Warn Ahead of Core PCE & GDP

In this afternoon's Trading The Close show, Pro Trader Drew Dosek at Verified Investing walked viewers through a day where the markets took a collective "breather." While the major indices—the S&P 500, Nasdaq, IWM, and SMH—were down slightly, the bulls managed to hold the line. As we look toward a pivotal Friday morning featuring Core PCE data, personal spending reports, and GDP growth rates, the technical setup going into the weekend has become critically important.

Today's analysis highlighted the importance of precision in technical trading. Whether it is the "line in the sand" on the S&P 500 or the specific pivot points in the semiconductor sector, the market is currently respecting key technical levels. Below is a deep dive into the charts, data, and strategies discussed in today's show.

The S&P 500: Holding the Line in the Sand

The S&P 500 closed the day with a doji candle at 6,861, signaling indecision but ultimately maintaining its bullish posture above critical support. The market has been flirting with a breakdown, but the bulls have stepped in exactly where necessary.

The most critical level for traders to monitor is the support zone at 6,800. As Pro Trader Drew emphasized, "Here is the line in the sand, 6,800 points. Watch that like a hawk in the coming days to next week."

This level was tagged on Tuesday, followed by a strong bounce yesterday, and maintained today. A breach of this trendline would be technically significant, likely opening the door for a retest of lower trendlines—a scenario that would be extremely bearish in the near term. However, with options expiration looming tomorrow, there is a strong possibility that institutions may pin prices near current levels to capitalize on contracts sold over the last quarter.

The immediate future of this index likely hinges on tomorrow morning's economic data releases at 8:30 AM ET. If the Core PCE and GDP numbers come in line with expectations, volatility may remain muted. However, any significant deviation could be the catalyst that either propels the market off this support or forces a break of the 6,800 level.

Semiconductors and Transports: Leading Indicators Flashing Warnings

Two sectors often viewed as leading indicators for the broader market—semiconductors and transportation—are currently testing pivotal levels.

The SMH "Save"

The Semiconductor ETF (SMH) managed a technical save today, finding support right at the 50% retracement line. The price action tagged a low of $405.56, narrowly avoiding a breakdown. For tomorrow, the specific level to watch adjusts slightly to $406.21.

The SMH is crucial because it often leads the Nasdaq and S&P 500. If the semiconductor sector begins to fall with velocity, it is highly probable that the broader indices will follow suit. The precision of today's bounce off the 50% line suggests that algorithms and technical traders are defending this zone aggressively.

Dow Jones Transportation and the AI Disruption

The Dow Jones Transportation Average presents a more damaged technical picture. The sector experienced a massive selling event on February 12th, following a topping tail on February 11th. This sell-off was driven by a narrative of "AI disruption"—the idea that logistical companies utilizing AI could bypass traditional transport companies, trimming costs and undercutting competitors.

While there has been a rapid recovery attempt over the last three trading sessions, the chart shows signs of "damage." The rally stalled near the top of the breakdown candle, and today's pullback suggests that the energy required to reclaim those highs is dissipating.

"What this is, this is damage to the charts. Whenever you have a move up and then a big red candle, it's going to take a lot of energy for the price to get back up above that area," Drew noted.

The probability currently favors the transports rolling over, with a downside support target at 18,246. If both the SMH and Transports—two key leading indicators—begin to break lower simultaneously, it would serve as a potent warning signal for the broader equity markets.

The 10-Year Yield: A Textbook "Break and Retest"

The 10-year Treasury yield provided a textbook example of technical market behavior today. After breaking down through a significant trendline recently, the yield rallied back up to "kiss" the underside of that trendline before pulling back.

This "break and retest" pattern is a classic technical confirmation. When an asset breaks a support level, it often returns to test that level from the other side, turning former support into resistance. The rejection at this trendline is a bearish signal for the yield in the near term.

The next significant level of support for the 10-year yield sits just beneath the 4% mark at 3.996%. However, because this area has been tested multiple times in the past, its structural integrity may be weakened, potentially allowing for a pierce lower.

Precious Metals Divergence: Gold vs. Silver

An interesting divergence has emerged in the precious metals complex, offering nuanced opportunities for traders.

Gold's Resilience

Gold had a minor positive day, up 0.4%, but the technical victory was significant. Price maintained its position above an inclining trendline that dates back to April 2025 and connects through the October 2025 pivots. Furthermore, Gold closed back in the top 50% of its parallel channel.

This price action indicates near-term strength. As long as Gold holds this trendline, the momentum favors the bulls.

Silver's Bearish Flags

In stark contrast, Silver remains trapped in a bearish consolidation pattern. The chart reveals a series of "bear flags"—sharp moves down followed by sideways consolidation. Silver is currently forming its third consecutive bear flag and is trading in the lower 50% of its most recent red candle.

"Very interesting divergence going on there between gold and silver, how gold is staying relatively stronger," Drew observed.

While Gold looks to push higher, the technicals for Silver suggest a high probability of a further drop to tag the trendline at $60.78. Traders should be cautious of this divergence; often, one metal will eventually drag the other in its direction, or they will meet in the middle.

Earnings Movers: The Psychology of Overbought Charts

Earnings season continues to provide extreme volatility, and today's reports from Deere and Omnicom offered valuable lessons in reading market psychology and technical extensions.

Deere (DE): The Vertical Move

Deere reported a blowout quarter, beating earnings per share estimates by 19.55% and revenue by 5.45%. The stock exploded upward, gaining over 13% and bringing its year-to-date gains to over 40% in just two months.

While the fundamental news is bullish, the technical chart is flashing warning signs of exhaustion. The stock is extremely overbought, with the weekly RSI hitting 82.02. Historically, vertical moves of this magnitude are unsustainable without a pullback or consolidation.

The stock pierced a long-term parallel channel dating back to the COVID lows. While it is possible for the stock to continue higher toward resistance at $700 or the long-term trendline at $730, the probabilities favor a retracement.

"I fully anticipate, with this overbought scenario that we have on Deere, Deere should be coming back in at a minimum of testing the $646 [level], if not coming all the way back down here to where price was pre-earnings," Drew analyzed.

This scenario highlights the discipline required in trading. Chasing a stock that has gone vertical is a low-probability strategy. The disciplined trader waits for the inevitable pullback to support levels—in this case, the top of the parallel channel near $600—before considering an entry.

Omnicom (OMC): Revenue Beats Margins

Omnicom provided a fascinating case study in what investors value. Despite a massive margin miss (negative 17.7%), the stock popped 15% largely due to a revenue beat of nearly $1 billion (up 22.81%). Investors chose to focus on the top-line growth, betting that margins can be fixed later.

Technically, OMC faces immediate resistance at $81.87, a level that has capped rallies since April of last year. If bulls can clear that hurdle, the next target is $86.67. However, similar to the pattern seen in yields and other charts, OMC may be setting up for a "break and retest" of its longer-term trendlines.

Technical Setups: Viewer Requests

In response to viewer requests, several charts were analyzed, revealing consistent technical patterns across different sectors.

IBM: The Broken Parallel

IBM's chart resembles the recent breakdowns seen in Netflix and Amazon. The stock has broken below a parallel channel, turning the bottom of that channel into resistance at $267.24.

Currently, IBM is oversold and approaching support at $252.95, where buyers have stepped in over the last few trading days. This creates a potential swing trade opportunity for a bounce. However, upside is likely limited. A conservative profit target would be the channel bottom at $268, while a more aggressive target sits at the pivot highs between $272 and $279.

Copper: Defending the 50% Line

Copper has sold off from the top of its channel, dropping to the lower 50% range. If the sell-off continues, support lies at $5.49. However, the current consolidation suggests the bearish pattern could fail if price reclaims the breakpoint at $5.92. A move back above this level would shift probabilities toward a re-attack of the channel top at $6.72.

Albemarle (ALB): Head and Shoulders Resistance

Albemarle has enjoyed a tremendous run from $49 to $191.99 but is now showing signs of exhaustion. The weekly chart shows bearish consolidation over the last four weeks. The price action is struggling at the "armpits" of a large head-and-shoulders pattern.

Given the overbought conditions, a pullback to support at $139.44 appears likely. This retreat could provide the necessary momentum building for a future breakout, but the near-term setup favors the downside.

Righetti (RGTI): Still Seeking a Bottom

Righetti Computing has fallen significantly from its highs near $60 in October 2025 to close under $17. The stock is currently retesting the underside of a broken declining parallel channel—another iteration of the "break and retest" theme prevalent in today's market.

While the stock is toying with oversold territory, significant downside targets remain unfulfilled. A distinct head-and-shoulders pattern projects a move lower.

"Once we do tag these two levels, the first one here at $14.24 and the second one at $13.27, then I would feel much more comfortable for Righetti staging a base for a bounce," Drew stated.

This analysis underscores the importance of patience. Even when a stock is down significantly, entering before it hits major technical support increases risk. Waiting for the $13-$14 range offers a much higher probability setup.

Oil and Geopolitics

US Oil continues to consolidate, forming a potential bull flag. The price attempted to push above the pivot at $66.48 but has failed to close above it for the last two days. A close above this level would activate the bull flag, targeting $68.94.

The backdrop for oil includes ongoing geopolitical tensions involving the US, Iran, Ukraine, and Russia. Specifically, the US-Iran conflict has been a primary driver of the recent price appreciation. Traders must remain aware that headline risk in this sector can override technical patterns in the short term.

Conclusion: Discipline in the Face of Data

As we head into Friday, the market is in a state of suspended animation, awaiting the Core PCE and GDP data. The S&P 500 is holding its "line in the sand" at 6,800, but leading indicators like the SMH and Transports are flashing caution signals.

The recurring theme in today's analysis—from the 10-year yield to IBM to Righetti—is the "break and retest" pattern. Recognizing these patterns allows traders to avoid buying into resistance and to identify high-probability entry points at support.

Whether it is waiting for Deere to pull back to $600 or waiting for Righetti to hit $13.27, the key to success in this environment is discipline. As Drew reminded viewers, "The market does not let you be cocky." By adhering to strict technical levels and managing risk around upcoming economic data, traders can navigate the volatility and position themselves for the next major move.