After-Hours % Advancers

After-Hours % Decliners

Volume

- NYSE volume 4% below its one-month average;

- NASDAQ volume 4% below its one-month average;

- VIX index: up 11% to 21.14

Breadth

S&P 500 Sectors

% Movers

Nasdaq 100 Heat Map

Closing S&P 500 Heat Map

From Charlie:

I have been negative on Disney  (DIS)  for more than five years.

Despite several activist attacks, the stock has barely had an uptick.

That said, there is a price for every stock and DIS is approaching my $90 to $95 buy level.

From Gary Marcus:

Turns out Generative AI was a scam

Going out for a late lunch.

Back at 2 PM.

I took profits in my  (GRNY)  and  (JOET)  shorts.

I will re-short on strength. 

* 2026 is already becoming a surprising year...

* Though it is still early in the year, one of my surprises — that a basket of consumer staples ( (PEP) ,  (KO) ,  (PG)  and  (KMB) ) will materially outperform the Mag 7 by a decisive amount in 2026 — appears to be developing...

Surprise #3: The AI economy and (a heavily weighted and imbalanced) stock market dependent on AI show signs of interruption, then disruption

The AI bubble bursts as the circular financing deals unwind (or are pushed out) — AI capital spending slows abruptly as return on investment concerns emerge as power generation and grid modernization are bottlenecks. Depreciation charges and lower demand wrecks havoc with consensus AI 2026-27 earnings per share expectations. Another big AI surprise would be if China decides to flood markets with inexpensive AI models — pressuring the ultimate and expected robust ROI forecasts (which are already in question by some skeptics).

OpenAI's Sam Altman finds a place to live right next door to Sam Bankman-Fried. His effort to make OpenAI too big to fail, fails. ChatGPT turns out to at best be a commodity large language model purveyor. It becomes obvious to all that its recent $500 billion-plus valuation can’t be supported. Without an ability to do a down round without losing face, OpenAI loses all access to capital. Ultimately, a consortium of its customers and suppliers takes it over to modify its business plan and reduce the cash burn.

With Altman tossed to the curb (or worse), the prosecutions begin.

OpenAI’s problems pushes a deeply committed (to OpenAI) Softbank to the verge of collapse.

Nvidia shares fall by -40% as CoreWeave (CRWV) is driven into bankruptcy.

A basket of defensive consumer nondurable equities ( (PEP) , (KO) , (PG) and (KMB) ) materially outperform the Mag 7 by a decisive amount.

The shares of (boring and previously hapless) PepsiCo outperform most other staples and 90% of the S&P Index after a much better skein of organic unit growth and as its core business is rationalized.

- Kass, 10 Surprises for 2026

Today, iin a day in which the S&P index is -1%, a package of staples (PEP, PG, KO and KMB) are conspicuous winners:

*  (PEP)  +$2.37

*  (PG)  +$3.16

*  (KMB)  +$1.57

*  (KO)  +$0.33

By contrast, the components of Mag 7 are stumbling badly and are conspicuous losers:

*  (TSLA)  -$10.70

*  (AAPL)  +$2.20

*  (AMZN)  -$5.71

*  (NVDA)  +$0.35

*  (MSFT)  -$11.43

*  (GOOGL)  -$2.20

*  (META)  -$11.66

Tech  (XLK)  vs. Financials  (XLF)  at 11:06 AM:

- NYSE volume 191 million shares, flat to its one-month average;

- Nasdaq volume 2% below its one-month average;

- VIX index: up 10.21% to 21.04

From "Meet" Bret Jensen:

STAFF

50 minutes ago

Private equity's returns to investors declined for a fourth straight year as the industry is saddled with trillions of dollars of unsold assets and struggles to raise money for new funds, according to a recent report. Distributions, as a percentage of net asset value, have stayed under 15% for four straight years, according to a report by consulting firm Bain & Co.

"With the average holding period for assets at exit floating around seven years, the industry is still sitting on 32,000 unsold companies worth $3.8T," the report said. Many general partners appear to be holding onto investments longer, waiting longer for strategies to boost EBITDA. But that can backfire. Bain's analysis of returns from 15 years of buyout vintages (2000-'15) shows that the internal rate of return starts to stagnate at about year seven and declines after that.

* What a market for opportunistic traders....

With S&P cash down by more than -20 handles (minutes ago it was +5!) I have taken in my short Index calls for a profit.

Home, home on the range. 

With S&P cash +5 handles I am adding to my Index short calls.

* This is my third or fourth (profitable) trade since last night... ringing the cash register again

I just took off the long leg of (long Index common/short Index calls) to move back very small net short.

I sold Index common at:

*  (SPY)  $687.13

*  (QQQ)  $605.70

Treasury Auction

11:30 a.m.: Treasury hosts a $89B 3 and a $77B 6-Month Bill Auction

Economic Calendar 

4Q25 MSO sales seen in-line; 2026 organic growth modest as rescheduling, M&A remain key catalysts -- Alliance Global Partners

Analyst Aaron Grey said, "We expect 4Q25 MSO sales prints to be broadly in-line with prior management expectations, with MSO companies' having guided for flat to +LSD sequential sales trends. For 2026, we expect the prospects for organic growth to be modest given a limited number of smaller states having converted to adult use (MN & DE) and VA (retail bill on the horizon) setting up to be more of a 2027 benefit -- though we will be interested in commentary regarding the prospects for M&A to drive inorganic growth. We expect international cannabis growth to remain a highlight for Canadian LPs and CURA, though the temporary stoppage of imports in Germany could impact the Q -- with global cannabis momentum continuing (France setting up as next medical market).

The main topic for stakeholders remains the timing of when Attorney General Pam Bondi will follow the President Trump's executive order directing for cannabis to be reclassified as a Schedule III drug -- with White House spokesman Kush Desai reiterating to Fox News Digital last week that the directive to reschedule cannabis is part of his "pledge to expand medical research" of the plant, in response to push back on rescheduling. However, with MSOs trading at an average ~5x FY2 EV/EBITDA, we continue to see the valuation proposition as appealing, particularly for operators with catalysts largely embedded in (such as VA, TX, international) - with incremental federal (rescheduling) and state catalysts (PA) offering meaningful upside.”

* More trading profits (they are adding up)...

The intra-day and intra-evening volatility provides an agile and opportunistic trader a way to profit.

Since I have been clueless about the uptrend, I try to capitalize on the above!

With S&P futures -35 handles and Nasdaq futures -170 handles - I am buying Index common (against my short Index calls) and moving back to delta neutral:

*  (SPY)  $685.95

*  (QQQ)  $604.70

I plan to get short again on a rally - by selling out the long Index common leg.

(Corrected disclosures)

Based on my contacts I think there is a good chance that cannabis rescheduling gets finalized this week.

I have added to  (MSOS)  daily last week and I intend to buy continued weakness into the possible announcement.

Bonus — Here are some great links:

US Stocks Watchlist

Sector Momentum Favors Defense

Portfolio Positioning & Performance

Wolf Street howls about our rising U.S. debt. 

The S&P Short Range Oscillator remains in overbought at 3.81% vs. 2.53%.

I am back short the indices at 4:50 AM Monday morning:

Dougie Kass

S and P futures are now only -14 handles (54 -55 last night) and QQQ futures are only -70 handles (were -250 last night).

At 446 AM Monday morning I am back shorting the Indices:

• SPY $687.85
• QQQ $606.99

* Out of Index shorts (now delta equivalent neutral — long common/short calls)...

From about 8 PM Sunday evening:

Dougie Kass

At 805PM S and P futures -45 handles

I have covered my Index shorts:

• SPY $685.01 (shorted Friday night at $689.30, below and was short SPY calls from Friday afternoon)
• QQQ $603.72 (was short QQQ calls from Friday afternoon)

From Friday night:

Dougie Kass

$689.30 (610PM) back shorting SPY vs

From Friday afternoon:

Common Converted to Calls

I have converted my short index common into short calls.

Position: Short SPY calls (S), QQQ calls (S)

By Doug Kass Feb 20, 2026 12:20 PM EST