The Next Big Sector Rotation ?
High Probability Trades for 23 - 27 February 2026 | Edition 31
This is my performance for this year up to February 21, 2026.
This is my performance from previous years.
To better understand the strategy we are following and not to buy blindly without any context, please read and analyze my strategy carefully:
Right now, these are my positions:
Dear Traders,
I want to start by welcoming the 14 new members to the community. I am truly excited that you will be with us for a year, and I am very curious to see where your trading will be a year from now.
With that being said, it was a wild, holiday-shortened week, but we finally got some resolution on the biggest macro overhang in the market.
Let’s dive into the data, the Supreme Court drama, and how we are positioning our capital for the week ahead.
Weekly Market Direction
The Macro Drop: SCOTUS, Tariffs, and Sticky Inflation
Here is exactly what drove the price action this week:
The Tariff Overhang is Gone: On Friday, the Supreme Court dropped a 6-3 decision striking down the sweeping global tariffs imposed under the International Emergency Economic Powers Act (IEEPA). The market loved the removal of this massive uncertainty. The administration immediately pivoted, slapping a 10% tariff across all trading partners using Section 122 (which is capped at 150 days without Congressional approval). Bottom line: The legal limbo is over, and the 10% replacement rate is in line with what Wall Street expected, avoiding a global trade panic.
Inflation is Running Hot: Friday morning gave us the Core PCE Price Index, the Fed’s preferred inflation gauge. It came in hot at 0.4% MoM (beating the 0.2% forecast) and 3.0% YoY. Headline PCE hit 2.9% YoY, the highest level we’ve seen since March 2024. Throw in Wednesday’s FOMC Minutes, which showed policymakers remain divided due to persistent inflation risks, and it’s clear the Fed isn’t in a rush to cut rates.
Growth is Slowing: The advanced Q4 GDP Growth Rate cooled to 3%, down from the prior quarter’s 4.4%. Separate BEA data confirmed that economic growth decelerated sharply, dragged down by a pullback in consumer and government spending.
Price Action & Sector Rotation
Looking at the 1-Week Sector Performance, the smart money flowed heavily into cyclical and value areas:
Basic Materials: +3.04%
Industrials: +2.48%
Energy: +2.40%
Meanwhile, Consumer Defensive took a massive hit, dropping -2.11% on the week as investors rotated out of safety plays.
The Game Plan
Our internal Freedom Trades Sentiment Gauge has ticked up to 47 (Neutral). We are officially out of the pure “Fear” zone we saw earlier in the month, but this is still a tape that requires strict discipline.
Recommended Strategy: We are maintaining 30-60% Exposure with normal position sizing. Be selective. The VIX is sitting at 19, which is somewhat elevated.
Earnings and Economic Events
This week, the following companies report earnings:
Next week is relatively quiet in terms of economic events; the only notable event is the PPI MoM on Friday.
High Probability Trades
You can find my full watchlist here:
https://www.tradingview.com/watchlists/321623469/
Ticker: CLS & FLEX
Both tickers are forming the same pattern, the same base with a price range contraction and a decrease in volume.
The way I’m going to play this trade is to either buy again at the lower base (some of you are already positioned in $CLS).
However, pay attention: the reason I am buying at the lower base is due to the market not favoring breakouts. Normally, I prefer to buy into strength, which is why I have set alerts at the upper range to see how the stock reacts when it reaches this key level.
Don’t rush into the trade. In these moments, the number one objective is to preserve your capital.
Observation:
It is possible that it is finally time for a rotation into the “Packaged Software” sector.
I have been paying close attention to a few companies that reported earnings, such as $FIG, HUBS and $RNG, and all had solid reports with an increase in sales and revenue.
Now, we need to see a reversal from the big players like $MSFT, $CRM, $ORCL, $PLTR, and the others will follow.
What I am trying to say is: keep an eye on the “Packaged Software” group. Sentiment right now is at its lowest, and usually, that is when we find the best opportunities. Wait for confirmation and don’t try to catch a falling knife.
Other interesting tickers you should keep an eye on:
NBIS, FRMI (after earnings), AXTI, FIG, RUN (after earning - check that base breakout)
I would give you more setups, but honestly, there aren’t that many; there are a few that look good, but we will mostly get chopped up just for the sake of trading.
The only smart play that I see here is Patience! We will get through this period and we will make good money.
As always keep an eye on the discord sever!!
I encourage you, if you’re already a PRO member, you can upgrade your membership on the Discord server (at no extra cost) and get access to a fully private server dedicated to PRO members, for networking, trade ideas, insights, and alerts. (I am wayyy more active there than the Substack chat)
Connect PRO account with discord server
P.S.: The email you use on Discord must be the same as the one on Substack.
All the positions I take during the week can be found on the Discord server or in the Freedom Trades private chat.
If you get an error or can’t make it work, message me privately, I might be able to help you out. 🙂
“One trade closer to freedom”
Vladislav