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Posted February 19, 2026 at 9:30 am
Scott Bauer discusses the drivers behind last week’s moves and the catalysts, data releases, and volatility shifts shaping the next five trading days.
Hi everyone. This is Jeff Praissman at Interactive Brokers Podcast. It’s my pleasure to welcome back to the IBKR Podcast Studio Scott Bauer from Prosper Trading Academy. Hey, Scott, how are you?
I am great. Happy to be in New York actually. How are you, Jeff?
Good, good. And always happy to have you out on the East coast. And you know, as we usually do on our Wednesday podcast, we kind of discuss the past week in the market, what’s ahead. So, I kind of wanted to kick it off with what were the key market drivers last week, and how did the major indices you S&P 500, NASDAQ, Dow, performing response to recent economic data releases.
Sure. I mean, obviously earnings still and the concerns around AI and in some of the big tech you know, are we in a bubble? Are we not? What is that rotation? How long is this sector rotation maybe going to last? And so that, that really, I think put, some volatility into the market last week, which we’re still seeing.
And then, on the economic side we kind of had a tale, of two ends of the spectrum. The jobs number, which was a really healthy, strong number, but then we got that revision of, minus over a million jobs from 2025. But then we got CPI on Friday, which came better than expected.
So, I think this week on Friday with PCE, that’s going to be huge based off of what CPI print was last week. Is it going to reinforce that, “Okay, yeah, you know what?”. Maybe inflation is really moving in the right direction and it’s not as sticky as, some thought.
Yeah, I was going to say, you kind of answered my next questions as far as the last week’s inflation report and the commentary. How it’s impacting the investor sentiment and the expectations for future interest rate decisions.
No, no doubt about it. But I find it really, puzzling almost in a way that we saw such a decline in the 10-year yield. We went from 4.30 down to 4%, like in a nanosecond it seemed like. Some may look at that as a really good thing. And some may say, well, if rates are coming down that quickly, is there something under the hood we need to be maybe a little bit more cautious about?
You mentioned AI earlier, Scott, what sectors what showed the strongest and weakest performances last week? And what, if any fundamental factors were driving these moves? Or was it all just sort of momentum?
Yeah, a lot of momentum in the sector rotation if you will, out of some of the AI trade and into staples, into financials which have been rallying this week. But it’s such a disparity of what we saw in the tech space there’s some stocks that are just absolutely getting obliterated and others like, Micron and some of the other chip makers that are doing really well.
So I think it’s a real tough market right now and how long this sector rotation lasts anyone’s guess.
Yeah. And you, and you mentioned next week, I think it’s the 27th that PPI is being released. Any other important economic data that’s scheduled for, they say the next five, seven days or so?
Well, I know we’ve got GDP, PCE which, which I think is going to be really, really important. And then all of a sudden February, short month, we’re going to have a new jobs number in just a week and a half or so. So, I think the market is going to be a little bit on edge until we start to get a pattern for this economic data of are we going one way or the other here?
And I can’t spend time with the, without bringing up your, your favorite index. You know what it is.
Oh yeah. The…
Starts with a “V”, I think!
Starts with a V. So, you know, if I would’ve asked you this question yesterday, you know, it, it was hovering over 20 for quite a while. I see it’s kind of dropped down a little bit below now I think it’s around high eighteens, you know, early low nineteens.
But you know, overall is, is the VIX going to keep kind of continuing to rise here?
You know it’s interesting because if, if you really look at what the VIX means, you know, a VIX of 16 is pretty much equivalent to a 1% daily move in the S&P which we are seeing that and we are seeing even a little bit more than that. So, you know, a VIX in the high teens, maybe even approaching 20 is very, commensurate with how the market is moving.
I don’t think that we will stay in the twenties long without some, God forbid, geopolitical event or some something that happens with a bank or anything like that, I do think Vol is extended.
Great. And then what technical levels are traders watching in these major industries this week? And are they seeing any notable shifts in the market breadth or momentum indicators?
You know, the put call ratio is the highest it’s been in quite a while, meaning the, the amount of puts trading to calls is really above the averages that we normally see. And the skew on the put side, especially in the S&Ps, is pretty elevated. Now, if you’re a trader and you look at some of these indicators, maybe as the contrarian indicator, that could actually be a bullish sign for the market.
You know, it, it’s almost like when we see that VIX really kind of explode and, and people running to get that protection. Sometimes that can. Be the reversal that the market, you know, looks at. So, I’m really looking at that in, in the put call ratio. It’s really interesting. It usually doesn’t stay that way very long.
So again, you know, I know we’re seeing the market, you know, nice move today as it’s sustainable. I don’t know if it’s sustainable. I just know that I think things are a little out of line and as a trader, I want to be selling that skew.
Got it. Well, Scott, this has been great as usual. And for our listeners, you can find more from Scott at prospertrading.com. Also on our website, go to Education. You can hear past podcast and webinars as well, Scott, have a safe flight back to Chicago and always a pleasure having you in the studio.
Thanks Jeff. Appreciate it.
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