Trading System Signals on 02-12-2026

We just published NYSE TICK research this morning discussing the compression of the TICK. It has only gone below -1000 three times since December 4, 2025. Today it hit -1056 at 1:01 pm EST. The market made its initial low around 11:30 am EST today and then tried to repeat yesterday's price pattern of working higher into the close. The selling today was more real instead of the "just kidding" reversals we have seen. The pace of selling slowed down in the afternoon and the bounces were more shallow. The market continued to make lower lows until 3:53 pm EST.

The dead market reversal patterns are extremely overdone, and it makes sense that we should have a series where the market should close on its lows or its highs. The distribution of days where the market extends its range and closes near its high or low has been extremely compressed. The price action today was favorable and may be indicative of a market that is "loosening up" instead of the tightly wound price action we have seen.

The Two System Portfolio NQ did not trade today and did a good job staying out of a market environment that is typically less favorable for the way the Two System Portfolio NQ algorithms work. The Two System Portfolio NQ has a mean reversion strategy and a long only Gap Continuation strategy. Gap Continuations to the short side or shorting momentum has been extremely tough in recent years.

Historically, you can short momentum from time to time even in a bull market. It has been more difficult to do that with the excess liquidity and the reason our Gap Continuation 2020 has been biased to the long side. Adding a short side again is something to consider. Here is a screenshot of the different Gap Continuations and SR Breakouts that did short the market today.

By my calculation, this market is due for an even larger sell off with a more extended afternoon sell off. The weekly cycle for sell offs often times will start on Thursday and pick up on Friday.

Tomorrow we get CPI in the pre-market and it is Friday the 13th.

I'm not superstitious and I'm not trading based on my predictions but continue to look for the best opportunities to capture long or short trades. We are happy to join a sharp reversal higher with long trades if that is the opportunity presented tomorrow.

Hypothetical Trading System Signals on 02-12-2026

Diversified Portfolio 57 (NQ Only) = +$23,230

Stock Index Portfolio 37 = +$18,930

Stock Index Portfolio 18 = +$28,255

Two System Portfolio NQ = 0 (no trades)

Silver Portfolio = update later

50K Portfolio = update later (without Gold and Silver)

Another note for today's trade is based on yesterday's research and the divergence between the overnight trend and day session trend. Today, the market gapped up, adding to the overnight gains, while selling off during the day, adding to the day session losses. Here is the latest Nasdaq 100 index breakdown for the year showing the overnight and day session attributions.

This is a pattern that started in 2024 and is bearish since the net gains are during the overnight session where there is less volume.