Xcel Energy Inc (XEL) is reviewed with Elliott Wave analysis on a long-term chart. From the early 2000s, price formed a five-wave advance at a higher degree. That was followed by a wave IV correction and then wave V. A major top then formed, and a larger correction began. The drop is shown as a three-wave a-b-c corrective move at cycle degree. Wave c is described as ending near **$43.64**. This level is treated as the key invalidation point and as the end of wave **(II)**. After hitting **$43.64**, the stock moved higher. This suggests the early stage of wave **I of (III)**. On a lower degree, five waves are said to be complete in wave **((1))**, followed by a pullback in wave **((2))**. The next rise is viewed as the start of wave **((3))**. The outlook stays bullish as long as price holds above **$43.64**. The technical summary is: – **Invalidation level:** $43.64 – **Trend bias:** Bullish – **Wave position:** Early stage of wave I of (III) – **Structure:** Impulsive action after a completed lower-degree five-wave move Because XEL appears to have finished its correction and is starting a new push higher, this creates an options opportunity. The wave structure points to a strong, sustained rally. That favors strategies that benefit from a rising stock price and possibly rising volatility. This shift is also supported by fundamentals from late 2025. After an economic slowdown last year, Xcel’s **Q4 2025 earnings** (reported in **January 2026**) showed a **5% revenue beat**. Higher-than-expected industrial demand drove the result and may signal an economic recovery. The broader backdrop helps as well. The latest **EIA** report forecasts a **2.5% increase** in U.S. electricity consumption for 2026, a clear change from the flat growth seen in 2025. With interest rates stabilizing, capital-heavy sectors like utilities can look more attractive again. Because of this, buying call options is the most direct way to express the view. Since wave **(III)** is expected to be a longer-term move, expirations **six to nine months out (or longer)** may better capture the move and reduce short-term time decay. For more conservative risk profiles, **cash-secured puts** or **bull put spreads** offer an alternative. The short strike can be set below **$43.64**, which the technical case treats as the key line in the sand. This approach collects premium while keeping risk defined around a technically important level. Implied volatility in XEL has been fairly muted during the 2025 correction. If a new impulsive wave gains speed, volatility may expand. That would support being a net buyer of options and could add value to long call positions. This setup resembles the recovery phase in 2021, after markets stabilized following the 2020 downturn. Utility stocks then climbed in a steady, strong advance as the economy reopened. XEL may now be in the early stages of a similar multi-quarter rally.

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Canada’s CPI rose 2.3% year over year in January, down 0.1 percentage points. Prices were flat on the month. Markets expected 2.4%, and TD Securities forecast 2.5%. Food prices rose due to base effects from last year’s HST pause. That was partly offset by lower energy prices and slower shelter inflation.

Core Inflation Momentum Slows

Core CPI-trim and CPI-median both fell 0.2 percentage points to 2.45% year over year. Three-month core inflation dropped to 1.2%. TD Securities said the Bank of Canada is unlikely to react sharply to the softer core trend. It added that weaker core momentum makes it easier for the Bank to respond if new growth headwinds appear in 2026. Canadian fixed income outperformed after the CPI came in below expectations. The Canada–US 10-year spread narrowed by about 2 basis points. TD Securities said further downside rate risks are already fully priced. The softer January CPI print (2.3%) shifts our focus. It suggests disinflation is building. The Bank of Canada may not cut rates right away, but this report lowers the bar for action if the economy weakens further. For traders, the bias in Canadian rates is now more clearly to the downside.

Market Implications For Rates

This CPI report adds to other signs that the economy is cooling. GDP growth in Q4 2025 was a weak 0.6% annualized. The latest labour force survey also shows unemployment edging up to 6.2%. Together, these trends strengthen the case for the BoC to begin an easing cycle. Markets are now pricing in at least 75 basis points of cuts by the end of the year. This setup echoes past BoC pivots, such as the 2015 cuts after the oil-price collapse. After aggressive rate hikes in 2023 and 2024, the Bank has room to lower borrowing costs. The next GDP and jobs reports will be key for confirming whether growth is slowing further. In the weeks ahead, derivatives traders may consider trades that benefit from falling Canadian rates. Examples include buying call options on BAX futures or using interest rate swaps to receive fixed, based on the view that rates will fall more than the market expects. These trades assume that incoming data will push the BoC to act sooner rather than later. This view also points to potential weakness in the Canadian dollar, especially if the US Federal Reserve stays on hold. Positioning for a higher USD/CAD—via futures or call options—fits this outlook. A gap in economic momentum between Canada and the U.S. would support that trade. Create your live VT Markets account and start trading now.

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The United States Redbook Index (year-on-year) rose to 7.2% on 13 February. It was 6.5% in the previous reading. This jump to 7.2% suggests consumer spending is still running hot. That is not helpful if we expect inflation to cool. It also means the economy has more strength than many expected.

Consumer Demand Remains Strong

This figure is not happening in isolation, which makes it more useful for trading decisions. The official retail sales report released on February 15 also beat expectations. It showed sales rising 0.9% in January, versus forecasts of 0.4%. Last week’s January inflation report also surprised to the upside, coming in at 3.3%. Together, these reports point to the same message: demand is still strong. Because the data has been strong, markets are quickly cutting back expectations for Federal Reserve rate cuts. In derivatives markets, the odds of a rate cut at the Fed’s March meeting have fallen to under 15%, down from over 50% just a few weeks ago. We should now assume rates may stay higher for longer. We saw something similar in the second half of 2025. A run of strong data pushed the Fed to signal later cuts, which drove bond yields up and weighed on stocks. That history suggests we should be ready for a similar market reaction now. Over the next few weeks, it may make sense to position for fewer rate cuts than the market previously priced in. One approach is to use options on SOFR futures that benefit if rates stay elevated into the summer. Another is to consider put options on 10-year Treasury Note futures (ZN), which could gain if strong data keeps pushing bond prices down.

Strategies For Higher Longer Rates

A strong consumer alongside high rates creates uncertainty. That often leads to choppier markets. In that environment, buying call options on the VIX index can be attractive. This trade can benefit if volatility rises as the market tries to price the Fed’s next move. Create your live VT Markets account and start trading now.

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Gold rose on Wednesday after dropping to a near two-week low of $4,842 on Tuesday. It traded near $4,952, up almost 1.50% on the day, as buyers stepped in after the dip. Gains were limited because geopolitical tensions eased and the US Dollar stayed strong. US-Iran talks in Geneva reported a “general agreement on a set of guiding principles”. Iranian negotiators are expected to return in two weeks with proposals.

Dollar Support And Fed Outlook

The US Dollar held firm after strong US labour market data, which lowered hopes for an early Federal Reserve rate cut. Fed Governor Michael Barr said rates should stay unchanged for a while, until inflation moves toward the 2% target. Chicago Fed President Austan Goolsbee said cuts could still happen this year if inflation keeps easing. US Durable Goods Orders fell 1.4% in December versus 2.0% expected, after a 5.4% rise in November. Excluding Transportation, orders rose 0.9% after 0.5% previously. Markets now focus on January Industrial Production and the FOMC minutes, followed by US Q4 GDP and the Core PCE Price Index. On the 4-hour chart, price is below the 100-period SMA at $5,011.07 and above the 200 SMA at $4,838.85, with RSI (14) at 43 and ATR (14) at 52.01. As of February 18, 2026, gold is stuck in a tight range, which makes range-based strategies attractive in the near term. Buyers showed strong support near $4,842, while resistance is limiting gains around $5,000. In this setup, selling cash-secured puts below support or selling covered calls near resistance may help generate income. This fits the current indecision as traders wait for clearer signals.

Positioning For Near Term Volatility

The strong US Dollar is slowing gold’s upside, so a cautious or hedged approach may be sensible. The US Dollar Index has held above 104 for several weeks. This strength is supported by a resilient labour market, with more than 200,000 jobs added last month. If traders expect further dollar strength, short-dated put options on gold could help hedge the risk of a drop below $4,800. Over the longer term, the outlook still supports a move higher, helped by expectations that the Fed may pivot later this year. Central banks added a net 800 metric tonnes to official gold reserves in 2025, and that demand helps create a strong price floor. Because of that, any sharp dips toward the $4,800 support zone could be viewed as chances to buy call options dated for the second half of the year. Volatility will be crucial over the next two weeks, especially with the FOMC minutes and PCE inflation data coming up. With gold’s implied volatility near a three-month low, option premiums are relatively cheap. That can make strategies like a long straddle or strangle more attractive. These trades aim to benefit from a large move in either direction after key data, without needing to predict the direction. The most important levels to watch are the moving averages, which may act as triggers for the next move. A clear break and close above $5,011 would signal adding to bullish positions. A sustained move below $4,838 would suggest a deeper correction. Until gold breaks one of these levels, the focus stays on trading the range and preparing for higher volatility. Create your live VT Markets account and start trading now.

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US durable goods orders fell 1.4% in December to $319.6 billion, the US Census Bureau said. This came after a 5.4% rise in November and was a smaller drop than the 2.0% decline economists expected. Excluding transportation, new orders rose 0.9%. Excluding defence, new orders fell 2.5%.

Transportation Equipment Drives Headline Drop

Transportation equipment orders fell $6.4 billion, or 5.3%, to $113.5 billion. This followed declines in two of the last three months. The drop in transportation was the main reason durable goods orders fell overall. After the release, the US Dollar Index (DXY) stayed in positive territory and traded around 97.30. Looking back at late 2025, the 1.4% drop in December was a clear sign that industry was slowing. But the details were more balanced. Orders excluding transportation rose 0.9%, which suggested core business spending was holding up better than the headline number implied. That uncertainty has carried into the new year. The January 2026 report showed a weak rebound: overall orders rose 0.5%, but orders excluding transportation were flat. This points to continued caution from businesses. At the same time, the January jobs report showed a strong gain of 215,000 jobs, leaving a mixed picture.

Inflation Keeps Fed In A Bind

Inflation is the key complication. It is still above the Federal Reserve’s target, with January CPI at 3.1%. A softer industrial sector alongside stubborn inflation puts the Fed in a tough spot and could delay any rate cuts. A similar setup played out in mid-2023, when expected rate cuts were pushed back several times and markets became choppy. For derivatives traders, this backdrop may favour volatility strategies over simple up-or-down bets. With signals pointing in different directions, options strategies that benefit from bigger moves—such as long straddles on the SPX—may fit the environment. The CBOE Volatility Index (VIX) has been rising and recently reached 17.5, up from 14 three weeks ago, reflecting higher uncertainty. Sector trades may matter more as the durable goods report diverges by category. Traders could look at bearish positions in transportation ETFs, which are directly exposed to weaker order trends. At the same time, they may stay neutral to cautiously bullish on broader industrial funds. This approach targets the areas showing weakness without making a broad call on the entire economy. If inflation keeps rates higher for longer, Fed-policy-linked derivatives also deserve attention. Markets have now largely removed the chance of a March cut. Fed funds futures imply under a 15% probability, down from over 60% a month ago. That shift may create opportunities in options on interest rate futures, either to hedge or to position for rates staying elevated. Create your live VT Markets account and start trading now.

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The US Dollar Index (DXY) stayed above 97.00 on Wednesday and traded near 97.29, up about 0.20%. Trading was cautious ahead of US Industrial Production data and the FOMC meeting minutes. US Durable Goods Orders fell 1.4% in December. This was better than the 2% drop expected, after a 5.4% rise in November. Orders excluding transportation rose 0.9%, up from 0.5% previously.

Fed Easing Expectations And Market Pricing

Markets are pricing in almost 60 basis points of Fed rate cuts in 2026. The first cut is expected in June, according to the CME FedWatch Tool. Recent labour data lowered the odds of cuts in the near term. But softer inflation has kept the case for easing later in the year. Major central banks have been cutting their USD holdings. They are concerned about US trade policy and the Federal Reserve’s independence. This has hurt confidence in US policy and raised doubts about the Dollar’s long-term reserve role. DXY bounced from four-year lows near 95.56 in late January, but it is still below key moving averages. The 21-day SMA is below the 100-day SMA. The 21-day SMA is around 97.19, and 98.00 is now a key resistance level. Support sits near 96.50. If DXY breaks below it, the index may retest the 95.56 low. MACD has turned slightly positive, while RSI is 45.84. With DXY holding near 97.29, it is best to be careful about short-term strength. The market is already pricing about 60 basis points of Federal Reserve rate cuts this year, likely starting in June. That outlook puts bearish pressure on the dollar. As a result, rallies may offer a chance to position for a move lower.

Technical Levels And Trade Positioning

Recent data from late 2025 and early 2026 has been mixed. This has helped create the current, temporary stability. For example, the January nonfarm payrolls report surprised to the upside, adding 225,000 jobs. That reduced the most aggressive rate-cut bets. However, last week’s Consumer Price Index showed core inflation easing to 2.1%, which gives the Fed room to cut rates later this year. Technically, the dollar is having trouble clearing resistance near the 21-day moving average at around 97.19. This level may limit upside. The bigger psychological level at 98.00 still looks far away. For derivatives traders, selling call spreads above 98.00 may be a way to collect premium while expecting the rally to fade. The downside still looks more likely in the weeks ahead. A break below 96.50 would suggest the bearish trend is returning. That would increase the chance of a retest of the four-year lows near 95.56 seen in January. Traders could consider DXY puts that expire after the June FOMC meeting to position for that weakness. Longer-term factors also still weigh on the dollar, which supports a bearish view. Protectionist trade policies over the last decade pushed many global central banks to diversify away from the dollar. Recent IMF data for Q4 2025 supports this trend, showing the dollar’s share of global reserves fell to 58.5%. This suggests the current calm is more of a pause than a true turnaround. The upcoming FOMC minutes may not create a clear direction, but they will likely repeat the Fed’s data-dependent approach. That means weaker economic data could quickly increase rate-cut expectations and put more pressure on the dollar. Create your live VT Markets account and start trading now.

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Rabobank says the European Commission plans to present a renewed push for a Capital Markets Union in March, alongside work on a Savings and Investment Union. It adds that the Commission wants to have a phase-one plan for the Savings and Investment Union ready by June. The Commission says the initiative aims to move about EUR 10 trillion in cash savings into more productive uses. It is expected to focus on market integration, supervision, and securitisation.

Savings And Investment Union Roadmap

If progress is not strong enough by June, the Commission may move ahead in stages. This could start with a group of at least nine member states. Rabobank also notes that Sweden may rethink EMU membership, although a formal review would only begin after Sweden’s September election. It links this debate to Sweden joining NATO and shifts in geopolitical risk. We saw the European Commission’s Savings and Investment Union plans gain some momentum last year, following the roadmaps set out in March and June 2025. The phased approach began with a core group of countries, but progress is still slow. Eurostat data released this quarter shows the bloc’s household savings rate remains high at 17.8%, which suggests large amounts of cash have not yet moved into capital markets. Talk of Sweden joining the monetary union increased after the September 2025 election, which triggered a formal evaluation process. This initially supported the krona. However, EUR/SEK has since moved higher from its late-2025 lows as markets accept that any entry would likely take years. Sweden’s strong fundamentals—such as inflation near 2.1% and steady GDP—still make it a credible future candidate.

Implications For Eur Sek Options Traders

For derivatives traders, the long-term positives for the euro are clear, but they are unlikely to arrive soon. Implied volatility in EUR/SEK options may be too low given the chance of sudden political headlines. That could create opportunities for traders looking at straddles or strangles. Since this agenda is developing slowly, traders expecting a stronger euro may prefer long-dated options. This can help limit theta decay while waiting for catalysts to unfold. Create your live VT Markets account and start trading now.

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US housing starts rose to 1.322 million in November, up from 1.246 million in the previous month. This is a month-on-month increase in the annualised pace of new home construction.

Housing Starts Signal Resilience

From today’s date (February 18, 2026), the strong housing starts figure from November 2025 was an early sign that the economy was holding up well. It suggested the housing market had more momentum going into winter than many forecasts expected. That strength has remained an important theme in our view for the first quarter of this year. Newer data supports this story. For example, the January 2026 Consumer Price Index came in hotter than expected at 3.1%. Because of this, markets have quickly reduced expectations for Federal Reserve rate cuts. The chance of a cut by June has dropped from over 70% at the start of the year to just under 40% today. In the near term, we are positioning for a “higher for longer” rate backdrop. That could mean considering short positions in interest rate futures, since we expect yields to stay elevated. Another potential hedge is buying puts on Treasury bond ETFs, as protection if the Fed keeps policy tight through spring. For housing, steady demand suggests homebuilders may be able to handle higher borrowing costs. We are watching the idea of selling out-of-the-money puts on homebuilder ETFs. The thesis is that recent strength has created a solid support level. We saw something similar in 2023. Builder stocks rose even as mortgage rates climbed, largely because there were not enough existing homes for sale.

Positioning For Rate Driven Volatility

This push and pull—an economy that stays firm, and a Fed that stays hawkish—adds uncertainty. We think that can lift volatility. One approach we are considering is buying short-dated call options on the VIX ahead of the March FOMC meeting. This can be a lower-cost way to help protect against a sharp market move after the Fed releases updated projections. Create your live VT Markets account and start trading now.

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US building permits fell month to month in November. They dropped from 1.412 million to 1.388 million. That is a decline of 0.024 million permits. In other words, there were 24,000 fewer permits than the prior reading.

Early Warning From November Permits

The November 2025 decline in building permits was an early warning for the housing market. The fall to 1.388 million suggested that the higher interest rates from the prior year were starting to slow future building plans. This data point set a bearish tone that we have tracked closely. New government data now supports that view. The January 2026 report, released yesterday, showed permits down another 2.1% to a seasonally adjusted annual rate of 1.33 million units. This suggests the weakness from late last year was not temporary. It looks more like part of a wider slowdown in residential investment. For traders, this strengthens the case for bearish exposure to homebuilder stocks. The SPDR S&P Homebuilders ETF (XHB) has lagged the broader market and is down nearly 4% year to date in 2026. In the weeks ahead, we plan to buy put options on XHB, or on individual names like D.R. Horton, to target potential further downside. The slowdown is also weighing on commodities linked to construction. Lumber futures have retreated from their January highs and now trade below $500 per thousand board feet. Traders may consider shorting lumber futures or using options on copper, as demand for building materials could weaken further.

Housing Weakness And Fed Policy Outlook

Ongoing housing weakness could also affect the Federal Reserve’s rate outlook. The Fed has kept rates steady so far in 2026. But if housing data stays weak, the odds of a rate cut later this year may rise. We are looking to position for this with call options on Treasury bond ETFs like TLT, which typically benefit when the central bank turns more dovish. Create your live VT Markets account and start trading now.

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US housing starts rose in November. The reading moved from -4.6% to 6.2%. The latest data shows housing starts increased compared with the prior period. The earlier figure showed a 4.6% drop.

Housing Strength Shifts Fed Expectations

The sharp rise in housing starts in November 2025 showed the economy was stronger than many expected. Markets began to move away from fears of a hard downturn and toward a firmer outlook. This has made us rethink what the Federal Reserve may do in the months ahead. This strength is also supported by the January 2026 jobs report, which showed 215,000 new payrolls. The January 2026 consumer price index also showed inflation staying sticky at 3.1%, slightly above forecasts. As a result, the chance of a March rate cut, once widely expected, has fallen sharply. Derivative traders may want to adjust positions in interest rate futures, including SOFR-linked contracts. We see value in trades that expect the Fed to keep rates steady for longer than the market had priced in. This could mean selling futures contracts or buying put options on Treasury bond ETFs to help protect against rising yields. In equities, homebuilder stocks, tracked by ETFs like XHB, have performed well since the November 2025 release. It may now make sense to manage risk with options, such as buying protective puts or selling covered calls on existing positions. While the January 2026 housing starts report eased to a 1.47 million annual rate, it is still historically strong and continues to support the sector. Strong housing activity also affects commodities like lumber and copper. Lumber futures, which rallied in late 2025, have started to settle near recent highs. We see potential in options spreads on these futures to trade a market that may stay range-bound in the near term.

Dollar Trade As Macro Hedge

A more hawkish Fed outlook often supports a stronger U.S. dollar. With other global central banks signaling a more dovish stance, we think long positions in U.S. Dollar Index (DXY) futures could do well. This can also serve as a macro hedge against ongoing geopolitical and economic uncertainty. Create your live VT Markets account and start trading now.

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