Valens Market Phase Cycle Monitor – February 2026 – These Are the Dips Investors Should Be Buying
February 19, 2026
- These Are the Dips Investors Should Be Buying. Uniform Earnings grew a strong 8% in 2024, and they are expected to increase another 14% annualized across 2025 and 2026, driven by significant reinvestment, margin improvement, and long-term capital projects. Businesses are continuing to fund capital expenditures internally, with particular focus on productivity-enabling technologies like AI, data centers, and supply chain modernization.
- Credit conditions are improving. Banks are slowing down their tightening, credit spreads remain historically tight, and C&I demand is rising. The Fed is in the midst of a rate cutting cycle, fueling lower credit costs and an improving borrowing environment. Credit creation may accelerate further this year, fueling incremental growth and investment activity.
- Sentiment is still strong. The market’s rally has pushed active equity allocations, investor correlations, and put/call ratios into elevated levels. Even after the recent pullback, they are still above average. This could suggest the selloff could continue in the coming weeks.
- Valuations have moderated. Between the tech and software selloff and positive earnings revisions after earnings season, the market’s Uniform P/E ratio now sits at just above 24x, which is slightly above the normal range for this environment.
- Monthly inflections:
- Credit (55% of macro outlook): Positive (no change)
- Earnings Growth (30%): Positive (no change)
- Momentum/Sentiment (10%): Negative (no change)
- Valuations (5%): Neutral (no change)
- Timetable Recommendation: 50% Equity/50 Bond Split for 5-10 Year Money and 6 Month Dollar Cost Averagin