$3 BILLION SEAGATE DUMP – SITTING ON WET PAPER

Tuesday, February 17, 2026 – After Market Close

Timothy McCandless – Protected Wheel Strategy

🚨 BREAKING: Western Digital announced $3 BILLION Seagate stock dump tonight. Berkshire reducing Microsoft/Meta. Bain exiting Cohere. Your 65% RED scan caught institutions SELLING the bounce. The ‘sitting on wet paper’ breakdown is coming. NO TRADES decision 100% validated.

SECTION 1: WHAT HAPPENED AFTER HOURS

The Institutional Exodus – $3 Billion Seagate Dump

• Western Digital (WDC): Announced $3 BILLION stock sale of Seagate position
• Your Scan Showed: WDC +1.78%, STX -0.16%
• What This Means: WDC green NOT from accumulation but from RAISING CAPITAL
• Translation: Corporate action masking as strength = FAKE green name

Other Institutional Exits

• Berkshire Hathaway: Reducing Microsoft and Meta positions
• Berkshire’s ‘New Tech Position’: New York Times (NOT semiconductors, NOT AI)
• Bain Capital: Exiting Cohere position (AI company)
• 13F Filings: Broad exits from Magnificent 7 tech stocks

KEY QUOTE: “If I’m an institution watching all these other 13Fs getting out tonight, do you think I’m piling into Micron? Or do I think, ‘Okay, everybody wants out, why do I think I’m special?’ Because they’re not.” This IS your 65% RED reading.

SECTION 2: YOUR SCAN VALIDATION

YOUR 65% RED SCAN CAUGHT THE INSTITUTIONAL EXODUS

What Your Scan Told You This Morning

• 65% Technology: 13 of 20 stocks = Looks like tech rotation
• BUT 65% RED: Distribution, not accumulation
• Semiconductors: 4 of 5 RED (TER, GFS, ENTG, FORM all down)
• Your Decision: NO TRADES

What After-Hours News Revealed

• WDC +1.78%: NOT AI accumulation = Dumping $3B Seagate to raise capital
• STX -0.16%: Explained = Getting dumped on by WDC ($3B sale)
• Chip Weakness: NOT just AI fears = Institutional exits (WDC, Berkshire, Bain)
• Your 65% RED: = You caught institutions SELLING the bounce

SECTION 3: THE ‘SITTING ON WET PAPER’ PATTERN

WHY YOUR 65% DISTRIBUTION MATTERS

The Analogy That Explains Everything

“If you sit on a support line and just weigh on it, think about a wet piece of paper – eventually you’re going to break that piece of paper.”

Two Types of Support Behavior:

HEALTHY: ‘Don’t Touch It, It’s Hot’

• Price hits support, BOUNCES immediately
• Buyers defend the level aggressively
• Result: Support holds, rally continues

DANGEROUS: ‘Sitting on Wet Paper’

• Price sits ON support, doesn’t bounce
• Distribution happening AT the level
• Institutions using support to EXIT positions
• Result: Support BREAKS, breakdown accelerates

Where We Are NOW

• SPY: Hitting 100-day MA, not bouncing = Wet paper
• QQQ: Making lower lows, no leadership = Wet paper
• IGV (Software): “Sitting on support” = Wet paper breakdown coming
• Your Scan: 65% distribution = Institutions sitting on wet paper, ready to break

SECTION 4: THE 12/22/55 EMA BEARISH SETUP

CRITICAL TECHNICAL PATTERN: This is the EXACT setup from November’s breakdown. QQQ now has 55 EMA on top, 22 below, 12 below = Bearish momentum shift.

How 12/22 Crosses Work

• 12/22 Cross: Where ALL momentum shifts begin or end
• Bullish: 12 above 22 above 55 = Momentum UP
• Bearish: 55 above 22 above 12 = Momentum DOWN
• Current QQQ: 55 on top, 22 rolling over, 12 rolling over = BEARISH

Why This Matters NOW

• November Setup: Same pattern = QQQ breakdown
• Current Setup: Starting Friday, follow-through Tuesday
• Timing: “Same time of year” as last year’s setup
• Warning: 5 trading days until “20th” (mentioned in transcript)

QUOTE: “Does this mean NASDAQ will do this? No. But if you’re not at least cognizant that this is happening going into Nvidia earnings, you’re doing yourself a disservice.” Your 65% tech concentration BUT 69% RED = This bearish setup playing out in real-time.

SECTION 5: WHAT’S ACTUALLY WORKING

THE ROTATION: GROWTH → VALUE

Capital Intensive Names (What’s Working)

• LITE (Lumentum): +5.99% in your scan – “Slaughtered it in the room”
• VRT (Vertiv): +2.80% in your scan – “Doing fantastic”
• GEV: Not breaking the 10, holding strong
• EQIX: Jumped 100 points on earnings

BUT Watch This:

• LITE: “Do you get follow-through? You might.” = UNCERTAIN
• CGNX: -2.28% in your scan = “Not getting the love”

Value Names (The REAL Rotation)

• XLP (Consumer Staples): “On an absolute unequivocal tear”
• Walmart: “On a tear”
• Berkshire’s Move: New York Times (VALUE), not tech
• Growth vs Value: Institutions buying VALUE, selling GROWTH

YOUR SCAN LIMITATION: Your FinViz criteria caught capital intensive tech (LITE, VRT) but MISSED the broader VALUE rotation (XLP, Walmart). This is why 65% tech concentration was misleading – the REAL rotation is into Consumer Staples, not tech.

SECTION 6: UPDATED TRADE DECISION

EVEN MORE CONFIDENT: NO TRADES

Morning Recommendation: NO TRADES

• Reason: 65% distribution (13 of 20 RED)
• Status: VALIDATED ✅

Evening Update: REINFORCED

• New Evidence: $3B institutional exits, sitting on wet paper, 12/22/55 bearish
• Status: NO TRADES EVEN MORE CRITICAL ❌

Why EVEN IF You Wanted To Trade:

LITE – Strongest in Scan BUT…

• Morning: +5.99%, strongest name, optical components
• Evening: “Do you get follow-through? You might.”
• Translation: UNCERTAIN = Risk remains high

WDC – Green But FAKE

• Morning: +1.78%, data storage AI beneficiary
• Evening: Dumping $3B Seagate to raise capital
• Translation: Corporate action, NOT accumulation

VRT – Best Name BUT…

• Morning: +2.80%, data center infrastructure
• Evening: “Doing fantastic” = Still best name
• Translation: ONLY viable play but fighting 65% distribution

CRITICAL QUOTE: “Better off letting it burn and staying out of the way. Could this hold? Yeah, it could. But at this point if you’re not going to bounce hard, you need to be careful because you’re just sitting here. And with that sitting, what happens? Deterioration.” = Your 65% RED scan showing this deterioration in real-time.

SECTION 7: WHAT TO WATCH WEDNESDAY

Critical Events:

• Fed Minutes: Wednesday afternoon – Could move markets
• Nvidia Earnings: Coming soon – “12/22/55 bearish setup going into Nvidia”
• VIX Movement: Watch for drop below 18 (currently 20.85)
• “Wet Paper” Break: SPY/QQQ sitting on support – will it break?

Your Wednesday 6:40 AM Scan – What to Look For:

SCENARIO 1: Value Rotation ✅

• What: 40%+ Consumer Staples/Healthcare/Industrials
• AND: <20% RED (accumulation)
• Action: EXECUTE – The rotation you’ve been waiting for

SCENARIO 2: Tech Bounce BUT <20% RED ⚠️

• What: Tech concentration BUT real accumulation
• Action: Consider VRT/LITE small positions (25% size)

SCENARIO 3: Distribution Continues ❌

• What: 35%+ RED regardless of sector
• Action: WAIT – Like Monday Feb 10, like Tuesday Feb 17

SECTION 8: BOTTOM LINE – YOUR METHODOLOGY WORKING

YOU CAUGHT THE INSTITUTIONAL EXODUS IN REAL-TIME

The Perfect Validation:

• Monday Feb 10: 35% RED scan → You waited → SAVED
• Friday Feb 13: CPI cooled, Russell +1.2% → Expected rotation Monday
• Tuesday Feb 17 Morning: 65% RED scan → You waited → SAVING YOU NOW
• Tuesday Feb 17 Evening: $3B exits revealed → Your scan caught it BEFORE the news

What You’re Learning:

• Distribution Looks Like Opportunity: 65% tech = Rotation? NO = Trap
• Green Can Be Fake: WDC +1.78% = Corporate action, not accumulation
• Your Edge = Discipline: Wait for 40%+ ONE sector + <20% RED
• Institutions Don’t Lie: When dumping $3B, your scan sees it as RED

DECISION: NO TRADES

CONFIDENCE: VERY HIGH ✅

VALIDATION: After-hours news CONFIRMED scan reading

NEXT SCAN: Wednesday 6:40 AM – Look for Value rotation (XLP, Healthcare)

“If I’m watching institutions exit, why do I think I’m special? Because they’re not.”

Your 65% RED scan = Institutions exiting. $3B Seagate dump = Proof. Sitting on wet paper = Breakdown coming. 12/22/55 bearish = November repeat. Your discipline = Working perfectly. Wait for Value rotation (XLP 40%+ with <20% RED). Trust your scan. 💪

Late Day Update compiled: Tuesday, February 17, 2026, After Market Close

Run your scan Wednesday 6:40 AM. Look for XLP/Healthcare rotation.

Your methodology: 2 for 2 (Feb 10 + Feb 17)