February eighth, two thousand twenty-six （260202-260208）
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*Recently, the platform has often deleted our posts, so we will gradually replace some sensitive terms. Starting with this article, we will refer to B**T*C as “Little Yellow.”
Please note! Many points have been explained once and will not be repeated!!! Be sure to review all previous Weekly Wraps on your own!!! This is essential!
In the new weekly publication, we have made the following changes:
1) We have reordered major assets according to stronger logical links and explained more clearly how they validate one another through their interrelationships, giving readers a comprehensive picture to help them find anchors across asset classes... The process of seeking certainty is, in essence, the process of finding anchors for pricing...; 2) We have expanded the detailed analysis of developments during the current week, laying the groundwork for expectations over longer cycles. Alongside supporting allocation decisions, this also offers readers some guidance for short- and medium-term actions... After all, every long-term decision is simply a rolling series of short-term decisions...; 3) We have reduced coverage of noisy asset classes. For positions that have been exited, and assets with no major fundamental changes (as noted the previous week),we will no longer provide ongoing updates in the weekly publication that take up too much space. Instead, we will add coverage of assets that are now awaiting entry... After all, what matters for decision-making is what is happening now and what lies ahead. This point requires your cooperation: please review the historical content yourselves; we will not give everyone a history lesson every week... But review is necessary and absolutely cannot be skipped.Each week, please download and archive the weekly publication yourselves, and keep track, make comparisons, and continue to review and correct the historical content.Before reading the weekly publication, please also read the notes updated during the current week or on historical trading days.；4) We will rebuild our analytical frameworks for all asset classes from the ground up, while also seeking to explain some essential foundational concepts to give everyone a stronger basis for understanding how these categories behave.；5) The content will gradually incorporate our own understanding of the world of investing and trading, and systematically explain our ideas and principles. These are our views alone, offered to spark discussion and for reference only; we hope you will bear with us if anything is lacking.
The weekly publication has been completely revamped starting 251109. For the historical framework and content, see “WEEKLY WRAP 251026” and earlier material.
Maybe I’m getting old and starting to ramble. Thanks for not finding it annoying. This weekend’s issue begins with a few posts:
1/ Mindset and methods: How to deal with a major drawdown
2/ Rethinking the Planet’s positioning: I can’t, and don’t want to, be someone who pretends to be asleep
3/ On the criticism we’ve faced: the week before last, gold and silver bulls fiercely opposed and criticized us for shorting gold and silver; last week, Xiao Huang bulls fiercely opposed and criticized us for shorting Xiao Huang... But sorry, we’re the ones who made it to the end:
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Let’s make “life” a verb together.
I.U.S. Dollar Index
Chart: U.S. Dollar Index (four-hour chart, as of 260208)
Since we switched from short to long, the dollar has climbed steadily and, as expected, is now facing resistance at that annual-scale rising black line.(For the four lines on the U.S. Dollar Index, see “WEEKLY WRAP250125”). As of now, our model estimates that the bullish trend would end near 97.58. Of course, it’s also possible that it breaks below that level during the week next week, then breaks back above it. This is a more common pattern at the edge of a key level, where there will be plenty of back-and-forth near the black line.
II.European defense spending
“WEEKLY WRAP 260104” discussed LMT, a representative European defense stock that we went long alongside others
(as of the year 25, LMT had exposure to EU defense spending equivalent to 10%+ of revenue),
the strong rally is still continuing.：
Chart: LMT (daily chart, as of 260208)
Since we publicly entered the trade, +~30%,
The take-profit level has already been raised to around 597 (sharing this as a courtesy).
Just a casual comment: this has run much faster than expected. It almost seems to be on track to become one of the year’s memorable successful macro bets. Let’s see how far it runs; if things go well, we’ll give it a place in the year-end review for 26.
III.EUR/GBP, GBP/USD,
The pound was our first focus in today’s FX trading. At the dovish BOE meeting, an unexpectedly 5 to 4 vote decided to leave rates unchanged. The policy shift was driven by the committee’s increased confidence that the risk of persistent inflation had declined, as reflected in the central bank’s lower inflation forecasts, while downside risks to growth and the labor market remain, The wording on the policy path changed slightly, from “gradual downward path” to “Bank Rate is likely to be reduced further,” implying at the margin a greater sense that a cut is imminent.
Of the four dissenting votes, Breeden’s was the most surprising, while Mann’s section in the minutes also showed that her position was closer to supporting a rate cut. Breeden was once again the pivotal vote; she indicated in both the minutes and her remarks at the post-meeting press conference that she was open to a rate cut in 3.There will be two labor market reports and one inflation report before the next meeting.
Chart: Minutes of BOE's meeting
If the unemployment rate rises further as expected, that would support another rate cut.More broadly, BOE is moving toward the neutral rate. The market is currently pricing a terminal rate of 3.26%, not far from the midpoint of the 3% to 3.5% range given by MPC. Cutting rates to the lower bound of that range would not be controversial, but going lower would require the trend of persistent labor-market weakness to continue. As inflation moves closer to target in the second quarter, with base effects fading, the market will become more sensitive to a further rise in the unemployment rate.
Chart: Sterling comes into focus
In Europe, the most likely scenario for ECB remains to hold steady.Although the market is focused on EURUSD's fluctuations, Lagarde has not shown any particular concern. The euro has not changed much against the dollar or on a trade-weighted basis since last summer, and the fluctuations in the first half of 2025 were already incorporated into the forecasts, effectively “resetting the clock” on the exchange-rate impact. For broader concern to emerge at the Governing Council level, there would need to be another rapid and substantial move (for example, a broad-based move from 5% to 10%?), particularly if it were driven by external factors.
One thing to note here is that this week's German industrial production data and weaker manufacturing sales indicate that German industry's near-term momentum remains weak. Even so, forward-looking data are much brighter, with the sharp recovery in orders in recent months in particular still pointing to solid momentum.This may matter for European equities, and perhaps for some supply-related trades, but unless the market expects German spending to create inflationary pressure, this is not a front-end rates trade The distribution for ECB remains very tight, so we also do not think a recovery in German spending will be a reason for the European rate-hike distribution to widen.
Technically, EURGBP has reached the end of this trading pattern; a break above the upper bound would be an entry point for a long position, with a stop-loss near the red line.
Chart: EURGBP (daily chart, as of 260208)
In the United States, nonfarm payrolls beta is rising, and next week will be crucial.Cross-asset volatility is picking up for a range of technical reasons, including questions about AI's capex reaction function, the speed of recent market moves (especially in commodities), and generally elevated positioning.But So far, from a cross-asset perspective, rate volatility has remained relatively contained, mainly because the macro outlook has not really changed.
This week's weaker JOLTS and jobless claims data show how this dynamic could be disrupted, and further fueled some of this week's risk-off trading. With this week's data coming in soft, the market's sensitivity to next week's nonfarm payrolls report has increased. If the unemployment rate shows signs of rising and the labor market fails to stabilize, markets will become more unsettled and rate volatility will rise. Conversely, if the unemployment rate holds steady or edges down further, that would help stabilize the shape of the front-end rate distribution again and allow the Fed to remain in wait-and-see mode, especially before Warsh takes office.
Our focus will be on next week's nonfarm payrolls report,
watching the dollar index to decide whether to increase our position.
Chart: USDGBP (daily chart, as of 260208)
Since USDGBP shifted from a downtrend to range-bound trading last July, its price has remained within the purple rectangle. The failure of the move lower at the red circle will provide momentum for a move back across the rectangle. The target for this trade is the rectangle's upper bound; a break below the lower bound would be the exit.
Four.USD/JPY, Nikkei futures
Chart: USDJPY (daily chart, as of 260208)
We closed the position and didn’t continue trading here, despite having a clear view. For now, Takaichi economics looks set to remain the prevailing narrative. Just before this was written, the LDP won 234 seats (more than half of the 233 seats), but this is not the optimal scenario, as it is not radical enough to produce a strong trend.
The right-tail scenario we are considering going long on is the LDP winning a larger two-thirds majority in the vote, or more than 310 seats. This would allow a party or governing coalition to pass bills rejected by the House of Councillors, where the LDP currently does not hold a majority..
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It’s hard to say. The path of least resistance and our preference still point to higher mid-curve rates, but we’ll wait for a pullback from current levels before adding to the position. The FX picture is more complicated: moderate gains are the baseline scenario, but USDJPY has already swung back toward intervention risk, which is also rising and will constrain further near-term gains.
The two blue lines on the chart have temporarily put us off the yen.
Japanese equities will rise, but as above, the lack of a sufficiently radical outcome means the price swings may be modest, and the risk-reward is not attractive either.
Chart: Nikkei futures (daily chart, as of 260208)
We went long the Nikkei for a spell when it broke out of the purple rectangle in the middle of last year, holding the position until around year-end, where the red arrow on the chart above ends. At the time, the risk-reward was excellent and everything was just getting started; today, the 1x target measured from the rectangle has been reached. Combined with an election result that fell short of our right-tail expectations, the outlook here (the red circle on the chart above) is for choppy trading or a pullback to the blue line.
V.U.S. equity market
Chart: SPX (daily chart, as of 260208)
The U.S. equity market looks rather poor at the index level, with continued small swings within the purple rectangle. Our index model has performed badly here; signals are mixed. In fact, on the 5th, the silent moving average issued a downside signal, followed by a bullish candle on the 6th—a bullish engulfing pattern here. In any case, things may turn positive again next week, but breaking above the upper boundary will be difficult. We’re not trading the indexes.
Chart: NDX/RUT (weekly chart, as of 260208)
Behind the confused state of the indexes, there is often rotation in the underlying market structure.NDX/NDX has broken below support, with the 9.0 target price now firmly in its sights.
Mid-cap stocks have also seen a clear reversal since 25:
Chart: NDX/IWR (daily chart, as of 260208)
The targets of the two H&S patterns in NDX/IWR point to two key price levels in 25 7 and 25 4, respectively. The expected path from here is shown by the red line.
Chart: Some details from Xingzhi Planet (https://www.meridianresearch.app/home?product=us-strategies）
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This is paradise for bottom-up traders.
Six, European markets (UK100, GER40)
Chart: UK100 (daily chart, as of 260208) (the model shows the LONG ONLY portion only)
UK100, when an ascending trendline makes a second attempt at the top-side resistance, it often succeeds.or a third attempt... but either way, both price space and time are getting increasingly compressed.The final episode should air before March 2026.
Chart: GER40 (daily chart, as of 260208) (the model shows the LONG ONLY portion only)
GER40 has been coiling inside this range for far too long. Compression at this scale usually resolves with a meaningful breakout.
Six, silver, platinum
For the overall assessment, see “WEEKLY WRAP 260104” and the previous batch of related long-form Notes.
Chart: CMX silver (4-hour chart, as of 260208)
Chart: Several short positions have all been closed
Price has now reached the key point on the descending green trendline; the resistance after a breakout is around 90.
At this point, both long and short risks are high on the smaller time frame (clarity is declining), so we will temporarily stop syncing the model figures. Thank you for your understanding.
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Chart: CMX silver (daily chart, as of 260208)
The daily model triggered a short around 101.6. At present, calculations indicate that price needs to get back above 92 at a minimum to start the next daily-scale long trend. In addition, the silent moving average is still signaling a downtrend.
65 Over-sold, there should be no further adding to shorts here; just hold the position and wait for a passive exit.
Although the narrative still supports gold and silver, we trade price.
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Read article, review this one yourself, remember the successful lessons, and don't become complacent,
Next time, let's work together to do even better.
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Chart: SLV (daily chart, as of 260208)
I don't show the smaller-time-frame model mostly to protect everyone; I'll share what is appropriate and helpful. The chart above is SLV. Last year, we established a core position against the trend at the three orange circles, then added to the trend when 25.11.25 turned from red to blue. Currently, although the trend model is still flat, we re-established part of the core position here at the 2x target price. This is actually also the 50 daily-chart level. SeeView notethis post:
Chart: A post about rebuilding a position around 20 or 50 DMA (depending on the different instruments’ microstructure)
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Platinum:
Chart: NMX platinum (daily chart, as of 260208)
Oversold near the previous breakout level at 1770 provides support, but downside momentum has not eased and the model remains short.
The silent moving-average downtrend signal has also not disappeared.
Likewise, there should be no further adding to shorts here; just hold the position and wait for a passive exit.
Seven. Gold
Chart: CMX gold (daily chart, as of 260208)
Likewise, the model currently has no signal to go long again. GC found precise support and bounced at the horizontal line we drew months ago (the measured price we drew was 4428.3, while the actual low at GC was 4423.2).
Chart: Gold/silver ratio (daily chart, as of 260208)
As expected, the gold/silver ratio reached last week’s 70 target price.
Chart: GDX (daily chart, as of 260208)
For our position in GDX, the last time we added substantially was at the two red circles. This time, the price of GC dipped down, while GDX did not move. We may not get a chance to buy at a bargain price, and that’s fine too.
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The trend model is flat, waiting to go long again at any time.
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Eight. Copper and aluminum
For an answer on when we will end our industrial-metals bet, see “WEEKLY WRAP 251221”
This week I posted on the platform about the possibility that capital could shift from precious-metals trading to industrial metals. The leaders among industrial metals are copper and aluminum, with copper in first place and aluminum second:
Chart: About the switch (View note）
In fact, the main reason we have been so enthusiastic about copper all along is this chart:
Chart: Shanghai copper (weekly chart, as of 260208)
On the weekly timeframe, this breakout is extremely significant. It is hard to believe that such a meaningful breakout would stop here; it would be rather disappointing if it did.
If you look only at the price of copper, it is quite clear that it is indeed hovering near historical highs..
But from the perspective of the copper/gold ratio, it is hard to say whether “this time is really different”:
Chart: Copper/gold ratio overlaid with copper price (weekly chart, as of 260208)
In fact, The copper-gold ratio has a trendline extending from the year 1993 to the present (the green line in the chart above), and every time it has touched this green line, without exception, it has corresponded to a cyclical low in copper prices (the red circles in the chart above); in other words, the so-called historical rotation from precious metals to industrial metals is a price pattern that has persisted for decades...
The only difference is that, this time, copper prices are unusually high on the chart...
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Chart: Shanghai copper (daily chart, as of 260208) (the model displays the LONG ONLY portion)
The silent moving average is still in a downtrend, but the model has turned bullish. Extremely high risk.
Chart: FCX (daily chart, as of 260208)
Proxy basket, exited to take profits, 34 bars, +35.84%; no further long signals to date.
Chart: Global inflation proxy indicator for industrial metals (weekly chart, as of 260208)
Back above the blue line.
Nine. Little Yellow and Its Friends
Chart: Little Yellow (daily chart, as of 260208) (the model displays only the SHORT ONLY portion)
A smooth short trade, successively breaking through our 1x target (74.5k) and 2x target (65k); around 60k, the position management system issued a signal to reduce the short position (the orange-circled B point on the chart) (B in a short position and S in a long position are signals to reduce the position!), and we took profits and reduced our position here.
Chart: This is actually where the 200-week moving average is
This one is very important.
Ten. The China market
How has everyone felt since the silence began? Has everything generally become less comfortable? When the indices go silent, the market sees 1) more false breakouts and more genuine breakdowns, 2) key prices behaving erratically, and 3) trading themes struggling to persist...
Chart: Shanghai Composite Index (daily chart, as of 260208)
The uptrend has been silent since 260120 and remains so to date, and has shown a shift to downtrend since 260203;
Chart: Shenzhen Component Index (daily chart, as of 260208)
Likewise, the uptrend has returned to silence since 260120 and remains so to date, and has shown a shift to downtrend since 260203; although 26-29 saw a brief uptrend for a few days, the Shanghai Composite did not provide confirmation. If you have been participating in the market, you can check whether these days, 26-29, have been relatively decent compared with the period since 0120.
Many times, market participants think their profits are due to their own ability, when in fact, most of the time, it is simply because we are operating in a broader environment that favors the outcome we want. Individual skill and ability are often unimportant; what matters is You have to respect the market。
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Hang Seng Tech has returned to quiet from 260119, turned to downtrend at 260130, and fallen below its annual moving average at 260202.
Chart: Hang Seng Tech (daily chart, as of 260208)
Eleven, Oil (the oil and gas allocation position and oil prices’ 200 DMA)
Chart: WTI (daily chart, as of 260208) (model shows LONG ONLY portion only)
Above the annual moving average and entering an uptrend structure; continue holding the long position. Confidence is not that high.
Chart: BRENT (daily chart, as of 260208) (model shows LONG ONLY portion only)
Likewise, above the annual moving average and entering an uptrend structure; continue holding the long position. Confidence is not that high.
View noteThis one is very important; review and understand it on your own.
Several allocation positions are still being held:
Chart: OIH (daily chart, as of 260208)
Chart: XES (daily chart, as of 260208)
Chart: XES (daily chart, as of 260208)
Chart: A supplement on this seasonal trade, which was the original reason for entering (https://www.meridianresearch.app/home?product=cross-market-strategies）
Shipping is also linked to oil and gas. This is why, about a month ago on Ganglong, I asked everyone to pay attention to shipping stocks above the 250 DMA. The corresponding trading proxies in the mainland market are also generally up by +~30%...
To be honest, so far we still do not “believe” the related fundamental narrative for this part. If anything, our view is not even very consistent with the direction of our current positions. In our assessment, crude oil can only fluctuate within a stable price range. Of course, a view is just a view; if the market is paying us, there is no reason to refuse.
Manage your trailing take-profit yourself.
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Twelve. EEM (1x target price)
Chart: EEM (weekly chart, as of 260208)
As expected, it broke through the 1x target price level. This is the core proxy for going long non-U.S. markets. Continue to hold.
Someone sent me a private message asking why I don’t talk more about EEM. Here’s a brief general response:
The reason I rarely mention it is that this is a consensus trade. When we do this kind of trade, we just put our heads down and do it, because there is nothing distinctive about our approach, and it would be embarrassing to call it our own view. The view of going long emerging markets has little value in itself; since last year, it has been the consensus view of everyone at every Wall Street institution. You just need to be able to hold on.
Thirteen. Uranium
Chart: URA (daily chart, as of 260208) (the model displays LONG ONLY positions only)
The uranium trade remains valid over the foreseeable future. It is currently closed; we are waiting to go long again.
(End of article)
A quick plug: the companion US Stocks, A/HK Stocks, and Commodities planets, with content continually being improved.
US stocks:https://www.meridianresearch.app/home?product=us-strategies(Xingzhi)
A/HK stocks:https://www.meridianresearch.app/home?product=asia-strategies(Honglong)
Commodities:https://www.meridianresearch.app/home?product=commodity-strategies(Dixin)
Note: Everything in this article is for reference only and does not constitute investment advice, nor is it a basis for any laws, regulations, or regulatory policies. Investors should not use or rely on this information as a basis for making decisions.