• ...the classic pattern of a second upward wave...
• ...what you think is beautiful isn’t beautiful...
• ...what is a clamp...
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The regulatory environment is becoming stricter. This is a process of removing bad money from the market, and we will firmly support it. However, some posts are still worth keeping on file. For new friends, more frequent conversations with you are also quite necessary, so this midweek short-note column was created. It will mainly use the PDF column to share informal thoughts and some time-sensitive items. We hope you enjoy it.
Posts are basically impossible to publish, or get deleted soon after they go up, so we’re trying to communicate with you more frequently in the form of PDF.
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I. The First Gold Candlestick in Precious Metals
CMX silver (daily chart, as of 260805)
The first bullish volume bar... (so far)
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CMX gold (daily chart, as of 260805)
During the Chinese morning session, I highlighted several proxy securities for precious metals. They subsequently all recorded large single-day gains. Our GDX and SIL positions continue to edge up to new highs.
A certain micro proxy (daily chart, as of 260805)
This is an excellent example of the first range-expansion candlestick following a Clamp Breakout. When we published this before the market opened, the price was still below the white line. For more examples of Clamp Breakouts, new friends can go back and read the Casebook series, especially the second installment“Casebook (Two): A Deeper Understanding of the Odds”...This is a classic pattern of a second upward wave.
GDX (daily chart, as of 260805)
SIL (daily chart, as of 260805)
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II. The Beauty-Contest Fields in the Master Table
The beauty-contest fields differ somewhat from the four-quadrant RRG used in the market. The Planet’s beauty-contest engine is closer to Keynes’s market beauty-contest logic. This is also the source of its core value in practical use. The core problem with traditional RRG, represented by jdk RRG, is that you can use it to see what happened in the market in the past, but you cannot see today, and it offers no guidance for tomorrow. In the end, you get a fairly generalized result that can only be admired from afar.
The core of the beauty contest can be divided into three layers:
Layer One: Fundamental Value
Which stock do I think is truly the best, cheapest, and has the best earnings prospects.
Second layer: market preference
Which stock would most investors like.
Third layer: higher-order expectations
I judge which stock other investors think “most investors” will like.
Investors are trying to predict “what the average opinion thinks the average opinion will be.” In other words, the market trades not only on judgments of value, but also on judgments about others’ judgments. The Beauty Contest field in the master table engine uses monitoring of trading behavior to attempt this kind of judgment about others’ judgments—that is, to identify which stock the market consensus is choosing, and which stock the next round of consensus might shift toward...
AMD (daily chart, as of 260805)
A mainland small-metals trading company (daily chart, as of 260805)
Taking the two charts above as examples, the “Beauty Contest” signal in the main dataset also performs exceptionally well at the individual-stock level. The intuition is simple: when an event emerges as an apparent shock, informed market participants have often already priced it in. We aim to respond effectively, with a clear basis for action, by identifying it as early and consistently as possible.
...
To avoid confusion, starting next week the four Beauty Contest states will be changed from the generic Lagging, Improving, Leading, and Weakening to terms that more closely reflect the core calculation logic:Rising(not yet a winner, but attention and relative momentum, as indicated by the market as a voting machine, are increasing),Crowned(becoming the current consensus choice among the market’s smart money),Fading(still holds a position of relative standing, but consensus and momentum are waning),Forgotten(has already left the center of market attention)..
This is a very complete life cycle:
Forgotten → Rising → Crowned → Fading → Forgotten
Rising: the candidate enters the spotlight
Crowned: consensus completes the coronation
Fading: consensus begins to unravel
Forgotten: exits the market narrative
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What you think is beautiful isn't what matters; what the market thinks is beautiful is. Calling a deer a horse: whether you think it's a deer or a horse doesn't matter. What matters is what those with pricing power think.
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Three. Semiconductors shift to bullish as planned
SOXX (daily chart, as of 260805) broke through the planned price in the weekly report
SOXL (daily chart, as of 260805) shared as a courtesy
Semis hit the planned Bull Trigger level flagged in the weekly report yesterday. Here’s a quick update on the structure, though the chart still looks ugly from a technical perspective.
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Four. Miscellaneous: Use discipline and ability to draw your own life's...
Use discipline and ability to draw your own life's K-line chart: Don't fear hitting bottom; draw your own bottom formation. Don't fear volatility; draw your own support line. When good things are coming, don't get carried away; wait for your own SO overbought reversion. Don't fear lagging; build strong momentum and move into Improving first. Don't fear the bad and painful downturns; draw your own engulfing pattern, FBO, and reversal candlestick.
...
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Five. Miscellaneous: A few simple ways to recoup the membership fee...
A few ways to recoup the Planet membership fee (note: for a Planet product, you should expect at least several-fold or even dozens-fold excess returns. This is also a trade, so make this trade count):
1) Avoid one or several major drawdowns…2) Ride out one or several major swings…..3) Identify one or several trading opportunities…4) Keep your hands and mind in check once or several times; don't wear yourself out on meaningless small swings, and save time, energy, and health for life beyond trading….5) Accumulate things that truly belong to you, things no one can take away…
Understand that you have to rely on yourself, not others. Have a basis for when to enter and exit, rather than relying on subjective guesswork. Sit back and watch calmly, rather than rushing about in a panic. Manage failure and stay in the game. While people outside are panicking, you can keep facing everything with a smile, because there are no surprises in the market and nothing to tough out blindly; we face uncertainty with our own unique certainty and engage with it deftly.
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A friend messaged me privately to ask what a bracket is... The image below shows it:
It's thanks to everyone's kind regard, but I'm not important, and I have no plans to become famous. I'll keep my head down; the content in our Planet is for our own internal use, and we try not to share it outside.
Thank you all here. I'm grateful to all my friends.
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Note: All content in this document is for reference only. It does not constitute any investment advice, nor does it serve as a basis for any laws, regulations, or regulatory policies. Investors should not use or rely on such information as the basis for decision-making.