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Correlations should be subordinate to the structure itself
25 October 2026
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Zero. Correlations should be subordinate to the structure itself
This week, in response to a user’s question, I discussed some aspects of the third of our three systems: capital flows and relative-value analysis. This topic comes up less often in our discussions because it is counterintuitive, goes against conventional wisdom, and is difficult to explain clearly. If you have received some academic training, you will probably find my relative-value matrix hard to accept. My relative-value framework comes from the section on spreads in Graham’s Security Analysis, and has since undergone several iterations at the data level. It primarily addresses a key question that Graham did not answer at the time: does an arbitrage mechanism that ordinary market participants can still use really exist? It may have existed in the early days, but the window of opportunity left by this mechanism is getting smaller and smaller.The certainty with which cross-asset relationships are deified has in fact become a poison today—and the more certain you are about something, the more badly you often end up losing.....
(Those interested can read John Murphy’s Intermarket Analysis;)In addition, the kind of macro-level analysis of mechanisms that you can see in Bridgewater’s early Observations has become increasingly scarce and shallow over the past decade or so, shifting toward chart-based analysis (which in essence has also become a form of technical analysis or a bottom-up approach), and that is because Some of the mechanisms behind this excess return no longer exist (with the development of the internet and the flattening of information)..
Cross-asset price ratios cannot tell you which asset will rise and which will fall—because if such a relationship really existed, by the time it became observable, the spread would most likely already have been erased by algorithmic trading in milliseconds, or at most seconds.。
All the price-ratio matrix can tell you is:1/ whether the widening and narrowing of volatility is genuine, 2/ whether anomalous divergences are mutually validated across assets over time, 3/ and provide path inputs as background, to help identify market regimes to some extent, thereby adding some parameter variation at the data level to bottom-up market microstructure (though the bottom-up structure should still remain primary).
Trying to understand the “cause,” or “why,” is no longer that important. Attributing price movements is something I wouldn’t recommend, as someone who has tried it—unless it is part of your actual job. Of course, if you do it very well, there may be a way forward; I just haven’t managed to make it work or find one myself.
The direction of volatility keeps changing; the only constant is volatility itself—and the latter is increasingly becoming the true fundamental.
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I. Macro Trading Positioning
US10Y(Weekly and daily charts, as of 261025)
Three weeks ago, US10Y formed a Failed Breakout at the weekly level against the 2007 annual high (FBO, failed breakout). After confirmation two weeks ago, last week it officially triggered the Ariston Top top-prediction signal (red arrow in the chart) and entered the daily downtrend channel of the Ariston Channel, shifting to a short position.
This week, the decline continued to widen, and cross-asset correlations reversed. Understand from the price action that price will tell you when it is about to move, and also take the price action as a way to understand what we discussed this week about“correlations should be subordinate to structure itself”.
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At the weekly level, the structure remains in an uptrend channel and long, and this uptrend channel will most likely not be invalidated until the narrative of a global capital expenditure supercycle is rejected by the market; in other words, a confirmed downtrend would mean that the global scramble for capital triggered by AI is being priced as having come to an end.This pricing requires monitoring not only U.S. Treasuries, but also the performance of multiple key long-term bonds in global markets for cross-validation.
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Global capital expenditure alongside US10Y (weekly and daily charts, as of 261025)
US10Y alongside FR10Y and BRN (as of 261025)
“FR yields are in an uptrend channel, while US yields have already entered a downtrend channel. So the former continues to rise in tandem with oil, while the latter falls in tandem—but the temporal validity of cross-asset relationships, and the widening of volatility, remain unchanged.”
Read alongside“On the fundamentals of macro hedging: Correlations should be subordinate to structure itself—why are oil prices rising while Treasury yields, gold, and U.S. stocks are all falling?”
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TLT (daily chart, as of 261025)
Macro theme trades: unusual moves (as of 261025)
TLT, turned long and then reached T1;T1 closed out part of the position; the Stop on the remaining position was moved from SL to PT. See the chart for the detailed structure. T3 was essentially the highest level we could have expected within the scope of this move.
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Financial Conditions & Precious Composite & Tech Composite & Crypto Composite (as of 261025): real financial conditions (market pricing) combined with precious metals, technology, and alternative-asset composites
A bottom in the real financial conditions index This has provided a relatively favorable financial-conditions backdrop for precious metals and global equities. At least from a liquidity perspective, the risk of a severe market crash has declined (this is the core reason the S&P equal-weight index remains relatively intact). However, Its negative reading means that a substantial liquidity-driven rally is also not something we can expect.
Key interest-rate data: Top Movers (as of 261025)
Key interest-rate data: Top Movers (as of 261025), continued
II. Technology trade positioning
KOSPI(Daily and hourly charts, as of 261025)
“Complicated? Not really. The KOSPI has remained precisely below the white horizontal line for nearly two months since we drew it. (I never draw lines casually: some people's lines are worthless, while others' lines are worth a lot.) During this period, reacting indiscriminately to various indicators, news, and intraday fluctuations would have done little beyond deepening account drawdowns; a good outcome was highly unlikely.Learn to act at key moments. The hard part is not making unnecessary moves. Listening to this person and that person, looking around in every direction, and constantly changing your position will get you nothing but losses. There is no need to watch before the horizontal line is broken. Below the gold line is the bearish zone.”
KOSPI produced an Ariston Bottom prediction signal, and the Stop on the short position PT was moved to the high of the bottom-prediction bar. Meanwhile, the hourly structure precisely reached T3 during the week, Reaching PT in the hourly structure will signal the end of this smooth decline.
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The KOSPI's two rounds of short trades Review them yourself.
Two rounds of shorting Korea (daily chart, as of 261025)
SOXS(Daily chart, as of 261025)
“The market has been discussing AI extensively for a long time. In our weekly notes, we have also discussed the various possible scenarios and concerns over and over. When there is nothing left to say, that in itself is a problem. One sign that something is fully priced in is a narrowing trading range, After the range narrows, a breakout point generally emerges to set the direction. Then funds begin piling in all at once, bringing about the next expansion in the range.。
At this stage, the most important thing is to make every effort to stay in the market at a relatively low cost (ideally at zero cost or with a small profit) and remain flexible, positioned on the side of the latest long or short setup. That way, when a trend begins, we can have the largest possible cushion of safety. (The first bar of an expansion in volatility cannot be predicted and is often the biggest contributor to the move, strongly determining whether psychologically you can hold on through what follows.) We can then sit back in comfort in first class on the next flight.”
U.S. semiconductor stocks, SOXX have fallen ~20% since we turned bearish; understand this in the context of reality“Continuously putting yourself in the best position within the optimal structure, at lower cost”My system is a practical one, a system concerned with the here and now. What is called a move unfolding is rearview-mirror logic (that is, what most books or things on the market tell you). The key point is that using a rearview-mirror perspective means it is never possible to excel at placing bets in the here and now This is the fundamental reason most people are bad at trading: your foundation is wrong, fundamentally unsound.
See the chart for the latest structural update.
SOXX(Daily chart, as of 261025)
DRAM(Daily chart, as of 261025)
DRAM, the structure is consistent. After taking partial profits near the T1 target, it, like SOXX, has stalled and consolidated here, with virtually no particularly sharp second move during the week.For both, the confirmation level for ending the short trade has moved to Wednesday’s trading high—the structural level confirmed by the strongest short-covering force since the sell-off began. A breakout would mean the bulls return to the market to try again because, after all, a genuine top structure has not yet formed—the price action in both cases has only narrowed into a top-range structure, so the bulls still have the urge to fight back.
Another possibility is that if the T1 consolidation ends and the path is further downside, the price will most likely reach the T2 level.You should have a clear sense of both paths in your mind, so you won’t be caught off guard by the “unexpected.”
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Meta said on its earnings call that financing is becoming harder because too many players are competing for capital: Anthropic is preparing IPO, OpenAI may also go public, and companies are all issuing large amounts of debt.This is another constraint on the current AI story: financing.When free cash flow is largely exhausted, some companies may raise equity, but the bond market will inevitably become increasingly skeptical, and if raising funds becomes more difficult, the pace of the core “spending” may also slow as a result.
The U.S. credit market is showing a “three-speed” pattern. The first category is the AI ecosystem: as financing deals continue to come to market, periods of widening spreads and pressure to absorb supply keep recurring, and attention has recently turned again to the cost of capital. The second category is other corporate credit, which is broadly quite resilient; the diversification value of non-AI sectors such as healthcare, energy, and food and beverages is increasingly appreciated, while economic growth is also sufficient to support credit fundamentals. As a result, although spreads have widened, they are still not wide by historical standards. The third category is the “left tail”: companies whose capital structures were already problematic before the rise in rates and bond sell-off from late 6 through a few weeks ago.
The companies that account for most AI capital expenditure and need corresponding financing are often highly rated and have very low leverage, so the hurdle for higher financing costs alone to make them stop investing is very high.But this does not apply to every company: some more highly leveraged issuers are clearly sensitive to changes in costs. Across the financing flywheel between public liquid markets and private markets, access to capital remains the more important constraint.
TECH MONITOR bottom-up names’ 5D performance (as of 261025)
The global technology core has shifted from indiscriminate selling to differentiated trading, while declines have slowed across most names and reached their respective T1 and T2 short target levels(See “ARI’s WEEKLY CHARTBOOK(TECH),” including microstructure updates for the names covered across all TECH MONITOR),This is likewise a potential sign of a renewed search for direction. After volatility expands, a pause is natural, followed by another expansion after the pause—either up or down. This is a key period to watch closely to see which direction the move will continue to unfold in; use the Chartbook well to make decisions about entries and exits with a clear basis.
Example AEHR (daily chart, as of 261025)
Whether you take a bottom-up or top-down approach, or whether you trade technology at all, is actually immaterial, because the structures in the Chartbook are universal in essence. This is the core of the Fractal Market hypothesis, Be sure to read this together with the accompanying material!!
STAR 50 (daily chart, as of 261025)
TECH MONITOR CN BASKETS (daily chart, as of 261025)
STAR 50: likewise, bearish is bearish and bullish is bullish. Since turning bearish, it has fallen by around 20%. The confirmation price for a bullish counterattack is also above Wednesday’s high (Mainland China’s tech trading looks different from that in the U.S. and South Korea, but structurally it is actually very much the same), where a breakout would set up the possibility of a rebound. If a breakout succeeds, I’ll share updates on the specific structure with everyone in the post in a timely manner.
The issue is that it remains in the Ariston Channel downtrend. It is really all the same: whether KOSPI, SOXX, or STAR 50, technology markets in China, the U.S., and South Korea are all in downtrends, which means that another right-side move by tech bulls is, at least for now, indeed difficult to see—a rebound, not a reversal.
“Rather than making a lot of money all at once in certain places, controlling drawdowns should be the market participant’s most important pursuit. A strategy that can make a lot of money all at once can also lose a lot of money all at once; gains and losses always come from the same source. Focusing on the former makes it difficult to be both long and good (good, and good for the long haul), whereas focusing on the latter can, because the latter (controlling drawdowns) is oriented toward compounding. The key to compounding is cutting losses short—protecting principal as much as possible to control downside risk and letting profits run. For more on this, see Paul Tudor Jones’s interviews. He is covered in a book recommended a couple of weeks ago, or you should be able to find some of his earlier material on YouTube. It is very valuable.”
After a broad decline of 15%–30%, the mainland China tech basket has shown some divergence toward a bullish structure during this week, so keep an eye on it.
Three. Global Equity Positioning
ACWI (daily chart, as of 261025)
Global equity trading shifts in response to the thesis (Economic) (as of 261025)
Global equity trading shifts in response to the thesis (Structure) (as of 261025)
“ACWI is in a downtrend within a double-rectangle consolidation at the top (see the purple box in the chart on the left). At the same time, attempts to make higher highs within the downtrend have been blocked by the Ariston Top top forecast. This is not a pretty structural setup, and the best outcome for equity bulls is actually not a rebound within the small rectangle (given the narrow range, there is little opportunity for positions to change hands sufficiently), but for the price to find support at the lower boundary of the large rectangle before looking for a setup—in other words, around the late-July low.”
It is currently finding support in the small rectangle.
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NIFTY(Daily chart, as of 261025)
NKD1!(Daily chart, as of 261025)
NIFTY: The first attempt to go long failed, and the position was stopped out. To turn bullish again, the price needs to break above the closing price on the sell-off day (Wednesday).
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“NKD: After our attempt to turn bearish, it has now seen an expansion in its trading range and fallen into the Ariston Channel downtrend. This premature short-selling should not be emulated. It is better for you to wait for confirmation before acting, to avoid following in Livermore’s footsteps. I can act early because I strictly control position risk, although this is indeed not a good habit in itself.”
As the downtrend structure continues to be confirmed and weekly losses widen, approaching T1, we will take profits on some positions when T1 is reached, PT Likewise Place it at Wednesday’s high—Understand “likewise” here in the context of the full text, and understand what I mean by a cross-asset relative-value matrix. Under the same structure, the patterns are highly similar. You can’t make sense of this by looking at just one market; only by looking at them together can you clearly see whether they do or do not corroborate one another.
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HSTECH (daily chart, as of 261025)
EWZ(Daily chart, as of 261025)
“HSTECH issued an Ariston Bottom signal on 10.09, but the price has yet to confirm it. To go long, the price needs to break above the bearish PT level.Don’t rush to jump the gun. If a move really happens, it won’t be possible to miss it. There’s no need.”
Don’t jump the gun! Don’t jump the gun!The Hang Seng Tech Index showed a bottom forecast and momentum divergence two weeks ago, but its structure has remained bearish. This, too, is an anomaly; see Livermore’s discussion in How to Trade in Stocks of “situations in which, after certain things happen, the market does not develop as expected”—You have to respect the price itself, Most losses that should have been avoidable come from jumping the gun...
After stalling when the divergence appeared, the price remained in bearish territory, indicating the weak position of bullish capital in the market. This week’s losses widened further and, as expected, reached our previously anticipated T1 target price; the bearish PT Likewise, move it above Wednesday’s trading high—Wednesday’s trading level is a key level for a great many assets worldwide. If you look at just one market, you can’t spot this consistency, nor can you use cross-market comparisons to confirm future price action.
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EWZ, a post-event-trading cooldown period. Structural changes will be relatively frequent during this time. If you want to avoid these frequent reversals, watch the purple rectangle here: a break above points up, while a break below points down. Also, in these circumstances, it is recommended that those who wish to remain involved choose relatively liquid proxies to place their bets, avoiding being unable to exit flexibly when gap risk emerges.Use some more liquid proxies to place the bets, avoiding being unable to exit flexibly when gap risk arises.
Core regions: red = short, green = long, gray = mixed; gold-edged scatter points moving toward the upper right (as of 261025)
Four. U.S. equity market positioning
SPX(Daily chart, as of 261025)
IWM(Daily chart, as of 261025)
“However, the week’s ‘new high’ came with a divergence in momentum. What is clear is that this is not a healthy top ... An unhealthy top is reflected not only in the internal structure of SPX, but also in the fact that, as new highs were made, IWM broke below the previously drawn uptrend line during the week, opening a short position at the break; as noted in the previous weekly publication, A break below would mean that the economic growth narrative is beginning to show cracks at the micro level. A further break below the previously forecast Ariston Bottom level would then confirm the recession narrative，A break below that level means the economic growth narrative is beginning to show micro-level cracks. If it falls further below the previously forecast bottom level of Ariston Bottom, that would confirm the recession narrative.。”
SPX broke below the rising white line, Manage long positions carefully while holding a short position in the index.
Meanwhile, small caps, a key proxy for recession risk, have fallen below the white line and continue to slide. Momentum is currently at an inflection point, and if it turns negative, this will become a key confirmation of the market's pricing of economic growth and credit risk.。
Chart:《ARI's WEEKLY WRAP 260920》
MEME(Daily chart, as of 261025)
MAGS(Daily chart, as of 261025)
MEME, the decline continues to widen; move the take-profit level lower.
“The take-profit was triggered; close the position and reverse as planned. The lower edge of the channel is above 8.2; a break below it here would sharply increase downside risk.”
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MAGS, the decline continues to widen; move the take-profit level lower. This is a fairly good example of divergence; review it yourself.
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XLU(Daily chart, as of 261025)
“Actually, XLU is also, to some extent, an instrument for betting on yields peaking (it should be used from a long-short or pair-trading perspective),but many people are unaware of this.”
XLU, after the weekly take-profit level was swept, the price rallied again, so I re-entered, with a tight stop placed below the previous day's low ahead of the breakout.
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U.S. session theme: red = short, green = long, gray = mixed; gold-edged dots moving toward the upper right (as of 261025)
U.S. session style: red = short, green = long, gray = mixed; gold-edged dots moving toward the upper right (as of 261025)
The rotation relay is reflected in the indices by equal-weighted indices outperforming.
SPXEW/SPX YTD (daily chart, as of 261025)
Select some instruments with stronger momentum (YTD, as of 261025)
Five. FX trading positioning
USDKRW(Daily chart, as of 261025)
USDKRW, short-long-short: understand the essence of swing trading;Since turning short again, it has made a new low; continue nudging the take-profit level lower.
USDMXN, continuing to make new highs.Understand that price can work out a perfect move on its own. I draw my lines only at the most critical moments and in the most critical places. The structure is unchanged.
“As with USDKRW (see the various publications from the past 2 months): if you think you can make money simply by drawing a line, that is naive. Charts themselves can give you nothing. Truly outstanding moves that can unfold fully, and price action that allows you to enter and exit with a clear rationale, must be validated by all three systems: fundamentals, price action, and cross-asset relative pricing and capital flows.”
Chart:“ARI’s WEEKLY WRAP 260927》
USDCAD (daily chart, as of 261025)
USDCAD has entered a downtrend channel. This is also a good price move following a divergence, and can be viewed together with MAGS; review it for yourself.
“Three things made the price action look unattractive here: 1/ The Ariston Top top forecast was triggered; 2/ The T1 target price was reached; 3/ Price made a new high, but momentum did not confirm it, creating a divergence. I don’t like unattractive setups, so I closed most of my position here and let the stop close the rest.”
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USDBRL(Daily chart, as of 261025)
AUDNZD(Daily chart, as of 261025)
USDBRL, the take-profit level here was determined using the purple rectangle from the previous smaller-scale chart. It spans a relatively long time frame. I’m also using this example to correct a misconception many people have:The setup I refer to is not necessarily the “newest” one, but rather the one with the strongest structural significance relative to the others.At any given point, there may be more than a dozen price structures present simultaneously. Experience and skill are not about knowing what each of these setups and patterns is, but about being able to choose, at the right time, the truly important one—the one to bet on for the best risk-reward.
If all you look at are the latest 3 bars and 5 bars, you’ll miss a lot, and you’ll end up with many repeated stop-outs (failures).：
“The first round of elections on 10 month 4 day, a possible second round on 10 month 25 day, and the fiscal policy that follows are key drivers of the exchange rate. In the years 2014 and 2022, the real fell USDBRL after the first round, but the move was fully reversed before the second round; in 2018, the real reached its strongest level on the Friday before the second round. So the first round can cause substantial exchange-rate volatility, but it may not last; markets will shift their focus quickly, and we too need to be ready to pivot at any time, positioning ourselves alongside the winner.”
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AUDNZD, the divergence signal has been confirmed. The daily chart has now fallen into a downtrend channel.
EURCHF(Daily chart, as of 261025)
USDTWD(Daily chart, as of 261025)
EURCHF, I didn’t take this trade; I explained the specific reason last week. During Friday’s trading, this instrument produced an Ariston Bottom forecast signal. If you’re holding a short position, you could consider closing part of it here.
“1/ An Ariston Top forecast was issued; 2/ Price then entered a downtrend channel; 3/ The second leg made a new high within the downtrend channel, was precisely rejected by the upper boundary, and showed a divergence between price and momentum. The divergence was followed by a large-bodied decline; now we’re waiting for follow-through displacement.”
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USDTWD produced an Ariston Top forecast signal, Watch for a potential momentum divergence structure here, If there is follow-through next week, I may consider going short.。
Major FX markets: red indicates short, green indicates long, and gray indicates no consensus; gold-edged dots are moving up and to the right (as of 261025)
Select some instruments with stronger momentum (YTD, as of 261025)
Six. Mainland China Trade Positioning
CN Baskets 5D% (as of 261025)
Huangjiu Baskets (daily chart, as of 261025): after turning from long to short, it plunged sharply.
Interested readers can subscribe during the Asian session (https://t.zsxq.com/NIGzs）找到完整内地篮子的交易结构细节，自上而下的内地200+个篮子的交易监控全量更新在“ARI’S WEEKLY CHARTBOOK (CN)” column.Use this guide to develop your own disciplined approach to entries and exits, and position yourself with the trend rather than against it.
The index structure update is retained here.
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Shanghai-Shenzhen 300 inverse (daily chart, as of 261025)
Shanghai-Shenzhen 300 inverse triggered an Ariston Channel top forecast signal on Friday.
Shanghai Composite Index (daily chart, as of 261025)
Shenzhen Component Index (daily chart, as of 261025)
Both the Shanghai and Shenzhen markets are in a bearish structure within a downward channel. It is worth noting that the Shanghai Composite Index has fallen by approximately 30% since entering the downward channel, and triggered an Ariston Bottom forecast signal during trading on Friday; the key question here is whether a rebound pattern will emerge. For a rebound, the price needs to break above the Wednesday trading high.
Wednesday is a very important day.
“My portfolio is cross-market. That means I trade wherever there are worthwhile opportunities, and if there aren't, I don't even look (there's no point in putting in the effort).I absolutely will not do the wrong thing in the wrong place at the wrong time. I don't go against the trend or try to stop a moving train.When the index is in a downward channel, I won't post much, and you shouldn't keep making moves either (there's no point; you're more likely to lose more the harder you try;most retail investors tend to trade frequently in a downward channel after a rise, until they're exhausted from trading and have lost nearly everything, with no energy left. Then, when the market finally enters an upward channel, they become numb and fail—or are unable—to act. They only act again after others have ridden another rally, and then they trade recklessly when the market falls, when they shouldn't be acting. And so on...），We dance when the market dances, and rest when the market rests. I always tell my traders that the best analogy is jet lag: if you do things in reverse, you'll always be out of sync, and that's what makes it uncomfortable.Learn to act at the right time and sleep at the right time, and you'll feel much better. Someone in Beijing following New York time will inevitably feel worse than someone in Beijing following Beijing time. You need to adjust your body clock to match the market.”
CSI 2000 (daily chart, as of 261025)
CSI 500 (daily chart, as of 261025)
Like the Shenzhen Component Index, CSI 1000 showed an Ariston Bottom forecast signal during Friday's trading. At the same time, abnormal behavior was detected, so this may be a bottom; use your own judgment.
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Like the Shenzhen Component Index, CSI 500 showed an Ariston Bottom forecast signal during Friday's trading. Bulls confirm the price at Wednesday's high.
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However, note that all the indices remain in downward channels, which means a move to the right is currently hard to expect; until they enter an upward channel and confirm one another, this is a rebound, not a reversal.
Red indicates unanimous bearish positioning, green unanimous bullish positioning, and gray disagreement; gold-edged dots are moving toward the upper right (as of 261025)
Select some instruments with stronger momentum (YTD, as of 261025)
Broadly red; compared with last week, some have turned gray.Many times, what you think is a bottom-up problem is basically a top-down one.Frequent trading in a poor backdrop, with low win rates and low odds, is a natural and inevitable outcome—largely unrelated to exactly what you buy or which strategy you use. It makes no difference whether the holding is called A or B, because in essence they all share the same risk exposure.
Have a clear basis for both entering and exiting: rest when it’s time to rest, and act when it’s time to act.
Seven. Positioning in metal trading
CMX Gold (daily chart, as of 261025)
Mainland China gold basket (daily chart, as of 261025)
Pair trade closed; uniformly bearish——Gold officially broke below the previous white uptrend line during the week, and abnormal capital activity was detected on the confirmation bar; to turn long again, price must reclaim the high of the breakdown/abnormal-activity monitoring bar.
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Mainland China’s gold basket is likewise in a downtrend channel, with a short-position structure.Often, the basket’s movement in the stock market is smoother and clearer than that of the commodity itself. It has fallen ~25% since turning bearish.
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CMX Silver (daily chart, as of 261025)
Silver/gold ratio (daily chart, as of 261025)
“As discussed last week, silver remains relatively weaker than gold. Therefore, while gold’s structure has shifted to favor the bulls, silver remains in bearish territory...The silver/gold ratio, a risk-appetite indicator for precious metals, remains under pressure and ended trading this week hovering near the bottom of its range. This is the core reason silver is structurally weaker than gold. And without silver’s confirmation and sentiment support, gold’s move will also struggle to truly get going.To some extent, you could also say gold’s bullish structure is supported by liquidity (see the weekly macro trading positioning section), which is also why gold is relatively stronger than silver (given its monetary properties)。”
Since we shorted, silver has fallen more than ~20% and continues to move within the descending channel as expected.Once the market turns bearish within a descending channel, this is naturally how it develops.Meanwhile, the silver/gold ratio also continued to weaken as expected, alongside falling precious-metal prices—as discussed earlier, without confirmation and sentiment support from silver, gold is unlikely to sustain a trend.Focus on price structure, but also on cross-asset confirmation. This is key to macro trading.
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NMX Platinum (daily chart, as of 261025)
NMX Palladium (daily chart, as of 261025)
Unchanged.
CMX Copper (daily chart, as of 261025)
COPX Copper miners (daily chart, as of 261025)
Copper: price continues to rise, while momentum continues to weaken. The top signal our system issued in 26.09.22 still marks the highest point of this rally so far.We are still holding a short position.
A friend pointed out that, because this copper top signal is being traded through the corresponding ETF to make a 9.22, the structure of the miners proxy is still needed. So here is a brief update—note that the T1 target price for COPX has now been reached; those holding short positions may consider taking some profits here.
Eight. Alternative asset trading positioning
Following regulatory guidance, this section may need to be suspended for a while. The structure has not changed, The PT in the pair trade hit its intraday low on Wednesday so keep an eye on it.
Note: Please comply with the laws and regulations in your jurisdiction and allocate personal assets only within the scope of applicable rules; this content is intended only for users in certain overseas regions.
Nine. Soft commodities
Agriculture Basket (daily chart, as of 261025)
Cocoa (daily chart, as of 261025)
The Agriculture Basket has turned bearish, and momentum has returned to a marked state. The second leg was rejected; the high from the first long trade (see the red arrow on the chart) remains the highest price so far. Given that it is still in an uptrend channel, we will continue to hold if it returns to a bullish structure before a decisive break lower, although the previous high is probably difficult to surpass.
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Cocoa: the second bullish reversal is still being held, This renewed bullish position may exit at a loss.
“After the previous round of long and short positions, the planned price was triggered and a second bullish position was entered. The stop is placed at the low of the trading day on which unusual activity was detected (the entry point of the new capital; failure to hold here would mean the new major players lack strength).”
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Coffee (daily chart, as of 261025)
Soybeans (daily chart, as of 261025)
Coffee: On Friday, we took profits on the long position and turned short; the tight stop is placed at the range high of this stalled bullish attempt.
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Soybeans: still holding a short position.
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Raw sugar (daily chart, as of 261025)
Corn (daily chart, as of 261025)
Sugar: took profits on the long position and switched to short.Momentum is approaching a crossover, which could bring a potential expansion in volatility. Given the fading upside momentum, the expansion is more likely to be to the downside—place a tight stop-loss above Wednesday’s trading high.
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Corn: the decline has extended further. Continue holding short, and move the take-profit level to Thursday’s trading low.It has now returned to the 0.618 level; if the decline cannot narrow, that will point to T1.
“After entering the Ariston Channel downtrend, the decline has continued to accelerate sharply. It has now given back 50%+ of the gains since the low...
The decline was mainly due to the US supply figure released by USDA coming in above expectations, with a surprisingly high yield figure (US corn yield was raised by 2.7 bushels per acre from 9 month, the largest 9-to-10 month yield increase since 2005. Nebraska’s yield alone was raised by 11 bushels per acre, lifting the national yield by 1.2 bushels per acre and adding 1.06 hundred million bushels to production.), higher beginning stocks, and a larger harvest—a narrative clearly not what the bulls were hoping for. This is also an example of news following price: many people may already have known it when the market turned bearish at the top and price shifted from an uptrend into the Ariston downtrend. Price determines the news, not the other way around...”
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Wheat (daily chart, as of 261025)
Wheat: the decline has continued to extend. Move the take-profit level down to the high of the latest anomaly-monitoring Bar—Yes, a friend noticed this and sent me a private message asking about it, so I’ll answer here for everyone:I do use anomaly-monitoring bars to set stop-losses, take-profits, and key levels for switching between long and short. These are difficult to identify from price action alone.。
The reason this works is that monitoring anomalies reveals traces of the actions of funds with pricing power (the market makers). Their moves provide an anchor and have strong practical significance for determining the relative strength of bulls and bears.
“Corn and wheat are both trades that were re-entered after being forced to close mid-trade due to the structure. This is very important.
A common problem for most traders early on is that after being stopped out of a position in a particular direction, they often become afraid to re-enter.—but this is absolutely necessary, because Structure is objective. Your position, your profits and losses—all of that has nothing to do with the market. What you need to avoid is letting fear of failure stop you from taking the position you should be in at a particular point in time.。
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Sold too soon? Just buy back in. In fact, there is no such thing as selling too soon. As long as your decision really was based on sound reasons for entering and exiting, you only need to do four things:
Execute decisively.”
LE (daily chart, as of 261025)
09.03 detected unusual activity, followed by the second wave of fund groups entering and breaking out of the previous narrow consolidation range. The rise has continued this week, so move the take-profit level further up to the low of the range formed on the smaller time frame during the week.
Like corn and wheat, this was also a re-entry trade after an early exit at a loss, Keep understanding that “you don’t need to fear re-entering”Putting yourself in the right position is more important than anything else.
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Eggs (weighted) (daily chart, as of 261025)
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For more mainland China instruments, see “ARI'S WEEKLY CHARTBOOK (COMMODITY)”; they are not repeated here. Be sure to use them together!
Ten. Oil and natural gas
BRN(Daily chart, as of 261025)
HO (daily chart, as of 261025)
Brent’s gains continued to widen this week, just as last week’s weekly report said they would.Many people tend to think that the approach of the midterm elections will reduce geopolitical risk—because Trump will start getting down to business, putting everyone at ease and bringing oil prices down—but the reality is exactly the opposite.This should be familiar to anyone with a background in futures trading. The simplest way to put it is:If you want to force someone into a short squeeze, you can only do it when they’re already in trouble—finish them off when they’re down. The more critical the moment, the harder you have to strike.Things can only get more tense.
Move the take-profit point to the low of the follow-through Bar (A new reader asked what a follow-through Bar is.It means just what it says. Take BRN, for example: Monday, Tuesday, and Wednesday this week were consolidation Bars. You can see lots of small bodies during the period you’re betting on. On charts one or two time frames below that betting period, these are actually very clear ranges.When you see small bodies, you should recognize the range-bound contest behind them. A range-bound contest means volatility is contracting. We watch to see which way volatility expands after contracting; if it expands in the same direction as the structure, that’s follow-through...）
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HO, let me repeat what last week’s weekly report said—“It has begun to decouple from the BRN trend. Setting fundamentals aside, the price action is fairly straightforward: it has already entered a downward channel, below the white line, with poor odds. Bulls should use tight stops and respond flexibly to a downward reversal.”... If that passage didn’t mean much to you when you read it last week, it should make sense this week (after reading“On the fundamentals of macro hedging: Correlations should be subordinate to structure itself—why are oil prices rising while Treasury yields, gold, and U.S. stocks are all falling?”), or rather, If you had properly digested that passage last week, you wouldn’t be asking, “Why has the linkage changed?”Everything is interconnected.
I had planned to devote more effort to continuing to update that introductory textbook on basic and advanced technical analysis (with the hope of having my name remembered in the history of technical analysis). But now I’m not so sure, because A textbook simply can’t teach you the kind of lessons that involve real money and real action. That’s why I’ve tried another approach: bringing everything I know together with what is happening in the real world right now, and writing about it in the weekly report. By reading it, looking at chart after chart and passage after passage, and seeing each setup and structure, you’ll gradually develop a richer perspective on this world of buying, selling, and prices.The things that seep into your mind this way will teach you more than my trying to force-feed you ever could. That’s how my teachers taught me when I studied with them.Inspiration, not indoctrination; practice, not dogma. Things that develop can only be learned through development. New ideas can’t come from old hands who refuse to move on.
NG (daily chart, as of 261025)
NG, let’s use it to discuss the importance of “admitting you’re wrong in time”: the top forecast for Ariston Top was ultimately confirmed. After the price fell through our planned long-position stop-loss (and reversal to short) level on Monday, a huge sell-off began, with volatility expanding.
Every action needs to be planned before it is taken, including which levels will tell us we are wrong and which levels are potential target prices we expect the market to reach. Finally, a well-made plan must be followed strictly.
Without a planned stop, and without following it strictly, I would lose a lot of money on NG. But unfortunately, there are no “what ifs”—so, Mr. Market can only slink away (unable to truly harm us)...
*Pay attention to the PT level; a sharp reversal with major volatility could happen here again.
Medals are for the dead.
I appreciate everyone’s kind words, but I’m not important, and I have no intention of becoming famous. I prefer to keep my head down and work quietly; the Planet is for our internal community, and we try not to share its content externally. My thanks to everyone here. Thank you, friends.
The US market, A Port, and Commodities Planets are used together, Only decide if there’s really a need, I know everyone is supportive, but don’t waste money or spend recklessly.
US market:https://www.meridianresearch.app/home?product=us-strategies
A Port:https://www.meridianresearch.app/home?product=asia-strategies
Commodities: https://www.meridianresearch.app/home?product=commodity-strategies
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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.
