• ...a lackluster, directionless market...
• ...not wanting to miss the tail end of the move toward 8,000, but also unwilling to bear an unhedged, crowded pullback...
• ...every strategy only works in a particular environment...
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I. Precious metals: gold and silver
Gold successfully confirmed a short-term low after news of peace emerged, but as funds in the interest-rate-sensitive segment withdrew, it turned down again at our bull-bear line. Note that until it gets above the line, it remains in bearish territory. This is the core principle of the bull-bear line: we follow whoever is in control.
Figure: The two earlier calls (a deepening decline and confirmation of a short-term low), and the attempted advance precisely rejected by the bull-bear line
CMX gold (daily chart, as of 260621): the rebound after the low was confirmed was precisely turned back at the bull-bear line
As of now, the bull-bear line remains above 4388 and should not be moved.
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The failed breakout came alongside a shift in monetary policy expectations: expectations of tighter policy, a stronger dollar, outflows of ETF funds from interest-rate allocations, and potential balance-sheet reduction pressure—all weigh on this segment.Last week's weekly newsletter discussed this in depth. At this point, the probability of a rate cut this year has fallen to zero, and expectations need to be pushed back to the middle of next year. In fact, the Fed's actions themselves have limited impact;Warshknows he is not the main character, so he can simply play the supporting role well and does not need to say too much. His sole task is to represent the central banks of developed countries well and allay market concerns about the independence of the DM central bank.
The task determines the actions: over these two years, everything will revolve around those three words, independence. The character needs to be firmly established right at the outset for it to work.
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Looking at historical policy regimes, gold benefits most when Fed easing coincides with an inflationary environment; a shift to rate hikes in an inflationary environment cuts gold's potential upside in half.
Figure: The two earlier calls (a deepening decline and confirmation of a short-term low), and the attempted advance precisely rejected by the bull-bear line
A historical comparison
As shown above, when CPI is above 2% and the Fed is easing, gold has risen an average of 13.2% year over year since 1990, and 21.8% since 2001. When CPI is above 2% but the Fed is tightening, it has risen 6.5% since 1990 and 10.8% since 2001. This framework shows that, shifting from inflationary cuts to rate hikes, with other conditions unchanged, reduces gold's upside by about 50%.
In short, the narratives supporting gold over the medium to long term have indeed not changed. That means the bull market will not come to a complete end. But for gold to resume a strong advance, the market needs to start pricing out rate hikes, or an unexpected event completely unrelated to the current situation needs to occur.
Figure: Gold enters its third decline since 22
CMX Gold (daily chart, as of 260621); the third down leg began in 26 year 6 month
This is the third time gold has entered a downside momentum environment since 2022. The first two times were from 22 year 5 month to 22 year 11 month, and from 23 year 8 month to 23 year 10 month. From this perspective, moving above our long/short line is where short-term bears formally close their positions. But a genuine resumption of the upswing and a new high will have to wait until momentum turns positive here. I’ll continue to follow this with everyone.
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As a high-frequency proxy for whether gold can resume its rise, gold ETF fell 1.6% in AUM month; investor fund flows have yet to recover.
Chart: ETF funds continue to flow out
Physically backed gold ETF continues to see outflows, while non-commercial investors remain on the sidelines
Many people say silver is weaker than gold, but that is not quite accurate. Specifically, silver is still in the countdown phase and has not actually begun to lose momentum. From this perspective, it is stronger than gold.
Chart: Silver has not entered a genuine downtrend yet; it is still in the “countdown (ticking)” phase
CMX silver: a reversal countdown (ticking) is appearing here, but a genuine reversal has not begun
The gold line, acting as a downtrend line, remains a strong influence. There are four layers of price resistance here: 1) the gold line acting as a downtrend line, 2) 200 dma, 3) 50 dma, 4) a key price level...
Bulls need to wait until all four of these levels have been broken at a minimum. Before that happens, the market will remain the “neither here nor there” kind of action discussed in last week’s weekly report...
“Neither here nor there” action means that you can be right in your assessment (as we were when we identified the short-term low), but buying before confirmation will only earn you a little, while chasing the price after confirmation will leave you caught at the top. It’s not worth it. Smart people only go after the big opportunities: at least three times the reward for the effort before they act.
Chart: Several previous downside breakdowns
The red and green triangles on the chart mark several historical top and bottom predictions; they are not a holy grail, and you can judge their effectiveness for yourselves
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II. Global equities, technology, and the U.S. stock market
Chart: Positioning of major markets from a global equities perspective
Red and green indicate the daily directional bias toward long or short positions; gray indicates disagreement among the systems (as of 260621). An explanation of the positioning chart:Explanation one、Explanation two
If you study market movements closely, you’ll find that global equities are working to broaden beyond a simple long position in technology. This reflects the outcome discussed in our weekly report: the equity basket cannot have its components taking turns going weak and leaving gaps.
Chart: S&P Index
SPX (daily chart, as of 260621)
SPX gapped up on Monday amid positive news, but was precisely turned back at our key price level; failure to get above it means remaining in bearish territory. With technology concentration elevated, more and more capital is trying to find new areas to make a play, while at the same time, Using look-back puts and index puts is more popular than reducing positions, because institutions generally do not want to miss the tail-end scenario of the S&P continuing to rise to 8,000, but are also unwilling to bear the risk of an unhedged, crowded pullback.
Chart: Divergence and new attempts in the US equity market
Red and green indicate the daily directional bias toward long or short positions; gray indicates disagreement among the systems (as of 260621). An explanation of the positioning chart:Explanation one、Explanation two
A batch of tech proxies remains held after triggering a re-long signal:
Chart: Update on a batch of tech proxies
SOXX (daily chart, as of 260621), stop moved to the red line
SK Hynix (daily chart, as of 260621), after breaking above last week's weekly orange-line planned re-long price, it rose another +20%; stop moved to the red line
INTC (daily chart, as of 260621), stop moved from above 107 last week to above 115, crossing the breakeven cost level, with floating profits continuing to expand
AMD (daily chart, as of 260621), broke above last week's weekly orange-line planned re-long price, and stop moved to the red line; this trade may end in a loss
Chart: Korean index turns long again
KOSPI (daily chart, as of 260621), broke above last week's weekly orange-line planned re-long price, and stop moved to the red line
Chart: Nikkei update
NKD (daily chart, as of 260621), after 6.11 broke above the previously set re-long price, stop is now moved to the red line
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Three. China market
Chart: China market turns long again
CSI 500 (daily chart, as of 260621),after breaking above the previously set re-long price, stop is now moved to the red line, crossing the breakeven cost level
At present, China Tech as a whole appears to have split into two trades:
1) offshore internet as the blood bag, and 2) onshore AI hardware as the bloodsucker...
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The Hang Seng Tech Index, the core proxy for the former, is mainly made up of internet platforms and is exposed to weak consumption, the drag from real estate, competition, and AI capex concerns; whereas the STAR Market 50, the core proxy for the latter, spans AI supply-chain winners such as CPO, PCB, memory semis, and related materials. This is a market that needs to—and must—be viewed in two separate parts; it is not a broad-based bull market.
Chart: The former, being drained of blood: Hang Seng Tech
HSTECH (daily chart, as of 260621)
Hang Seng Tech has been moving smoothly along this descending yellow line we drew earlier. After an earlier attempt to catch a low, Hang Seng Tech has not featured in our discussions since.
With new lows emerging, the gap between the blood bag and the bloodsucker is increasingly prompting many people to think about buying the dip. Buying the dip is fine, but wait until the market really tells you it has bottomed before acting; jumping in rashly would be an act of sheer willfulness.At least Wait until it stabilizes above the orange/gold line, or wait until its momentum goes from declining to printing a dot, then turns upward after the dot is complete, before acting. Planet will also report back to everyone at the earliest opportunity; I’ll be your alarm clock and time signal.
Image: The latter is siphoning blood, STAR Market 50
STAR Market 50 (daily chart, as of 260621)
STAR Market 50 has likewise returned to the re-entry long price; the stop is currently at the red line.
Image: Mutual confirmation between the Shanghai and Shenzhen markets
Shanghai Composite (daily chart, as of 260621)
The Shanghai Composite has moved back above the long/short line and the orange line. Although it is still printing a dot, it has already confirmed that the bearish state has failed, which is a good thing.
Shenzhen Component (daily chart, as of 260621)
The Shenzhen Component’s momentum is rising again; it will make a new high here.
As of now, the Shanghai and Shenzhen markets have mutually confirmed one another, and the tradable window in the mainland market has opened again.
Image: Momentum Environment (Mainland China)
It found support at the green line;Above the green line is our time to operate on home ground. The signal remains valid above the yellow-line zone; below the red line, the overall data table will be declared invalid.
Meanwhile,Momentum Environment(Mainland China)It found support at the green line, so everyone can continue to put the dataset to work.
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An aside here: following our discussion of Momentum Environment, let’s talk about the Holy Grail:
The logic behind monitoring leveraged funds was actually discussed on Planet when it was first launched. The reason it is provided in the form of a data table rather than as an indicator is that monitoring the funds’ full state requires many forms of off-market structural processing. Indicators that can run in any market-data software are all only truncated versions, including the one Planet displays on the chart, which is really just a visual display and cannot perform the core calculation process.
Image: About leveraged funds
Only by following funds with pricing power can we maximize our chances of being on the market’s winning side. The logic is actually very simple:
1) Their actions drive the market’s price discovery.
2) Their actions cannot be completed within 1 bars, so they naturally have persistence.
They are not a specific group; in fact, every instrument has a different “they”...
But neither of these two logics is a Holy Grail, because they inherently require the market to respect the logic itself. This is why we began synchronizing the Momentum Environment (Mainland China),Any strategy is effective only in a specific environment. Long or short is not what matters; what matters is whether it is “tradable.”
Above the green line is our home turf; above the yellow-line zone, the strategy remains effective; below the red line, the aggregate data will declare it invalid.
So make the most of your show time on home turf. At other times, just take a break when you need one. No one can make all the money there is to make; even the most powerful things can capture only a portion. That is how everything works, so there is no need to be too surprised: nothing can make money forever.
This is a bucket of cold water for everyone, but it is much needed. Whether it is my approach or your own, you must pay attention to when it is effective and when it is not, know your weaknesses and where your danger zones are; it is very important to play only when the odds are in your favor.
Figure: Positioning for thematic trades in the mainland market
Red and green indicate the daily directional bias toward long or short positions; gray indicates disagreement among the systems (as of 260621). An explanation of the positioning chart:Explanation one、Explanation two
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Four. Alternative assets
Figure: The low remains valid, but the bulls need to complete a breakout
The low-point forecast is still valid for now
The Planet's low-point forecast is still valid. If you read the chart bar by bar, you can see that after the low-point forecast appeared, the state of each candlestick gradually shifted from red (bearish) to blue (bearish momentum fading), then to green (bullish) (only one candle appeared before it was pushed back). The breakout failed, and it shifted from green to purple (bullish momentum fading)...
This is a process of dynamic equilibrium.
You should not continue to sell aggressively before the forecast low is broken, and you should not go long before the bull-bear line is broken to the upside.
If it moves higher, the price will stall near the orange line.
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Five, MLCC, tungsten hexafluoride...
Figure: MLCC basket (see26-04-25 “Regarding MCLL and price increases for other passive components”and earlier weekly update）
Basket proxy (daily chart, as of 260621) Since Notes was published, +150%; the take-profit stop has been moved from above 120 in last week's weekly update to above 148
Basket proxy (daily chart, as of 260621) Since Notes was published, +220%; the take-profit stop has been moved from above 14.1k in last week's weekly update to above 15.7k
Basket proxy (daily chart, as of 260621) Since Notes was published +160%, the take-profit stop has been moved from above 8.5k in last week's weekly note to above 10.8k
Basket proxy (daily chart, as of 260621) Since Notes was published +135%, the price fell below the stop midweek last week; after taking profits and exiting, a break above the orange line triggered a new long position. The new stop-loss level is shown by the red line.
Basket proxy (daily chart, as of 260621) Since Notes was published +165%, the price fell below the stop midweek last week; after taking profits and exiting, a break above the orange line triggered a new long position. The new stop-loss level is shown by the red line.
Chart: Tungsten hexafluoride basket (see26-04-04《Tungsten Hexafluoride》）
Basket proxy (daily chart, as of 260621) Since Notes was published +600%, the take-profit stop has been moved from above 230 last week to above 300
Basket proxy (daily chart, as of 260621) Since Notes was published +100%, the take-profit stop has been moved from above 45 last week to above 55
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Six. FX: Some updates
An update on some currency pairs we discussed earlier on the Planet.
Chart: Yen trade (seeYen and dollar: intervention and Coordinated Intervention）
USDJPY (daily chart, as of 260621)
At the beginning of May, we outlined two possible paths for USD/JPY. The market ultimately chose the upward path, breaking above 157, and has continued rising ever since.
The take-profit level for this long trade has now been moved to above 160. Note that 1) Historically, in the six months before the first rate-hiking cycle, USD/JPY rose by about 4.5% on average; 2)The Japanese authorities' intervention level seems close to the previous high 162. Once USD/JPY approaches around 162, it will likely trigger another round of intervention, so be sure to plan your profit-taking.
The fundamentals haven't changed, so I won't repeat them; you can refer to the earlier weekly notes. The scale of intervention here is constrained by declining foreign-exchange reserves. The decline caused by the previous 4-5-month operation was completely reversed in less than a month, and subsequent intervention is also unlikely to reverse the uptrend supported by dollar strength and Fed expectations.
Chart: Euro trade (see The euro trade is approaching resistance.）
EURUSD (daily chart, as of 260621)
After EUR/USD was sharply rejected at the resistance level of 1.18, it is now close to the bottom of the range, and the bounce has ended, with momentum turning negative. A break below the yellow line would trigger another leg down.
Chart: Some others...
USDCHF (daily chart, as of 260621) Keep an eye on the gold line yourself.
It's very kind of you all, but I'm not important and have no intention of becoming famous. I prefer to keep a low profile; the Planet is for our own internal content, which we try not to share outside.
Thank you all here. I'm grateful to all of you.
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