• ... The relationship between fundamentals and price movements is more like a reflexive one...
• ... Why the power of structure matters...
• ...I can trade ... because I know how to manage the risks...
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Note: By reading, subscribing to, browsing, forwarding, saving, or using the content of this planet in any way, you are deemed to have read and understood this disclaimer in full and to have agreed to it. If you do not agree, please stop using it immediately and leave. All content on this planet is solely for personal research, information organization, and learning and discussion. It does not constitute any investment advice, buy or sell recommendation, offer or solicitation, promise of returns, asset management service, or investment advisory service; nor does reading, subscribing, interacting, or using it create any legal relationship of client, principal-agent, trust, advisory, or other kind. The content does not take into account any recipient’s financial situation, investment objectives, risk tolerance, or suitability requirements. Recipients should verify the information themselves, make their own independent judgments and decisions, and bear the investment risks and consequences themselves. Information in the text may come from public sources, third-party data, market information, personal judgment, or model analysis, and may be delayed, incomplete, erroneous, biased, or no longer valid; the author does not guarantee its authenticity, accuracy, completeness, timeliness, or suitability. Past performance, historical cases, backtest results, or successful calls do not indicate future performance and do not guarantee returns. Without permission, you may not copy, screenshot, screen-record, forward, adapt, compile, or use the content for stock recommendations, fundraising, managing money on behalf of others, commercial promotion, or any similar purpose; all consequences arising from such conduct shall be borne by the persons responsible!
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I. A substantial part of the A-share market is still fundamentally driven
Huayou Cobalt (daily chart, as of 260805), overlaid with my fundamental framework (the first of the three systems; see25-11-25 “An Explanation of My Investment Framework and Trading Reflections (I): The Fundamental, Technical-Pattern, and Capital-Behavior Systems and Their Foundational Principles”）
Cambricon (daily chart, as of 260805), overlaid with my fundamental framework (the first of the three systems; see25-11-25 “An Explanation of My Investment Framework and Trading Reflections (I): The Fundamental, Technical-Pattern, and Capital-Behavior Systems and Their Foundational Principles”）
Yili Group (daily chart, as of 260805), overlaid with my fundamental framework (the first of the three systems; see25-11-25 “An Explanation of My Investment Framework and Trading Reflections (I): The Fundamental, Technical-Pattern, and Capital-Behavior Systems and Their Foundational Principles”）
Does fundamental trading exist in the A-share market? To some extent, yes. In fact, fundamentals provide a more stable pricing backdrop and anchor for daily price fluctuations. The chart overlays price and fundamentals.The differences in between mainly stem from index-level volatility, market sentiment, and the impact of certain macro events.
Sangfor Technologies (daily chart, as of 260805), overlaid with my fundamental framework (the first of the three systems; see25-11-25 “An Explanation of My Investment Framework and Trading Reflections (I): The Fundamental, Technical-Pattern, and Capital-Behavior Systems and Their Foundational Principles”）
YOFC (daily chart, as of 260805), overlaid with my fundamental framework (the first of the three systems; see25-11-25 “An Explanation of My Investment Framework and Trading Reflections (I): The Fundamental, Technical-Pattern, and Capital-Behavior Systems and Their Foundational Principles”）
Some longtime readers may remember how frequently we mentioned YOFC from the end of 24 through the middle of 25. There were indeed volume-and-price factors, but The more fundamental reason was that YOFC had first completed a fundamental recovery—from decline to recovery, and from recovery to strong performance. At the time, however, the price had not fully reflected this.
...
Xiaomi (daily chart, as of 260805), overlaid with my fundamental framework (the first of the three systems; see25-11-25 “An Explanation of My Investment Framework and Trading Reflections (I): The Fundamental, Technical-Pattern, and Capital-Behavior Systems and Their Foundational Principles”）
Besides changes in absolute fundamentals, the relative magnitude and pace of change also affect pricing behavior.The chart above overlays Xiaomi’s price trend with its fundamental results, and you’ll notice that The price reversal occurred when the company’s performance itself shifted from poor to improving, while the massive rally came as performance went from improving to strong. Within that strong-performance phase, as the pace of further marginal improvement weakened, the price began to top out, and during this phase it broke below its top ahead of the change in fundamentals.
At some times, prices react after the fact; at others, they actually lead. This is not to say that the market has insider trading or information spillovers—that has nothing to do with us, and we have no way of knowing. The point is simply that changes at the margin, sooner or later and faster or slower, will ultimately be priced in.
This is also why pure technical analysis can indeed work if you truly don’t understand fundamental analysis and aren’t able to analyze fundamentals: information gets incorporated into the prices you can see with the naked eye.
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The relationship between fundamentals and price movements is more like a reflexive one. You can read Soros’s thoughts on prices and on the different participants in the market who operate according to different underlying rationales.
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An example from U.S. stocks:NVDA、ORCL、META：
NVDA (daily chart, as of 260805), overlaid with my fundamentals framework (the first of the three systems; see25-11-25 “An Explanation of My Investment Framework and Trading Reflections (I): The Fundamental, Technical-Pattern, and Capital-Behavior Systems and Their Foundational Principles”）
NVDA’s advances almost always stopped where the fundamentals were beginning to weaken at the margin. So many people who claim to be value investors following fundamentals kept shouting “buy, buy” at those past highs, even after fundamentals had weakened, and you’ll find that they really don’t understand fundamentals.
The thing to fear most is not acting differently from others. Both technical traders and fundamental investors can make money, as long as they do their work well. What’s most frightening and least acceptable is deceiving yourself when, in essence, you’re just gambling.
ORCL (daily chart, as of 260805), overlaid with my fundamentals framework (the first of the three systems; see25-11-25 “An Explanation of My Investment Framework and Trading Reflections (I): The Fundamental, Technical-Pattern, and Capital-Behavior Systems and Their Foundational Principles”）
META (daily chart, as of 260805), overlaid with my fundamentals framework (the first of the three systems; see25-11-25 “An Explanation of My Investment Framework and Trading Reflections (I): The Fundamental, Technical-Pattern, and Capital-Behavior Systems and Their Foundational Principles”）
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Two. Learn the essence, not the form; don’t copy and paste my actions.
This is a warning post:
Likewise, here’s an example of a breakout from a range;I share what I’m looking at on the community platform not so that you can follow my trades. Following someone else’s trades is the last thing you should do (if that’s your purpose, please message me privately for a full refund and leave the community). You need to rely on yourself, not others. Focus on the reasoning behind the action (the essence), not the action itself (the form). First, settle in and watch what I do, and make sure you fully understand it,
A domestic Chinese small-metals distributor (daily chart, as of 260805)
Before the market opened on August fifth, I was watching small metals. Fundamentals had turned, but the setup was still in an ugly area. If you look closely at the chart, you can see that, as of the time I posted, the micro-level subject was still in the lagging area.
A domestic Chinese small-metals distributor (daily chart, as of 260805)
As of today:
A micro-level security (daily chart, as of 260807)
Why are fundamentals so important? All three systems are indispensable, and fundamentals are something you must get right yourself;
Another example:
A micro-level security (daily chart, as of 260803)
MINIMAX (daily chart, as of 260803)
This was a position I was still holding short when I posted,
but the decline had eased and flattened out, approaching a structural turning point.
Why is the power of structure so important?
Because...
...
MINIMAX (daily chart, as of 260807)
This is what happens when price breaks through a key level.
It broke out near the August 5 close and is up 40% since.
...
Finally,
I can trade in the Lagging and Weakening quadrants because I know how to manage the risks. If you do not have the skill set to do the same, stay out of those two quadrants. Do not blindly copy my trades.
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Three. A brief update on the mainland tech monitor (not a buy/sell or long/short recommendation; for reference only)
Also, the chart below shows the mainland market Tech Monitor as of yesterday (260806). Friends in the Hong Kong Dragon group have already seen it; this is mainly an additional update for those of you who have not subscribed to Hong Kong Dragon, for reference.
The core assets in Global Tech are continually updated in the cross-asset section, so I won’t repeat them here.
Tech Monitor 260806 (mainland version)
A long position in the constituent stocks 100% does not mean that basket as an asset itself is also held long. This is the difference between the mainland monitor and the global core assets monitor. The core assets are directly driven by micro-level factors; for compliance reasons, the mainland tech monitor can only show the vaguely derived result for basket as an asset.
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Chart: Clamp Breakout. You can only see this pattern here; it is a pattern of our own.
I’m grateful for everyone’s kindness, but I’m not important, nor do I intend to become famous. I prefer to keep a low profile; the content in our own private group is for internal use, and we try not to share it externally.
I’d like to thank you all here. Thank you, friends.
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(End of full text)
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Note: By reading, subscribing to, browsing, forwarding, saving, or using the content of this planet in any way, you are deemed to have read and understood this disclaimer in full and to have agreed to it. If you do not agree, please stop using it immediately and leave. All content on this planet is solely for personal research, information organization, and learning and discussion. It does not constitute any investment advice, buy or sell recommendation, offer or solicitation, promise of returns, asset management service, or investment advisory service; nor does reading, subscribing, interacting, or using it create any legal relationship of client, principal-agent, trust, advisory, or other kind. The content does not take into account any recipient’s financial situation, investment objectives, risk tolerance, or suitability requirements. Recipients should verify the information themselves, make their own independent judgments and decisions, and bear the investment risks and consequences themselves. Information in the text may come from public sources, third-party data, market information, personal judgment, or model analysis, and may be delayed, incomplete, erroneous, biased, or no longer valid; the author does not guarantee its authenticity, accuracy, completeness, timeliness, or suitability. Past performance, historical cases, backtest results, or successful calls do not indicate future performance and do not guarantee returns. Without permission, you may not copy, screenshot, screen-record, forward, adapt, compile, or use the content for stock recommendations, fundraising, managing money on behalf of others, commercial promotion, or any similar purpose; all consequences arising from such conduct shall be borne by the persons responsible!
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.
