The twenty-second day of the second month of the year two thousand twenty-six (260216-260222)
Author: Ariston. For details on how to add Ariston as a WeChat friend, see the pinned post in the Planet.
When adding, please include the name of the subscribed Planet and your nickname within the Planet as a note. Current Planet subscribers are eligible to also receive the base-account permissions for the 1 year VA investment research terminal; after adding contact us to activate VA and that will do.
For custom models, send a private message (currently, custom daily models are available only for the Chinese and U.S. stock markets and a basket of Crypto).
*Recently, platforms have often deleted our posts, so we will gradually replace some sensitive words. Starting with this article, we will refer to B**T*C as “Little Yellow.”
Attention! Many points of logic have been covered once and will not be covered a second time!!! Be sure to review previous weekly Wraps yourselves!!! Absolutely essential!
In the new version of the weekly publication, we have made the following main changes:
1) We have reordered major assets according to stronger logical connections and more clearly explained how their movements corroborate one another, giving readers a comprehensive picture to help them find anchors across assets... The process of seeking certainty is, in essence, the process of finding anchors for pricing...; 2) We have strengthened the detailed analysis of developments during the week, laying an expectations foundation for the long term. This supports portfolio positioning while also offering readers some reference for medium- and short-term actions... After all, every long-term decision is merely a series of rolling short-term decisions...; 3) We have reduced noisy asset categories. For positions we have exited, and for assets with no significant change in fundamentals (consistent with what was described the previous week),we will no longer provide ongoing updates in the weekly publication, taking up too much space; instead, we will add assets that are urgently worth watching for entry... After all, what matters for actual decision-making is what is happening now and what lies ahead. On this point, we need your cooperation: review the historical content yourselves; we will not take everyone through a history lesson every week... But review is necessary and must not be skipped. Before reading, please also read the Planet updates for the current week or the historical trading days. 4) The content will gradually incorporate our own understanding of the world of investing and trading, and systematically explain our ideas and principles. These are just one perspective, offered to spark further thought and for reference only; please excuse any shortcomings.
The weekly publication has been completely revamped since 251109. For details of the historical framework and content, see “WEEKLY WRAP 251026” and the earlier posts.
Answered several questions: 1) the magazine effect of the U.S. dollar; 2) the positioning of gold and silver; 3) whether A-shares are overvalued; 4) rebuilding positions in European markets; 5) what to do at this stage with the oil and oil-and-gas/shipping stocks we hold; 6) rebuilding positions in uranium; 7) Brazilian positions have entered the right-side parabola—just a brief reminder that they should now become trading positions.
I know that Planet content has, to a greater or lesser extent, been “shared” or used as “inspiration” for creating content... I have actually always been indifferent to this. The moment I type each word, I am prepared for it to no longer belong to me alone, but to all of you.
However, given that this year is rather unusual, I have one request:the long-term ideas that failed can be shared publicly; as for those with shorter time horizons, and the things we were fortunate enough to get right, please try not to share them outside the group. Just keep them quietly to yourselves.。
Thanks again.
I.U.S. Dollar Index
Chart: U.S. Dollar Index (four-hour chart, as of 260222)
In the weekly note two weeks ago, we wrote:...As of now, the model estimates that the point where the bullish trend ends is around 97.58. Of course, it is also possible that the price breaks below that level during the week ahead and then breaks back above it. At the edge of a key price level, this is the more common pattern of movement; there will be plenty of back-and-forth near the black line...In fact, the market did break below and then back above the level, and (as of now) has once again held above 97.58, while making a higher low (HL) and a higher high (HH). This is not good news for the stubborn dollar bears.
The narrative of policy uncertainty and foreign investors selling U.S. assets / diversifying globally has consistently driven the dollar lower. But as of today, that narrative has been fully priced in...
The covers of Barron’s and TE are clearly telling us this:
Trading against the covers of these top magazines has always been a good strategy.
The chart below shows a statistical analysis of the Economist magazine’s historical cover themes and the results of trading against them:
Finally, the U.S. Dollar Index relative-strength matrix:
This time around, we have expressed our bullish view on the dollar mainly through the pound (see below for details).
II.European defense spending
《WEEKLY WRAP 260104》 discusses LMT, our European defense proxy for the concurrent long position
(as of 25, LMT’s exposure to EU defense spending accounted for 10%+ of revenue),
The strong upward move is still continuing：
Chart: LMT (daily chart, as of 260208)
Since publicly taking the position, +~35%,
The take-profit level has already been moved up to around 647 (sharing this update as a courtesy). A signal to reduce the position has been issued here; execute it decisively and trim the position.
Just a casual aside: this has run much faster than expected, almost as if it wants to become a noteworthy macro bet for the year. Let’s see how far it runs; if it does well, perhaps it’ll earn a place in the 26 year-end review.
III.Euro/pound, dollar/pound,
Be sure to read 《WEEKLY WRAP 260208》 in full; it contains detailed information and the rationale for the fundamental-based bets.
Chart: EURGBP (daily chart, as of 260222)
EURGBP is building the tail end of a trading pattern and is poised for a breakout. (The trade model opened this position automatically rather early, at point B.)
Chart: USDGBP (daily chart, as of 260208)
USDGBP: unrealized gains on the long position continue to grow, and the take-profit level keeps moving higher.
Four.USD/JPY, Nikkei futures
Chart: USDJPY (daily chart, as of 260222)
Our view from two weeks ago remains unchanged: the position has been closed, and we have not continued trading here. Although the view is quite clear... this is not the optimal scenario, because it is not extreme enough to produce a strong trend... The FX outlook is trickier: gradual gains are the base case, but USDJPY has already turned back toward intervention risk, which is also rising; this will constrain further near-term upside. The two blue lines on the chart have temporarily made us lose interest in the yen...
Those who chased the long at the edge of the blue line probably aren't feeling too good now.
Chart: Nikkei futures (daily chart, as of 260222)
Likewise, our view from two weeks ago remains unchanged:Japanese equities will rise, but as above, the move is not extreme enough, so volatility may be limited and the risk/reward is not very attractive. We entered a long Nikkei trade last year around midyear when it broke above the purple rectangle, and held it until around year-end, roughly where the red arrow line in the chart above ends. The risk/reward was very good then, and everything was just getting started. By today, the 1x target measured from the rectangle has been reached. Combined with election results that fell short of right-tail expectations, the expectation here (at the red circle in the chart above) is for choppy trading or a pullback to the blue line...
Those who chased the price at the top of the red circle probably aren't feeling too good either.
Five.U.S. equity market
Chart: SPX (daily chart, as of 260222)
Continued modest back-and-forth consolidation. We are not trading the indices. However, Judging by the 100 bars of the previous top-like consolidation, the time for this top range to widen further is likely to be in March.
Chart: NDX/RUT (weekly chart, as of 260222)
NDX/NDX has broken below support, pointing directly toward the 9.0 target price.
Mid-cap stocks have also seen a pronounced reversal since 25:
Chart: NDX/IWR (daily chart, as of 260222)
The targets of the two H&S patterns in NDX/IWR point to two key price levels in 25年7月 and 25年4月,So far, prices have followed precisely the red-line path we charted two weeks ago.
...
This is paradise for bottom-up traders.
...
...
Sean also gave a more detailed account in his article yesterday of the U.S. dollar index’s subsequent path,
His experience in this area is greater than mine, so I’ll briefly share his view here; everyone can also refer to his assessment.
Figure: Sean’s Take (26.02.21)
https://www.meridianresearch.app/home?product=vega-trading
Section six, European markets (UK100, GER40)
Figure: UK100 (daily chart, as of 260208) (the model shows only the LONG ONLY section)
At the end of 1, when price movement stalled, we temporarily took profits and exited. Since re-entering on 2 month 2 day, the uptrend has resumed and continued strongly. The stop-loss has now been moved above 10540.
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.
Figure: GER40 (daily chart, as of 260208) (the model shows only the LONG ONLY section)
At the end of 1, when price movement stalled, we temporarily took profits and exited. Since re-entering on 2 month 9 day, the uptrend has resumed and continued strongly. The stop-loss has now been moved above 24950.
GER40 has been coiling inside this range for far too long. Compression at this scale usually resolves with a meaningful breakout.
Section six: silver and platinum
For the overall assessment, see 《WEEKLY WRAP 260104》 and the previous batch of related long-form Notes.
Figure: CMX silver (4-hour chart, as of 260222)
A few key points: 1) The break above the green descending trendline marked the official end of the decline, with the downtrend shifting to a range. 2) The higher low at HL has been confirmed. The market is already overbought here and near the edge; the next step—a shift from ranging to an uptrend—requires waiting for a higher high here at HH to be confirmed as well. We should have the result next week. 3) The four-hour uptrend has continued for 4 bars.
The smaller-timeframe long and short positions have restarted...
Figure: Smaller-timeframe long and short positions have restarted; the first attempt to go long on the 11 failed, while the long position from the 18 is still being held.
The stop-loss on the current smaller-timeframe long position has been moved above 79.7.
...
Figure: CMX silver (daily chart, as of 260222)
On the daily timeframe, after the ratio system signaled undervaluation, it reverted toward the mean. Note that the last time all three spread lines were jointly undervalued and rebounded from the 0-digit line was on 25 year 4 month 7 day.
...
For the planet’s members who pursue longer-term swing trading, our The daily model has still not turned bullish as of now and remains flat. If it turns bullish later, we’ll update you promptly in the group, so there’s no need to rush.
Chart: CMX Silver (daily model Trade Log)
...
Read articleReview this trade on your own, remember what worked, and don’t get complacent,
so next time we can work together to do even better.
...
Chart: SLV (daily chart, as of 260222)
SLV, last year we established initial positions against the trend at the three orange circles, then added to them to follow the trend when 25.11.25 turned from red to blue. Two weeks ago, we re-established part of our initial position here at the 2x target price. This was actually also the 50 daily level (the orange line in the chart above). On the 17, the 2x target price was triggered again, and we continued building part of the position.
The yellow line in the lower half of the chart above (currently reading 59.30) is the market CTA capital proxy we developed It has two uses: 1) when this proxy is at a high level, don’t call a top too readily, because as prices rise, these can be viewed as bulls with unlimited ammunition; 2) during an uptrend, when this indicator returns to the bottom, it is a good buying opportunity for those who remain bullish. They have already exited, and their exit means that as prices start moving up again, this capital could re-enter at any time, providing fuel to reignite the move.
For reference, the last time this proxy fell below a reading of 60 was from 25 4 to 6 (the purple box in the chart above).
...
Note that our daily Swing position has turned bullish and entered again.
The stop-loss is set near 69.8.
Chart: SLV (daily chart, as of 260222)
...
For more details, seeView notethis post:
Chart: A post about re-establishing a core position near 20 or 50 dma (depending on the microstate of the instrument)
...
Platinum:
Chart: NMX Platinum (daily chart, as of 260222)
For platinum, the Silent Moving Average has been declining and trendless for 6 bars; the daily model has still not entered a long position. CTA proxy reading: 53.
The price needs to get back above 2325 at a minimum.
Seven. Gold
Chart: CMX Gold (weekly chart, as of 260222)
Many people are watching the daily chart; we are focused on the new high on the weekly chart.
This week’s new high means just one thing: the so-called gold narrative is nowhere near its ultimate end. Although no one knows how far away The End is, this is definitely not it.
Chart: CMX Gold (daily chart, as of 260222)
GC found precise support and bounced off the horizontal line we drew months ago (the estimated price we plotted was 4428.3, while the GC actual low was 4423.2). As of now, the model remains flat. However, here gold, like silver, has also met the following conditions: 1) returned to the resistance level; 2) the stochastic oscillator is overbought, providing the first condition for a breakout; 3) an inside bar followed the down bar, and a further decline was rejected.
A formal breakout now depends on just two things: the silent moving average turning back up, and the first white line appearing on the momentum indicator below.
Chart: Gold/silver ratio (daily chart, as of 260222)
The gold/silver ratio reversed after reaching the 70 target price, as expected. This forms a trading range between 55 and -70.
Chart: GDX (daily chart, as of 260208)
GDX; the allocation position didn’t get a bargain.
The trend model is just 0.2% away from the next long entry...
...
Eight. Copper and aluminum
For an answer on when the industrial metals bet will end, see “WEEKLY WRAP 251221”
Chart: Copper/gold ratio overlaid with copper price (weekly chart, as of 260222)
The only difference is that this time copper prices are unusually high on the chart...
...
Chart: Shanghai copper (daily chart, as of 260222) (the model shows the LONG ONLY portion only)
The silent moving average turned from falling to silent. Two long positions were opened during the falling and silent phases, and both ended in failure, Following the trend really does matter; acting against it is not as comfortable.But we still followed through decisively.
Chart: FCX (daily chart, as of 260222)
Proxy basket: exited to take profits, 34 bars, +35.84%; no signal to go long again so far.
Chart: Global inflation proxy indicator for industrial metals (weekly chart, as of 260222)
It is still caught oscillating around the blue line. As long as it remains stuck here, it will be difficult for industrial metals as a whole, represented by copper and aluminum, to make a meaningful move or establish a trend.
Nine. Little Yellow and its friends
Chart: Little Yellow (daily chart, as of 260208) (the model shows only the SHORT ONLY portion)
It successively broke 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!) We have already taken profits and reduced the position here.
Since we took profits, Little Yellow has found precise support between our 1x and 2x targets and has traded in a narrow range ever since,
The hourly model works better at this level, because it can capture smaller swings back and forth on its own:
Chart: Xiao Huang (hourly chart, as of 260222) (the model displays only the SHORT ONLY portions)
If you compare the hourly and daily charts, you’ll notice a fascinating phenomenon: for Xiao Huang, the structure remains highly aligned across these multiple timeframes. Examples include the reduction signal at the piercing level and the inside-bar reversals that occur at almost the same positions on the hourly and daily charts. This is the result of extensive algorithmic participation in the market.
Also, The reason inside bars are important as reversal signals at the edges is actually a theoretical result at the level of market feel:
The inside bar you see on each timeframe is a consolidation with a narrowing range on its corresponding lower timeframe, or on the timeframe below that;This is somewhat like a multidimensional world. Market feel means that when you see a weekly or daily candlestick, you can see through it and also see what it looks like on the hourly or even minute chart. Dozens of lower-timeframe candles are themselves made up of dozens of even smaller candles... and each candle is a sample of dozens of lower-timeframe candles.
In other words, being able to see the hundreds of candles behind a single candle is market feel.
This is very important.
Ten. The Chinese market
I won’t include much here about trends. We’ve already decided to publish daily updates to the asset-state data for three timeframes.You can download the latest corresponding data tables each day from the community. Here I’ll share some data that you don’t usually get to see.。Data on individual mainland-market stocks are also now updated daily on Ganglong. Anyone interested can subscribe at this link (https://www.meridianresearch.app/home?product=asia-strategies）
Main text begins.
One of the key questions after returning from the New Year holiday is whether A-shares are overvalued.
Chart: Shenzhen Component Index (daily chart, as of 260222)
Chart: Shanghai Composite Index (daily chart, as of 260222)
The chart above is the relative-value matrix for the Shanghai Composite and Shenzhen Component indices.In fact, no one can directly determine whether an index is overvalued or undervalued. Valuation is futile; looking at A to trade A is meaningless. You need to look at B, or at B and C, to trade A. In an increasingly mature global pricing system, the only reliable result participants can ultimately depend on is the spread.
That brings us back to the question: why is cross-asset logic so important?
Because within a single market, you have no pricing anchor. Everyone has a different idea of value, whereas spreads are plain to see. This was Graham’s final piece of advice to the world in Security Analysis.
Here we use a three-filter spread matrix incorporating the bond market, foreign exchange market, and physical commodities. As shown above, this system has accurately identified nearly all historical highs and lows (though not necessarily immediately). Beyond turning points, the system’s greater value is actually in locating valuations, because turning points are not fixed and multiple assets may continue moving in the same direction, whereas relative positioning at the valuation level is definite. This can provide us with considerable guidance on market direction.
At present, valuations according to the three systems are largely in reasonable territory and are not overheated. From the Shanghai Composite’s perspective, two of the systems even still show undervaluation. This is uncommon at what is supposedly a “high level.” A reasonable assessment is that, at least as of today, valuations across the A-share market have not peaked—in other words, this is not the top.
...
Another perspective is the leverage and positioning of CTA funds. Take the Shenzhen Component Index as an example:
Chart: Shenzhen Component Index (daily chart, as of 260222)
The yellow line is our proxy indicator for leveraged funds (see Xingqiu for usage instructions)..
The first round of leverage build-up began on 24 year 8 month 29 day (with the Shanghai Composite at 8030) and ended on 24 year 10 month 18 day. The second round began on 25 year 4 month 17 day and ended on 25 year 10 month 15 day. The latest round began on 25 year 12 month 1 day and ended on 26 year 1 month 28 day (14342). The combined gains from these three rounds of fund inflows and outflows were 79.2%, broadly equivalent to the gain over the entire period of 78%.
As of now, the reading has turned upward again. Whether it continues to rise or moves lower from here, the bullish outlook remains unchanged as long as it can make a higher low than in 12 month.
...
Finally, the trend status has shifted from downtrend back to dormant.
What we need to do is wait for that key moment when it shifts from dormant to uptrend (follow the Xingqiu dataset!).
Often, market participants think their profits are the result of their own skill. In reality, most of the time, it is simply because we are operating within a broader backdrop in which the outcome favors us. Individual ability and skill often matter little; what matters is you must respect the market。
...
Eleven, Oil (the 200 DMA of the oil and gas allocation position and oil prices) and oil and gas/shipping stocks
Chart: WTI (daily chart, as of 260222) (the model shows LONG ONLY positions only)
Above the annual moving average and entering an uptrend structure; continue holding the long position. Move the stop-loss level to above 62.
Chart: BRENT (daily chart, as of 260208) (the model shows LONG ONLY positions only)
Likewise, above the annual moving average and entering an uptrend structure; continue holding the long position. Move the stop-loss level to above 67.
Several allocation positions remain open:
Chart: OIH (daily chart, as of 260222)
Since entry via Xingqiu: +~40%; a signal to reduce the position has appeared here, so part of the position has been closed.
Chart: XES (daily chart, as of 260222)
Since entry via Xingqiu: +~40%.
Chart: XLE (daily chart, as of 260222)
Since entry via Xingqiu: +~30%
...
More content:
Chart:https://www.meridianresearch.app/home?product=asia-strategies
Oil and gas and shipping stocks (operations are carried out mainly using domestic instruments on Hong Kong/Dragon Xingqiu):
Chart: synchronized with the post on the 1th of 7 on Ganglong
The rationale for betting on shipping and oil and gas was the same: prices had reached the right levels.
At the time, the screened list on the 250dma included Nanyou and Haineng. Most of the position went to Haineng:
Chart: COSCO Shipping Energy (daily chart, as of 260222)
Bought at the open on the 8th and held to date: 28 bars, up ~80%;
The take-profit level has now been moved to the low of the candle inside the outer candle (the second candle from the right in the chart), namely 16.27.
...
Chart: Shipping enters the retail-investor handoff phase, as the boom narrative and prices play out
VLCC spot has skyrocketed, spurred on by strong fundamentals, a large part of the fleet sanctioned and now Sinokor controlling a large part of the fleet
Balmo done WS 190 this evening (TCE ~180k/d)
The risk is very high now. Many retail investors will start chasing the rally. Remember: when something becomes “known” to people, that is when we prepare to sell. Always focus on who you will be selling to.
Chart: FRO begins locking in prices; management is trying to lock in cash flow during the boom. This is a precursor to a cyclical peak
Chart: FRO (weekly chart, as of 260222)
...
Those who managed it should review their decisions; those who didn’t needn’t worry. There are plenty of opportunities.
Chart: Enjoying the gains (quietly)https://www.meridianresearch.app/home?product=asia-strategies
Don’t forget our New Year’s message.
The tougher the year, the more quietly we should put in the work.
Don’t be rash; keep a low profile. But that’s no excuse for slacking off—the meat needs to make it into the bowl.
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 holding.
We’re preparing to tighten the take-profit. The take-profit level has now been moved above 57.8.
Someone messaged me asking why I don’t talk more about EEM. Here’s a brief, general response:
The reason I don’t mention it much is that this is a consensus trade. With trades like this, we just get on with it, because there’s nothing distinctive about our approach, and it wouldn’t feel right to present it as our own insight. The view that emerging markets are a good long is not valuable in itself; it has been the consensus view among everyone at every Wall Street institution since last year. The key is being able to hold on.
Thirteen. Uranium
Chart: URA (daily chart, as of 260222) (the model only shows the LONG ONLY portion)
Uranium trading remains valid for the foreseeable future.Re-entered a long position, with the stop-loss above 50.8.
...
Chart: China Uranium Corporation (hourly chart, as of 260222) (the model only shows the LONG ONLY portion)
Here’s a related mainland proxy as a bonus.
For custom models (currently supporting daily timeframes only), you can contact Mundell by direct message.
Fourteen. USD/CHF
Chart: USDCHF (weekly chart, as of 260222)
The main USD/CHF trade is a retracement from a higher-timeframe 3x target, This trade carries significant risk because it goes against the major trend. Don’t imitate it lightly.
Chart: USDCHF (daily chart, as of 260222)
Entered at the green arrow (see an earlier post on the Planet for details). The unrealized profit is now starting to grow, and the stop-loss has been moved to breakeven. The initial target was the upper boundary, at the 2x target shown on the chart, but price may meet resistance at the yellow line. We’ll assess it then; if resistance is strong, we’ll close the position early at the yellow line.
Fifteen. Brazil
Chart: WEZ (daily chart, as of 260222) (the model only shows the LONG ONLY portion)
Brazil is a familiar name to longtime Planet members. Last year, we did a lot of work around it, and the Planet published many in-depth articles explaining the fundamental rationale behind this macro thesis. The reason we haven’t discussed it repeatedly since is that there have indeed been few new developments, but my silence doesn’t mean you can afford to ignore it. Anyone who hasn’t read and thought through those articles carefully should go back, find them, and study them independently.
The main reason for bringing it up again today is that it has entered the parabolic late stage of the right-hand side of the chart. Accordingly, we will shift it from a purely strategic allocation to a swing-trading position.
The take-profit level for the corresponding ETF allocation (WEZ) currently held has been moved above 37.5. Keep an eye on it yourself.
...
(End of article)
A quick plug: the companion U.S. stocks, A-shares, Hong Kong stocks, and commodities Planets are continually being improved.
U.S. stocks:https://www.meridianresearch.app/home?product=us-strategies(Xingzhi)
A Port:https://www.meridianresearch.app/home?product=asia-strategies(Hong Kong Dragon)
Commodities:https://www.meridianresearch.app/home?product=commodity-strategies(Earth’s Core)
Note: All content in this article is for reference only, does not constitute any investment advice, and is not a basis for any laws, regulations, or regulatory policies. Investors should not use or rely on this information as a basis for making decisions.