March twenty-second, two thousand twenty-six (260316-260322)
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Custom models by private message (currently, customization is available only for daily models covering the Chinese and U.S. stock markets and a basket of crypto assets).
*My posts have recently been frequently deleted by the platform, so we will gradually replace some sensitive terms. Starting with this article, we will refer to B**T*C as Little Yellow.
Please note! Many lines of reasoning have already been covered and will not be repeated!!! Be sure to review previous weekly Wraps on your own!!! This is essential!
In the new weekly edition, we have made the following changes:
1) We have reordered the major assets according to stronger logical connections and explained more clearly how they move together and validate one another, providing readers with a comprehensive picture to help them find anchors across assets... The process of seeking certainty is, in essence, the process of finding an anchor for pricing...; 2) We have expanded the detailed analysis of how things played out during the week, laying the groundwork for expectations over longer cycles. Alongside supporting portfolio positioning, this also provides some reference for readers’ medium- and short-term actions... After all, every long-term decision is simply a series of rolling short-term decisions...; 3) We have reduced the number of noisy asset classes. Positions that have already been exited, and assets whose fundamentals have not changed much (consistent with what we said the previous week),will no longer be continuously updated in the weekly edition and take up too much space. Instead, we will add assets that are urgently awaiting entry and observation... After all, what matters in practice for decision-making is what is happening now and what lies ahead. On this point, we need you to do your part and review the historical content yourselves—we will not be giving everyone a history lesson every week... But review is necessary and absolutely cannot be skipped. Before reading, please also read the Planet updates from the current week or earlier trading days. 4) The content will gradually incorporate our own understanding of the world of investing and trading, and systematically explain our ideas and philosophy. These are our views alone, intended to spark discussion, and provided for reference only; please bear with us if they are lacking in any way.
Starting from 251109, the weekly edition was completely revamped. For the historical framework and content, see “WEEKLY WRAP 251026” and earlier editions.
Starting from 260322, the weekly edition was updated again. Its content is organized into four main categories—equities, bonds, foreign exchange, and commodities—to lay out the key narrative.
Writing and trading sometimes conflict: opinions create bias, and bias affects decision-making.Once certain things are written down as definitive, they often become conclusions that a person feels compelled to defend. We will do our best not to fall into that trap.
Image: Linda’s interview. This material was shared in the Planet, but the platform took it down. I see that more than a hundred friends have already downloaded it. Those who didn’t get a chance to see it can wait a little longer; I’ll try to remove sensitive details from the content and upload it again.
Chart: Compared with conviction, what we do is an if..then business. You could call it a sign of cowardice, but it is indeed the rule for surviving in the face of Mr. Market.
I.FX market (DXY, renminbi, CHF, INR, JPY, AUD, BRL, MYR, SEK)
Chart: US Dollar Index (four-hour chart, as of 260322)
Last week, the weekly note said the index was approaching resistance; we expected a pullback that would not break the red line, followed by continued higher highs.In fact, the market did move (once again, as expected); the US Dollar Index made a wick-like failed breakout at the red line we had drawn last year, then continued higher. Looking ahead from here, it will test the previous high and make a new HH.
We cannot see any further ahead; we will have to revisit this later. We do not predict the market.
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Our broad framework for the dollar is back to flat; whether in the broad dollar or DXY, it has basically returned to around flat so far this year, that is, the range since mid-25. This is the dollar's neutral range, and why we say we cannot see any further ahead. The market now has to judge whether the Middle East conflict will merely pause the decline or can push the dollar above the top of its range. We have no pricing power, so we can only follow.
Essentially, the question is whether the shock will extend from oil prices to supply-chain disruptions and shutdowns. If so, the global cyclical recovery that had been supporting European and emerging-market currencies would also be cut short. In other words, whether the dollar strengthens again no longer hinges on the US itself, but on whether the global recovery trade outside the US can remain intact.
We do not favor taking large one-way positions before a decisive breakout.
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If the conflict eases relatively quickly, the most suitable trading proxies would be those procyclical commodity exporter currencies, such as AUD, BRL and MYR:
Chart: USDBRL, USDAUD and USDMYR (daily charts, as of 260322)
Whereas if supply disruptions drag on for longer, policymakers will ultimately have to allow a larger exchange-rate adjustment. The most typical outcome would be a stronger CHF and a weaker INR; in fact, neither currency has yet fully priced in its potential move under a persistent-shock scenario:
Chart: CHFINR (daily chart, as of 260322)
Note: Switched to a long position; stop-loss above 117.15
The reason for choosing CHF as the trade pair is that even if SNB keeps 0 interest rates unchanged at its 3 meeting and reiterates its willingness to intervene against excessively rapid appreciation, its path is still more likely to resemble 2022: it initially looks weak because of intervention and verbal pressure, then the Swiss franc strengthens again as inflation and risks to European growth rise.The Swiss National Bank does not simply dislike a strong franc; from policymakers' perspective, the exchange rate and interest rates are both tools to be used. Since interest rates are already very low, under more persistent inflationary pressure they may instead be more willing to tolerate, or even implicitly rely on, some CHF appreciation to stabilize prices.
Regarding India, for those who have not had time to finish reading, you can read alongside Notes260317 “Oil Prices Are Only the Opening Act; the Real Repricing Will Be in Growth, Exchange Rates and Industrial Chains”Taken together, the reason we say INR is one of the clearest vulnerable currencies in this potential shock trade is that India is highly sensitive to Middle Eastern energy, physical supply and remittance inflows. Higher oil prices, worsening supply and any weakening in Gulf economies would all hit India's external balance at the same time. In addition, a weakening economy would also drag down India's remittance income. Against the backdrop of RBI having accumulated a huge short-term forward position, the scope and rationale for continuing to use intervention to forcefully stabilize the exchange rate are diminishing.
Chart: Notes260317 “Oil Prices Are Only the Opening Act; The Real Repricing Will Fall on Growth, Exchange Rates, and the Industrial Chain”
The day after publication, USD/INR broke out, and we added to our long position at the very first opportunity,
This trade’s entry was a substantive declaration that the shock trade had begun:
Chart: USD/INR (daily chart, as of 260322)
Note: The take-profit level has been moved up to above 92.83
As we keep saying, the only way to buy before a move starts (or at least as it starts) is to do thorough research in advance, so that when the price arrives, we can respond in the best possible way at the right moment. Ours is an if..then.. business: we never predict the market; we simply respond responsibly to the information it gives us. Expectations are not predictions. Those expectations about price paths may look like predictions, but in fact they are research—in other words, we simply do not want to be caught off guard.
All technical analysis offers is “levels worth watching.” Only when the market validates our view can we make repeatable decisions with a sound basis for entering and exiting; that is precisely what expectations mean, because only when we have done our homework can we have trading scenarios prepared in advance when prices actually trigger them.
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As for the yen, the market is still mainly trading inflation and hawkish repricing, so the yen has not yet reached the most comfortable entry point. Only when higher oil prices clearly begin to evolve into concerns about growth and recession, pulling equities and long-term yields down with them, will the yen more clearly display its safe-haven characteristics; at that point, we may see a daily-chart technical breakout:
Chart: USDJPY (daily chart, as of 260322)
As for the renminbi, its overall stability since the war began reflects two forces offsetting each other. On one side, although China is a net energy importer, the oil-price shock does less damage to its growth and current account than it does to those of many of its Asian peers. On the other, China’s export shock is still ongoing, and the monthly trade surplus remains astonishingly high.
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Anyone who has not read the views on the USDCNH section in this issue of “WEEKLY WRAP 260301” should be sure to go back and read it. We remain bullish on renminbi appreciation, but things may not look so favorable here for those expecting the trend to continue at the same pace as over nearly the past year.In fact, the timing of our assessment a few weeks ago marked a turning-point low (the red circle indicated by the arrow below):
Chart: USDCNH (daily chart, as of 260322)
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Of course, we always need to be prepared for the opposite path. Here, that would mean a scenario in which the conflict ends quickly. In that scenario, the Swedish krona is a core trade proxy that we are watching closely, because it is one of the few currencies with both “exposure to downside growth risk” and “exposure to an energy shock.”If the situation eases quickly and risk assets rebound, SEK will certainly be one of the strongest recovery currencies:
Chart: SEK overlaid with WTI (daily chart, as of 260322)
Two, Equities (U.S. stocks, the Nikkei, UK100, GER40, EWZ, Hang Seng Tech, EEM)
Chart: “WEEKLY WRAP 260322”
SHOW TIME...
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First, a quick review of a stopped-out trade. “WEEKLY WRAP 260104” discussed the European defense proxy LMT, which we also bought at the same time (as of 25, LMT’s revenue exposure to EU defense spending was 10%+):
Chart: LMT (daily chart, as of 260322)
The first long position was closed on 2.20/26, at +~30%.
The attempt to go long again triggered a stop-loss exit.
Chart: The attempt to go long again has failed
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Now to the main event: U.S. equity indices. Of course, let’s start with FOMC:
The Fed is now in a classic dilemma: on one side are the energy shock and the potential for inflation to pick up again; on the other, demand and growth are weakening at the margin. Powell’s tone was hawkish, but he did not signal a shift toward rate hikes. The median dot still points to one rate cut this year, though it is already very close to no cuts. In other words, while rate hikes are not currently in view, rates will certainly remain unchanged for some time.
Had there been no conflict in the Middle East, Waller might have dissented in favor of rate cuts. But he has now also chosen to stand pat, showing that even dovish members are unwilling to ease lightly at this point. This to some extent reinforces our view that the Fed is more likely to remain on hold for the entire year.
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Compared with the rate decision, what really caught our attention in this week’s material was FOMC’s long-term growth expectations and assessment of the neutral rate; in particular, the median for long-term GDP growth rose from 1.8% to 2.0%, while the median for the long-term interest rate was also raised to 3.125. The reason this matters is that it reflects the Fed’s acceptance that productivity trends are rising, but not of the linear conclusion that “higher productivity = lower inflation = lower interest rates.”
Powell’s logic is that stronger supply may mean higher potential growth, but it also means a higher r*; meanwhile, the inflation outcome still depends on whether demand grows faster in tandem. So AI and productivity do not automatically provide a reason to ease.
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Chart: SPX breaks below a key support level
After a top consolidation lasting 100 bars,
SPX broke below its key horizontal level, as well as the 200-day moving average, the annual moving average that marks a key turning point between bulls and bears:
Chart: SPX (daily chart, as of 260322)
More than a month ago, we shared on the platform our expectation that SPX might see a widening in its trading range after 100 bars of top consolidation: if it could not move higher, it would have to fall. The break below did indeed occur at precisely the 100-bar mark—a self-similar outcome.
The yellow line above is the annual moving average for SPX. If it cannot quickly reclaim this level, a major downswing will officially begin. “Major” here could mean the size of the move (a swift and forceful 10%+) or its duration (a slow, grinding decline). The former is actually more favorable for trading and for what follows: a swift, forceful fall would make room for another move higher. But if the market takes the drawn-out route, those trading U.S. equities are in for a painful stretch with very poor tradability.
The current stop level for a short position in SPX is above 6636—in effect, above the annual moving average.
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Chart: NKD (daily chart, as of 260322)
Nikkei futures have likewise broken below 53590’s key medium-term support level. The downside target is the 200-day moving average (the yellow line on the chart).
As of now, the stop price for the short position is above 53795.
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Chart: UK100 (daily chart, as of 260322)
UK100 has continued to fall since the model turned bearish (red arrow on the chart). The downside target is the 200-day moving average (the yellow line on the chart).
As of now, the stop price for the short position is above 10250.
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Chart: GER40 (daily chart, as of 260322)
GER40 has continued falling ever since the model turned bearish (red arrow on the chart),
As of now, the short stop price is above 23261.
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Chart: Hang Seng TECH (daily chart, as of 260322)
The attempt to go long at the green arrow (see the previous Wrap for details) hit its take-profit level on Friday, and we exited to take profits,
As of today, when this was published, all timeframes—from the 15m chart up to the monthly chart—have turned bearish.
Turned from bullish to bearish; the stop-loss is currently set at 5108...
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I’ll leave the mainland indices aside here; you can check the data across the three timeframes yourselves.
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Chart: EEM (daily chart, as of 260322)
We took profits on EEM two weeks ago. It has continued falling ever since we publicly announced our exit to take profits on the Planet. To go long again, the price needs to get back above 57.9. (The little dots on the chart have nothing to do with long or short positions; they just mark inside/outside bars.)
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Chart: EWZ (daily chart, as of 260322)
We took profits on the Brazil position two weeks ago. It has continued falling ever since we publicly announced our exit to take profits on the Planet (red arrow in the chart above; we exited at 38.65, see “WEEKLY WRAP 260308”), and it has now fallen by about 10%;
To go long again, the price needs to get back above 36.8...
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Three, Commodities (gold, silver, copper, aluminum)
Chart: gold, silver, and nonferrous metals. Last week’s newsletter flagged the risk of a selloff, and the market then fell sharply as expected.
Chart:From the view to the execution, the credit is yours; it has nothing to do with me.
Chart: CMX silver (daily chart, as of 260322)
As I said last week, don’t forget that silver is actually a risk asset.
Short position; the daily take-profit level has been moved to above 80.3.
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Chart: CMX silver (four-hour chart, as of 260322)
Small-timeframe trading position, short; the take-profit level has currently been moved to above 70.5.
Chart: on taking partial profits at T3
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Chart: SLV (daily chart, as of 260322)
SLV, the long trading position was stopped out as expected. At the yellow circle, I added to the long-term allocation position again as planned. If it returns to the lower 1x target, I’ll make a second purchase for the allocation position. This portion is being built gradually in batches, Note, the trading position has remained flat the entire time; if you’re an individual trader without much capital, there’s really no need to follow my approach of building an allocation position. The capital utilization is relatively low, and there are many markets where you can trade swings. I’m just sharing this as a courtesy; it does not constitute a buy or sell recommendation.
Chart: Continuing to build allocation positions in physical mineral resources on dips
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Chart: CMX Gold (daily chart, as of 260322)
Review last week’s content on your own. The current position is short, Leveraged funds are still selling, but the first institutional buy signal appeared on Friday.
Chart: “WEEKLY WRAP260315”
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Chart: GDX (daily chart, as of 260322)
GDX has continued to fall ever since exiting Planet (red arrow on the chart),This is exactly why you must set take-profit and stop-loss levels: they really can save your life!
Likewise, if it returns to 75, we’ll start gradually adding back to the allocation position.
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Chart: Shanghai copper (daily chart, as of 260322),Failed to reclaim the green line
For copper, our data dashboard identified this at the earliest opportunity(before others could see the downtrend with the naked eye / trades must be initiated before the move begins to gain an advantage in the subsequent trend)it identified the start of the structural downtrend...
Chart: Make good use of the data dashboard
At present, for Shanghai copper to turn bullish again on the daily timeframe, it needs at a minimum to reclaim the level above 99500.
Chart: FCX (daily chart, as of 260322)
Likewise, the copper proxy basket has fallen by approximately 20% since exiting the new long position on Planet.Once again, I want to emphasize the importance of stop-losses! If I hadn’t followed through decisively at the time, this 20% would have come straight out of my own pocket.
As the post on Planet says,
our task is to deal with losses, not profits, because profits will take care of themselves.
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Chart: Aluminum-copper ratio (weekly chart, as of 260322)
The chart above shows the aluminum-copper ratio on a weekly timeframe. As of now, all the shorter timeframes have turned bullish, and the weekly timeframe is also approaching the level needed to turn bullish.
We won't repeat the fundamental information on aluminum here. You can take a close look at this post on Planet:
Chart:View note
Simply put, in the current market environment, aluminum does have some relative long potential among industrial metals. But as market participants, we cannot predict, and cannot get in early. We must wait for the price to validate our view.：
Chart: Aluminum (daily chart, as of 260322)
At present, for the daily timeframe to turn bullish, at a minimum, the price needs to reclaim 24040. For the weekly timeframe, the price needs to get back above 26185.
Chart: A unified answer at the micro level
Still on aluminum: a friend messaged me privately to ask about choosing trading proxies. This is actually quite complicated, because there is no universal template or standard that can simply be applied.We haven't kept our own proxy-screening method secret. We use the three-system approach from the articles in the Planet column.
1) Fundamentals: Compared with the financial perspective of traditional value investing, we screen more from a business perspective, and whether the company is profitable at this point in time—or how much profit it makes—is irrelevant. Most important is that its business has a simple, clear bullish rationale. We're not focused on how a company will develop, but on whether its story might be recognized and heard by most people;What you trade in the market has nothing to do with the company behind it. Unless you're on the major shareholders' list, talking about a shareholder mindset is meaningless;
2) Fund flows and relative performance: Here, we use a multidimensional relative-performance matrix. On the one hand, it looks at the price correlation between micro-level proxies and broad macro asset classes. Rather than focusing on whether they move in sync at a particular point in time, we pay more attention to whether their price swings expand consistently within a particular swing. Lack of synchronization is normal and is the case most of the time. If you only look at this, you'll be misled; the magnitude of the swings themselves is what matters. On the other hand, it also covers fund flows and trading-relative performance between sectors (if there is no clearly defined macro theme, then among sectors) and within sectors (the leaders).
3) Technical analysis: In essence, the execution system determines whether to be bullish or bearish, while the trend system and calculations based on micro-level data determine position size. Most importantly, don't predict and don't get in early. Before the market clearly tells you that it's going up, don't try to be clever. Being too clever often makes it hard to achieve the expected result.
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Oil: followed the plan and exited; currently flat.
Chart: Knowing when to advance and when to retreat
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Four. Alternative assets (Xiao Huang)
Chart: Xiaohuang (daily chart, as of 260322) (the model only displays the SHORT ONLY portion)
First broke through our 1x target (74.5k) and then our 2x target (65k)Near 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 a position!) We have already taken profits and reduced the position here; we continue to hold the remaining short position and wait for an automatic exit.
Since taking profits, Xiaohuang has found precise support between our 1x and 2x target levels and has traded in a narrow range ever since,
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(End of article)
A quick plug: the companion U.S. stocks, A-shares/Hong Kong stocks, and commodities planets are being continuously improved.
U.S. stocks:https://www.meridianresearch.app/home?product=us-strategies(Xingzhi)
A-shares/Hong Kong stocks:https://www.meridianresearch.app/home?product=asia-strategies(Ganglong)
Commodities:https://www.meridianresearch.app/home?product=commodity-strategies(Dixin)
Note: Everything in this article is for reference only and does not constitute investment advice or serve as a basis for any laws, regulations, or regulatory policies. Investors should not use or rely on this information as a basis for making decisions.