May seventeenth, two thousand twenty-six (260511-260517)
Author: Ariston
X: @Ariston_Macro
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Zero. The Lonely Chapter
The hardest part of the Lonely Chapter is that the scene of Rocky training in the movie lasts only 90 seconds,
One. When long positioning across global markets starts to show divergent pricing (also, synchronized equity proxies)
Since Planet went net long across global markets in early April, a group of key proxies led by technology have driven stock indices steadily higher, forming a parabolic right-tail pattern, In this situation, it is difficult to try to judge subjectively when the rise will end. As market participants without pricing power, the only thing we can do is sit quietly and wait for the market itself to tell us, “Time to rest”—when the market dances, we should dance along; when it decides to rest, we should rest too.
Chart: Korea-India ratio (daily chart, as of 260517)
We have discussed the chart above many times before on Planet. Behind the Korea-India ratio is global growth versus global value; it can also be viewed as a relative-value pair for technology trades versus traditional trades. On the daily timeframe, it has now formed an extremely steep parabolic right tail. The reason for bringing this chart out again is that, on the weekly chart, this trade itself has once again reached a key horizontal level....
Chart: Korea-India ratio (weekly chart, as of 260517)
The point of including this here is not to use a single chart to refute the entire logic of the Korean technology trade. Rather, when price reaches this point, changes in the risk-reward ratio behind it will naturally affect subsequent capital flows, and those flows are bound to be reflected in price again. A pause at this level is quite possible.
...
Chart: “WEEKLY WRAP 260510”
Last week’s newsletter discussed why the Korean index is important in this rally. To some extent, compared with U.S. tech stocks or the domestic market’s import-substitution tech stocks that follow the trade, the Korean index has become the best proxy for monitoring leveraged trading globally, given its large speculative capital base and high level of retail participation. The Korean index’s long-short line is also the long-short line for leveraged technology trading across global markets. On the daily chart, this line is at 7400, while on the hourly chart it is below the T3 target price identified in last week’s newsletter:
Chart: KOSPI (hourly chart, as of 260517)
After reaching the 7781 target price given in last week’s newsletter, price lost momentum and moved lower. We exited after the break below T3.
From early April until the bulls closed out this week, KOSPI+～47%. For now, the bulls need a breakout to a new high for confirmation.
Chart: KOSPI (daily chart, as of 260517)
The daily timeframe shows a clearer structure and is also the main battleground for most HF institutions and smart money focused on swing trading. Since we turned bullish on the Korean index above 5438, price has risen steadily to reach the daily 7944 target price (the highest close was 7981). After hitting the target, price fell sharply on Friday, down -6% in a single day. This was the largest one-day decline since March (the March decline was when we said the Korean index had reached a short-term top).
At this week’s close, price still closed above the long-short level of this larger structure, but the position is already precarious.
...
Meanwhile, a more pronounced shift between bulls and bears has already emerged in the mainland market.Taking CSI 500 as an example, after breaking below our estimated key long-short level on Thursday, it fell further on Friday. If the decline continues, it could reach the short-side T1 7900 target. This path would be quite painful for many people. After a fairly clear primary uptrend in tech, it is unrealistic to expect capital to quickly produce the so-called sector rotation; a more likely outcome is a weak, depleted handoff from day to day.
The bulls need to reclaim the red line quickly to win back the territory.
Chart: CSI 500 (daily chart, as of 260517)
...
The U.S. dollar index is likewise approaching a turning point between bulls and bears, Although my assessment is that the price will most likely still reach T2(it may also first break below the line and then reach it, forming a failed breakout). If it moves up again here, I will not trade it; I will stop opening positions first.
Chart: SPX (daily chart, as of 260517)
Non-U.S. markets—the key link in the so-called lack of synchronization among global market bulls: the emerging-market trading proxy EEM has closed out its long position...
Chart: EEM (daily chart, as of 260517)
Besides EEM, it is also worth mentioning the Brazil trade here. The main reason is that ever since we turned bearish on Brazil from a bullish stance a few weeks ago (see previous weekly issues for details), die-hard bulls in many Brazilian assets (often seen carrying around Stanley Druckenmiller’s video bullish on Brazil) have vehemently berated and attacked us...
Actually, the view itself is not important. In fact, when we were bullish on Brazil last year, these people were nowhere to be found. If you do not respect the market’s own patterns of movement, and instead keep your head down, focused only on your positions and your own thinking, it is often difficult to get good results. Most importantly, the market really does not care what you (or I) think.
Lివermore said this classic line many years ago: in the market, there is no so-called bull side or bear side; there is only the “right” side.....
How do you get it right? He did not go on to explain.
Dance when the market dances, and rest when the market rests. Essentially, this means letting go of attachment to the idea of “I” as the subject. Let go of that attachment, and at least your positions will not dictate your thinking. That is my answer; you can have your own answers too.
Chart: It has actually already been translated; I’ll post it to the community tomorrow. It wasn’t posted on Saturday because I started a new Saturday macro chart collection column. The “What I’m Reading and Watching” section may be moved to after Friday’s close going forward, after which the schedule should become fairly regular.Every Sunday WEEKLY WRAP weekly issue; an event trading calendar every Monday; regular data-set updates on trading days midweek, plus occasional updates to fundamental Notes, miscellaneous commentary, and views; after Friday’s close, sharing some of my own wide-ranging reading materials beyond the markets; and a Saturday macro chart collection...
There may be more new columns in the future, as long as you don’t feel there’s too much content... or find me too annoying...
II. Long-short synchronization among some other equity trading proxies:
Note: Everything shared within the community is for informational and reference purposes only. Recipients are not deemed to be our clients by virtue of reading the community content. Nor does it constitute an invitation to anyone to sell or buy securities or other investment products, and it should not be relied upon as a basis for trading.Markets involve risk; invest with caution. All information and opinions in this community do not constitute investment advice; past performance is not indicative of future results.Investors should carefully assess matters based on their own risk tolerance, make independent decisions, and assume full responsibility themselves. Under no circumstances shall we be liable for any losses arising from the use of the community content.Relevant data may be delayed or contain errors. We assume no legal liability for the completeness or accuracy of the information.
1/ NVDA: After breaking out of the purple rectangle, it has reached the T1 long target price; a break below 220 constitutes an exit to take profits.
Chart: NVDA (daily chart, as of 260517)
2/ INTC: Followed last week's newsletter plan strictly and took profits, exiting the position.
Chart: INTC (daily chart, as of 260517)
3/ AMD: Still holding. The take-profit level has been moved from 400 in last week's newsletter to above 408; a break below it would trigger a profitable exit.
Chart: AMD (daily chart, as of 260517)
4/ SGML: A lithium-resource proxy. After exiting in line with last week's newsletter, we chased back in, but the renewed bullish turn failed, and we have exited.
Chart: SGML (daily chart, as of 260517)
5/ NQ: Reached the previously planned T2 long target price, then the market plunged immediately. The take-profit level has been moved to above 29k; a break below it would trigger a profitable exit.
Chart: NQ (daily chart, as of 260517)
6/ SOXX: The take-profit level has been moved from above 480 in last week's newsletter to above 490.
Chart: SOXX (daily chart, as of 260517)
7/ Nikkei: Reached T1, The momentum faded too quickly here, so the take-profit level should not be moved.
Chart: Nikkei futures (daily chart, as of 260517)
Three. Foreign exchange: yen, U.S. dollar
About two or three weeks ago, we discussed our view on trading the yen. The main points were essentially:
1) The impact this time will not be that large; 2) the range can break either way, and the key is the two lines at 157 and 155. Moving above the line at 157 would show that the market does not buy the intervention thesis; breaking below the line at 155 would show that the market has surrendered to intervention.
Chart: USDJPY (hourly chart, as of 260517)
Clearly, pricing took the first path: after breaking above the red line at 157, it continued climbing and has not looked back. That line has now turned from range resistance into strong support. Where there is support, there is a fundamental story to tell,
Some charts I’m watching
...
(End of article)
A quick plug: the companion U.S. equities, A/H shares, and commodities Planet channels are still being continuously refined.
A quick plug: the companion U.S. equities, A/H shares, and commodities Planet channels are still being continuously refined.
U.S. equities:https://www.meridianresearch.app/home?product=us-strategies
U.S. equities: https://www.meridianresearch.app/home?product=us-strategies
A/H shares:https://www.meridianresearch.app/home?product=asia-strategies
A/H shares: https://www.meridianresearch.app/home?product=asia-strategies
Commodities:https://www.meridianresearch.app/home?product=commodity-strategies
Commodities: https://www.meridianresearch.app/home?product=commodity-strategies
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.
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.