Market On Close, Tuesday 24 February
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State Of The Union Edition
by Alex King, CEO, Cestrian Capital Research, Inc.
Yesterday, due to this post on the internet and its likely pre-arranged amplification, the market chose violence.
I spent 100 hours over the past week researching, writing and editing the piece we just put out.
— Citrini (@Citrini7) February 22, 2026
It’s a scenario, not a prediction like most of our work. But it was rigorously constructed, dismissing it outright requires the kind of intellectual laziness that tends to get…
IBM dropped 10%, Crowdstrike something similar, ZScaler commited very determined acts of self-harm and software in general continued its Great Escape style tunnelling activities, and I’m not talking VPNs here but rather the route direct from the basement to the Very Gates Of Hades.
Shorts started to cover about 10 minutes before the close yesterday, and today at least some software names had started their 12-step rehabilitation back into polite society.
I have to tell you that in this environment, where the indices are calm on the surface but single stocks are crazy volatile beneath, buy and hold is not a great strategy. DCAing, “buy quality”, “own the best fundamentals”, these are all variants of “build it and they will come” which is also known as a Field Of Dreams or in the modern idiom, HOPIUM.
Buy and hold is a great way to burn value when markets are choppy like this. I think to do well in this environment you need either emotionless stops on your positions and the discipline to not jump back in after you’ve been stopped out, because FOMO, or, you need an algo. Why an algo? Because algos don’t read the Internet, at least our algos don’t. By design. They just watch price and volume and a couple other simple technical factors. And they are able to spot when a trend is underway better than most humans - and in my experience they are really able to hold onto a trend longer than the wetware.
If you’re not using algos in your investing or trading, you have your head in the sand. It’s that simple. I speak as a three-decade professional investor. There are plenty better investors and traders than me, but I do alright, and I can tell you that I run a goodly proportion of my own capital on the algos we provide to our members. Why? Because I’m not precious, I don’t believe myself to be a Trading God, I just want to make money - and lose less money when I lose it - and I find I can do that better with the help of the machine. Simples.
Use The Machine To Beat The Machines
For single-stock investing and trading in the top names, don’t miss out on our YXI Systematic Signals service. This service is extremely easy to use. Each morning, before the New York open, you receive a simple set of signals for each of the 15 tickers it covers - these are all highly liquid stocks and ETFs. A signal of “1” means “buy” or “hold” (if the signal was 0 yesterday it means buy, if it was 1 yesterday, it means hold). A signal of “0” means “sell” or “do nothing” (if the signal was 1 yesterday it means sell, if it was 0 yesterday it means do nothing). You can do with these signals what you will - trade them mechanically, factor them into your own analysis - whatever. But if you had traded them mechanically from inception, this is what the model has achieved:
This 26.8% gain, from inception on 1 April 2025 to 23 Feburary 2026, has been achieved with a Sharpe ratio of 1.91 and a maximum drawdown of 8.3%. Or to translate: doubleplusgood.
You can learn more here:
Alex King
Righto. The market. Let’s get right into it. Today’s note is for our Inner Circle members only.