MarketsStrategies
Paper drafts. Alpha never places an order. Illustrative, not investment advice.
One chain of evidence. Three futures. A plan on paper for each.
Alpha’s scenario engine follows the evidence to where things stand now, maps what could follow (how long each future lasts, the signal that would start it, what it moves) and drafts a plan on paper for each, sized to the risk you state. You decide.
Technology · A worked example
AI bought the memory. Carmakers got the bill.
A worked example, every link sourced. Alpha has not published it as an article and has sealed no call on it, so no future carries a probability. Sources read 2 Oct 2026.
01 Reported
+93%
Memory contract prices rose about 93 to 98 percent in three months, the first quarter of 2026.
02 The obvious reading
Safe?
Cars use older memory, so they should be safe from AI’s demand.
- Test
- Are both made in the same factories?
- Rejected
- They are. AI’s memory takes about three times the wafer, and the makers free it by retiring the oldest lines first: the ones cars run on.
03 Reported
×6
Memory chips cost about six times what they did a year earlier.
04 Reported
Cars.
GM counts “higher DRAM costs” among a $1.5–2 billion headwind this year, rising in the second half. BYD raised the price of its driver-assistance package, citing memory.
Now.
The buyers furthest from AI were among the most exposed.
Inferred from the chain
- AThe squeeze holdsBeyond 2027, as Micron expects
- BAI spending pausesTwo to four quarters
- CCarmakers redesignUp to two years for each new part
A Future
The squeeze holds
- Lasts
- Beyond 2027, as Micron expects
- Watch
- GM’s third-quarter results, before the open
- Fourth-quarter contract prices: +10 to 15% projected
- Then
- Carmakers’ memory costs keep rising, and the makers of old chips gain.
- GMGeneral Motors
- FFord
- 2408.TWNanya
- 2344.TWWinbond
Alpha’s plan, on paper Medium risk
A paper position in the makers of old chips (2408.TW, 2344.TW).
At risk$5001% of $50,000, inside your $750 limit.
ExitClose it if DDR4 prices fall.
Sources 4
We now expect supply-demand conditions for both DRAM and NAND to remain tight beyond calendar 2027.
Micron · results call · 24 Jun 2026 (opens the source)GM reports third-quarter results before the market opens on Tuesday, Oct. 20, 2026.
Yahoo Finance · 30 Sep 2026 (opens the source)Conventional DRAM contract prices are projected to grow 10-15% QoQ in 4Q26.
TrendForce · 30 Sep 2026 (opens the source)Significant increases in DDR4 and DDR3 contract prices drove Nanya’s revenue up 68.3% QoQ”; Winbond’s rose 75.8%.
TrendForce · 7 Sep 2026 (opens the source)
B Future
AI spending pauses
- Lasts
- Two to four quarters
- Watch
- AI buyers cut their spending plans
- Contract prices fall two quarters running
- Then
- Memory can fall hard: more than 50% in a year, as in 2019.
- MUMicron
- 000660.KSSK hynix
- 005930.KSSamsung Electronics
Alpha’s plan, on paper Medium risk
A paper hedge on memory makers (MU, 000660.KS).
At risk$5001% of $50,000, inside your $750 limit.
WhenStarts only after the second falling quarter.
Sources 1
The massive drop-off in DRAM quotes in 2019 culminated in a total yearly decline of more than 50%.
TrendForce · 26 Aug 2020 (opens the source)
C Future
Carmakers redesign
- Lasts
- Up to two years for each new part
- Watch
- A carmaker qualifies newer memory or a new supplier
- Then
- The old chips lose their premium.
- 2408.TWNanya
- 2344.TWWinbond
Alpha’s plan, on paper Medium risk
Stay out.
At risk$0Nothing on paper.
WhyNo edge once it is in the price.
Sources 1
AEC-Q100 is “a certification process that can take up to two years and prevents automakers from quickly switching to untested supplies.
EE Times · 14 May 2026 (opens the source)
Hypothetical backtest; not investment advice; paper trading only.Past results, real or simulated, do not predict future ones. ARCANE places no live orders from this page.
Build a rule, test it on history
The page counts every tryBlocks
Or build it block by block
Weight blocks, If/Else conditions, filters that keep the best few, groups: the way Composer’s symphonies work, with ARCANE’s data inside the conditions. Backtest it, change a number, backtest again.
- If the Fed cut at the next meeting (Kalshi) is greater than 60
- then: Split equally across 2 blocks
- Hold TLT
- Hold QQQ
- Otherwise
- If the Fed hike at the next meeting (Kalshi) is greater than 60
- then: Split equally across 2 blocks
- Hold SHY
- Hold XLF
- Otherwise
- Hold SPY
Preset analyses
Each written down, with a sealed holdout, before it was testedNone of these passes ARCANE’s house backtest gate, and none beats simply holding its benchmark by more than luck explains. They are here as worked examples of the method, and as starting points.
Computed Oct 27, 2026 with prices to Sep 25, 2026. Prices come from Yahoo Finance. Closes are adjusted for dividends and splits, and a session still trading is never read as a close.
Geopolitics
Hormuz disruption tilt
About a fifth of the world’s oil passes the Strait of Hormuz. When the ships counted through it fall well below normal, supply risk is real, not a headline, and energy producers and gold have tended to cushion that kind of shock. The counts arrive weekly and few investors read them.
- A year
- +13.5%
- Sharpe
- 0.73
- Held out
- 0.79
- OverfittingNot enough to judge
- House gateCould not run
Geopolitics
Risk-off on sanctions escalation
Bursts of sanctions activity mark geopolitical escalation: new programmes, new designations, new export controls. When OFAC publishes far more than usual, step out of stocks into Treasuries and gold until the burst passes.
- A year
- +7.6%
- Sharpe
- 0.50
- Held out
- 0.42
- OverfittingLikely overfit
- House gateNot passed
Macro and prediction markets
Fed-cut rotation
Kalshi’s traders put a price on what the Fed does at its next meeting. When they make a cut likely, long Treasuries and growth stocks stand to gain most from lower rates; when they make a hike likely, short Treasuries and banks hold up better. The market for the meeting often moves before the rest of the market has finished adjusting.
- A year
- +15.5%
- Sharpe
- 1.08
- Held out
- 1.08
- OverfittingLikely overfit
- House gateNot passed
Climate
El Niño farm tilt
A strong El Niño shifts rain away from India, Southeast Asia and Australia, and harvests there tend to suffer. When NOAA’s index says the Pacific is strongly warm, put half the portfolio in farm commodities while it lasts.
- A year
- +9.7%
- Sharpe
- 0.58
- Held out
- 0.71
- OverfittingHolds up
- House gateNot passed
Classic rules
Trend filter: the 200-day line
The oldest rule in the book: own stocks while they trade above their 200-day average, and step into Treasuries when they fall below it. It gives up some upside in exchange for sidestepping most long bear markets.
- A year
- +8.2%
- Sharpe
- 0.71
- Held out
- 0.60
- OverfittingLikely overfit
- House gateNot passed
Classic rules
Dual momentum
Own whichever of US or international stocks has done better over the past year, but only if stocks as a whole beat cash; otherwise hold bonds. Relative momentum picks the leader, absolute momentum keeps you out of long bear markets.
- A year
- +8.7%
- Sharpe
- 0.61
- Held out
- 0.65
- OverfittingLikely overfit
- House gateNot passed
Classic rules
Overbought, oversold
The pattern behind many Composer community strategies, without the leverage: step aside when the Nasdaq-100 is very overbought, buy it when it has been sold hard, and otherwise follow the trend.
- A year
- +13.4%
- Sharpe
- 0.81
- Held out
- 0.79
- OverfittingLikely overfit
- House gateNot passed
How ARCANE tests a strategy
Hypothetical results; paper only- 01
No peeking
A decision reads closing prices and ARCANE data only up to that day, and trades at the next day’s close. Composer’s convention, deciding and trading on the same close, is there to compare with and marked optimistic.
- 02
Costs
Slippage on every trade (5 basis points unless you change it) and US regulatory fees on sales. Cash earns nothing.
- 03
Held out
The last part of the history is reported on its own. It stays out of sample only until the symphony is changed after seeing it.
- 04
Every try counts
Each backtest of an idea raises the bar the next one must clear (the deflated Sharpe ratio), and each result is checked against its own numbers nudged either way (the probability of backtest overfitting).
- 05
Written down first
A strategy enters ARCANE’s house book only with a pre-registration: its claim, why the edge should exist, who pays for it, and what stops it.
- 06
Paper only
The builder never places a live order, and neither does Alpha.
The strategy library: eight trades hedge funds run, the paper behind each, and the open Calls filed under them.
What ARCANE adds to the blocks
Each value dated the day it became public| Data | For example | History |
|---|---|---|
| Chokepoints (56 series) | Panama transits vs normal: Ships through Panama a day, last 7 days, as a percent above (+) or below (−) normal. −50 is half of normal traffic. | revised history |
| Sanctions and export controls (8 series) | OFAC actions, last 7 days: Rules and notices from Treasury’s Office of Foreign Assets Control (sanctions) published in the Federal Register in the last 7 days. | point in time |
| Prediction markets (2 series) | Fed cut at the next meeting (Kalshi): The market’s probability, in percent, that the Federal Reserve cuts rates at its next meeting: Kalshi’s cut contracts added up, at the end of the previous day. | point in time |
| Climate (ENSO) (2 series) | Oceanic Niño Index: The latest three-month sea-temperature anomaly in the central Pacific, in °C. +0.5 and above is El Niño territory, −0.5 and below La Niña. | revised history |
| Earthquakes and storms (6 series) | M6+ earthquakes, last 7 days: Earthquakes of magnitude 6 or more worldwide in the last 7 days. | revised history |
| ARCANE Calls (2 series) | ARCANE Calls open: How many of ARCANE’s public, dated Calls are waiting to resolve. | point in time |
“Revised history” means the source corrects its past figures, so a backtest sees slightly better data than a trader had on the day. Nothing is filled in where a source has no history.