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While I did use Gemini to format this story, I did my own research—like total Treasury holdings of the top three countries—and added in BRICS and the total DXY drop.

Recent reports suggest that Chinese financial regulators are advising domestic banks to curb new purchases of U.S. Treasuries and reduce existing high-exposure holdings due to concentration risk and market volatility. However, this is not a direct order for mass liquidation and applies specifically to commercial banks, not central reserves.

As of late 2025, China remains the third-largest foreign holder of U.S. debt with $682.6 billion, trailing the United Kingdom’s $888.5 billion and Japan’s leading $1.20 trillion. Together, these three nations hold approximately $2.77 trillion in U.S. Treasury securities, highlighting their significant role in the global financial system and the continued—though evolving—status of U.S. assets as a global safe haven.

In this shifting landscape, the BRICS alliance is also exploring alternatives to the U.S. dollar, such as the “Unit”—a digital settlement system backed by gold and a basket of member currencies like the Chinese renminbi (yuan)—to facilitate cross-border trade among its members.

While some reports suggest that up to 185 countries have shown interest in or have the ability to access BRICS-linked payment systems, the formal “BRICS currency” architecture (The Unit) is specifically operational for the 11 core member nations for international trade settlements as of January 2026.

This movement is driven by a staggering surge in global interest, with 185 countries expressing interest—including 23 nations that have formally submitted membership applications and another 28 expressing informal interest. This clearly signals a major shift toward a multipolar financial system.

I have said this many times: China could use the liquidation of U.S. Treasuries as a financial weapon—and that’s what this looks like to me. While U.S. debt continues spiraling and over 185 countries are taking an interest in BRICS, the shift is clear.

At its high, China’s holdings of U.S. Treasury securities reached an all-time peak of $1.3167 trillion in November 2013. That’s a drop of $682.6 billion, or a decline of 48%, reflecting a decade-long trend of China scaling back its exposure to U.S. sovereign debt.

I’ve said for a long time that China could use this as a financial weapon against the U.S. financial system—at a time of rising U.S. debt—by using the dollar to purchase gold as a hedge, promoting the Chinese yuan, and encouraging other countries to support BRICS.

Like I’ve always said: I’m not smart enough to figure all this out, but all you have to do is look at the DXY (Dollar Index). It fell to a one-week low on Monday and finished down -0.83%. That’s down 1.03% in the last five days and down 2.56% YTD, on top of the 10% drop last year.

Goldman Sachs’ Panic Index Trading Desk Note

Goldman Sachs’ trading desk issued a client note warning of potential renewed selling pressure in US equities this week, even after Friday’s rally. They highlight:

• Their proprietary Panic Index (a shorter-term volatility-based fear gauge) has spiked to near “max fear” levels—reported around 9.22 on a 0-10 scale.

• The index aggregates options market signals, including 1-month S&P 500 implied volatility, VIX volatility-of-volatility, put-call skew (demand for downside protection), and the term structure slope (1-month vs. 3-month vol).

• High readings reflect investors paying extreme premiums for hedges, often seen in stressed or capitulation phases.

Potential Selling Pressure

Estimates suggest up to $33 billion in forced selling from systematic funds (commodity trading advisors/CTAs, volatility-targeting funds, risk-parity strategies) this week, regardless of direction in some cases.

Triggers for Larger De-Risking

A drop in the S&P 500 below key levels (one referenced threshold around 6,707) could trigger an additional $80 billion in sales over the coming month.

Contributing Factors

Market liquidity has deteriorated sharply, amplifying swings.

The desk’s blunt advice: “Buckle up.”

Balanced Context

This is a cautious, near-term view from Goldman’s global markets trading team amid recent choppiness (implied selloffs followed by rebounds). Extreme fear readings like this have historically often marked short-term exhaustion points or contrarian buying opportunities—some traders note oversold conditions in software stocks and crypto as potential fuel for a rebound before any larger pullback.

SPX: Wyckoff Distribution Risk Between 7000 and 6600 : @Manny_trends

SPX has spent enough time near the highs to make both bulls and bears feel a little too sure of themselves. When that happens, I start asking a different question: are we trending, or are we transferring inventory?

I’m framing today with a simple range:
Range High: 7000
Range Low: 6600

7000 is the ceiling until proven otherwise. 6600 is the floor that tells us whether this is still balance, or the start of markdown.

This is not a prediction. It’s a risk framework and a way to stay objective.

Why Wyckoff Distribution Is On My Radar

1) The trend stopped acting like a trend
After a strong run, the market usually changes character before it breaks. We have seen that shift. Upside progress has become labored, and the downside has started to show urgency. That is typical of late-stage action where supply becomes more active.

2) Phase B churn: lots of motion, little progress
If you zoom out, the price action under 7000 has the feel of a distribution range. More swings, more false starts, and less clean follow-through. In Wyckoff terms, Phase B is where opinions get expensive, and patience gets paid.

3) Upthrust behavior near 7000
The classic trap is simple: push above resistance, trigger breakout buyers, then fail back into the range. That upthrust behavior has shown up near the highs. The important part is not the push itself. It’s whether price can accept and hold above 7000. So far, acceptance has been the problem.

The Key Question: Phase C (UTAD) or Phase D?

Here is how I’m separating the two using 7000 and 6600.

If this is still Phase C (UTAD still playing out)
I keep it as Phase C if:

Phase C is messy, but not yet directional. The market is still running tests and traps.

What confirms Phase D has started
Phase D starts when weakness becomes repeatable. I look for:

My read right now: late Phase C transitioning into early Phase D.
We have already seen the upthrust type behavior near 7000, and the selloff that followed was not a polite pullback. That makes the current bounce the tell. If rallies keep failing below 7000 and we rotate back toward 6600, Phase D becomes the higher probability. If we regain acceptance near 7000 and hold, the distribution thesis weakens, and this reverts to balance.

Game Plan

Bull path

Bear path

What would change my mind

Until then, I’m treating 7000 as supply and letting 6600 decide whether this is balance or the start of something heavier. In a distribution range, the market pays traders for patience and charges rent for opinions.

You can follow Manny on X or join him in the free PIT trading room on Tuesdays and Wednesdays on the open;

DLC Risk: Monthly Update: Feb 2026 Newsletter 

Market Recap

After a smashing rally on Friday, the ES traded up to 6979.75 on Globex and opened Monday’s regular session at 6935.50. After the open, the ES sold off down to 6924.25, then rallied up to 6957.75, pulled back to 6938.50, and rallied again to 6987.75 at 11:00. It did a small back-and-fill down to 6982.00, rallied again to 6982.00 at 12:10, sold off down to 6984.75 at 1:00, rallied to a higher high at 6998.00 at 12:10, pulled back to 6984.75, upticked to a lower high at 6991.75, sold off down to 6977.00 at 1:20, rallied up to 6993.75, dropped down to a 6986.50 double bottom at 2:00, rallied back up to a new high at 7000.50 at 2:25, sold off down to 6980.00 at 3:35, and rallied up to 6990.00 at 3:45.

The ES traded 6989.50 as the 3:50 cash imbalance showed $2.2 billion to sell, then traded 6980.24 on the 4:00 cash close. After 4:00, ES rallied up to 6986.75, flatlined, and settled at 6983.25, up 30.50 points or +0.45%. The NQ settled at 25,354.00, up 190.75 points or +0.76%. The YM settled at 50,219 +0.03%, and the RTY settled at 2714.80, up 18.40 points or +0.68% on the day.

In the end, both the ES and NQ marched higher, but the strength in the RTY (small caps) outpaced the rest of the markets.

In terms of the ES’s overall tone, it was straight up after the open and a “buy the pullbacks” day until late, when the imbalance showed up for sale. In terms of the ES’s overall trade, volume was low at 1.14 million contracts traded.

Tuesday, Feb 10

Earnings:
Coca-Cola (KO) – Pre-market

Economic Data:

U.S. bond yields experienced early volatility yesterday—first rising on concerns over Chinese regulators scaling back U.S. debt holdings, before retreating after dovish labor market outlooks from National Economic Council Director Hassett.

After yesterday’s news, I think traders are now pivoting toward a heavy week of data, with expectations for a 0.8% rise in the Q4 Employment Cost Index, steady retail sales growth, and a January nonfarm payroll increase of 69,000 alongside a 4.4% unemployment rate.

While high-stakes inflation data and housing reports loom later in the week, strong corporate performance remains a tailwind, with S&P 500 earnings projected to grow by 8.4% as 79% of reporting companies exceed estimates.

Despite these positive earnings trends, the market currently sees only a 19% chance of a rate cut at the upcoming March policy meeting.

MiM

Market-on-Close Recap – MiM

The Market-on-Close auction opened decisively sell-skewed and stayed that way for most of the final ten minutes, signaling persistent institutional distribution rather than late-day noise. Early snapshots around 15:51 showed net imbalances already beyond -$2.1B, with sell pressure consistently outpacing buy programs by a wide margin. This tone carried through nearly the entire auction window before a late Nasdaq-led offset softened the aggregate print into the close.

Sector flows made the message clear. Financial Services was the dominant source of supply, posting nearly -$891M with an extreme -88.7% lean, a textbook wholesale sell. Industrials (-$412.8M, -81.2%) and Consumer Cyclical (-$312.5M, -73.8%) reinforced the risk-off posture. Healthcare (-$281.7M, -67.2%) and Real Estate (-$141.5M, -85.8%) added further weight. These are not rotational numbers—leans well beyond -66% point to broad, programmatic selling rather than sector reshuffling.

Technology was notable for a different reason. While it closed net negative (-$65.9M), the percent lean near -52% suggests rotation inside the sector rather than outright liquidation. That internal churn showed up at the symbol level: NVDA, MSFT, AVGO, AMD, and AAPL all traded heavy dollar volumes on both sides of the tape. Financials saw similar concentration, with JPM and MA among the largest single-name contributors to sell pressure.

The counterbalance came from Communication Services, the lone sector with a strong buy lean (+82.2%) and a +$254.8M total, driven by large inflows into GOOGL, GOOG, and META. That bid helped stabilize the tape late, alongside a decisive Nasdaq imbalance flip. By 16:00, Nasdaq closed with a +$284.8M net buy and a +56% lean, contrasting sharply with NYSE (-$2.4B, -78.7%) and the S&P 500 (-$2.1B, -67.2%).

Bottom line: this was a sell-dominant MOC defined by financial and industrial liquidation, partially offset by targeted tech and communication buying. The magnitude and breadth of negative leans argue for institutional de-risking rather than simple end-of-day rotation.

Technical Edge 

Fair Values for February 10, 2026:

Daily Market Recap 📊

For Monday, February 10, 2026

• NYSE Breadth: 55% Upside Volume
• Nasdaq Breadth: 67% Upside Volume
• Total Breadth: 65% Upside Volume
• NYSE Advance/Decline: 59% Advance
• Nasdaq Advance/Decline: 60% Advance
• Total Advance/Decline: 59% Advance
• NYSE New Highs/New Lows: 297 / 63
• Nasdaq New Highs/New Lows: 384 / 164
• NYSE TRIN: 1.12
• Nasdaq TRIN: 0.72

Weekly Breadth Data  📈

For Week Ending Friday, February 6, 2026

• NYSE Breadth: 55% Upside Volume
• Nasdaq Breadth: 49% Upside Volume
• Total Breadth: 51% Upside Volume
• NYSE Advance/Decline: 61% Advance
• Nasdaq Advance/Decline: 44% Advance
• Total Advance/Decline: 50% Advance
• NYSE New Highs/New Lows: 548 / 184
• Nasdaq New Highs/New Lows: 678 / 809
• NYSE TRIN: 1.27
• Nasdaq TRIN: 0.81

Calendars

Economic Calendar

Today

Important Upcoming

Earnings

Recent

Full Calendar

Trading Room Summaries

Discovery Trading Group Room Preview – Tuesday, February 10, 2026

Market Focus
Investors are watching corporate earnings and Retail Sales data closely. After the Dow’s recent record high, U.S. equity futures are eyeing new all-time highs. Tech stocks rebounded Monday, signaling renewed strength in the AI trade.

Key Themes

Corporate Watch

Economic Calendar

Futures Technicals

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Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.

Remember: Not all setups will trigger. Not all setups will be profitable. Not all setups should be taken. These are simply the setups that I have put together for years on my own and what I watch as part of my own “game plan” coming into each day. Good luck!