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A-shares experienced a rise and then a retreat today, but the market left us with a lot of useful information that will affect the trend of A-shares tomorrow and this week. I hope this can attract the attention of my fans. The trend of A-shares today was somewhat unusual, and it also indicated what the trend of A-shares will be like tomorrow. Let me share a few personal opinions with you.
Firstly, today's rebound was a technical rebound, not a reversal, and certainly not a second significant rise.
1. There has been a lot of discussion in the market recently, suggesting that the trend since October 8th has been a process of "washing the market." I disagree with this view because:
- In a typical market trend, the decline during a wash is limited. However, the decline in the three major A-share indices is substantial.
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- The ChiNext index stopped at a 20% drop yesterday, the average stock price index of A-shares fell by 18%, and the broad market index fell by 13%. These declines are far beyond the typical range of a market wash. Generally speaking, a market wash is characterized by significant fluctuations, but this time it was a significant decline.
- A drop of more than 10% can generally change the direction of the market trend. As for a market wash, the decline is usually controlled within 3-6%. Looking at the decline in A-shares, it has already far exceeded this standard, which is a sign of the end of a market trend.
- The main purpose of a market wash is to acquire as many low-priced shares as possible. However, we observed that last week, over four trading days, A-share mainline funds had a net outflow of nearly 600 billion yuan, indicating that mainline funds were fleeing.
2. Why do I say that today's rebound was a technical rebound?
- Firstly, through the rapid rise in the early stage, the technical indicators of the three major A-share indices have been severely blunted. The sharp decline last week did not fully repair these blunted indicators, but the market cannot continue to decline indefinitely, so a rebound was necessary.Today's rebound encountered resistance from the 5-day moving average, which is basically in line with my forecast in yesterday's and noon articles. The forecast in the noon article was: Today's A-share market is a rebound trend, mainly to repair the oversold condition of the 60-minute trend, with the target area near the gap on Friday, around 3297 points. If it cannot be achieved today, it will continue tomorrow. This is mainly due to the current trading volume level, which can still maintain market activity, and the main funds are still quite active.
Thirdly, there is no significant increase in trading volume.
This indicates that today's A-share trend is still dominated by the main funds, which suggests that the unloading is not very ideal. As a general rise in nearly 4800 stocks, this trading volume is not enough to watch, indicating that outside funds are on the sidelines, with a weak willingness to chase high. It depends on how the main funds perform, whether they continue to pull up or turn around to suppress?
Secondly, what is the most likely trend for this week's A-share market?
Looking at the current A-share and FTSE A50 futures trends, because their trends are basically the same and are interrelated, this is the inevitable trend of major indicators. We retail investors should observe more the trends of the Shenzhen Composite Index and the ChiNext Index, as these are the comprehensive trends of small and medium-sized stocks.
With the continuous contraction of trading volume, it is highly unlikely for the A-share market to continue the grand upward trend of the previous period. So, what will the A-share market do next?
My personal judgment is that the A-share market will fluctuate within a certain range, which is roughly between 3200-3400 points. Because the 3400 point pressure was not occupied twice last year, it is also difficult to be conquered by this wave of impact this year. After recovering 3400 points, there is still the heavy pressure area of 3600 points, which is a later topic.
Strictly speaking, it fluctuates between 3200-3300 points. After entering above 3300 points, everyone should pay attention to reducing positions on high, waiting for a pullback.
Therefore, the most likely trend this week is a horizontal fluctuation. During this period, public opinion will continuously tease outside funds. During this period, pay attention to the trend of the securities index. The short-term adjustment of this index has not been completed. In order to rebound today, the main force had to pull up the index that was being adjusted, in order to protect the unloading of heavy positions in banks and social security insurance.Thirdly, today's rebound seems a bit off. It was done reluctantly, just to pull up the index for the sake of it. How will the A-share market perform tomorrow? My personal judgment is that it will be a pattern of rising slightly and then falling slightly. This is because:
Firstly, today's rebound has essentially been completed. The A-share market reached a high of around 3294 points today, just a stone's throw away from the 3297 points I mentioned in my midday article. It can be said that the 60-minute level rebound has been relatively perfectly completed. Tomorrow, it just lacks a slight rise to 3300 points. Therefore, the market will attempt to reach this level in the morning, then continue to fluctuate, and end the day with a slight drop.
Secondly, the major players once again brought out their signature skills to manipulate the market today. It seems that the current A-share market has returned to a situation dominated by major players in banks, oil, etc., which is a clear sign of something being amiss.
From today's A-share trend, it is not difficult to see that playing with the closing price of the afternoon session and sneak attacks at the end of the market were both employed today. This is a sign of being forced, as the funds to take over are not active. The retail investors who are preparing to enter the market are also waiting and watching. The major players must be very anxious inside, and they can only bring out their signature skills to perform acrobatics and hold up the big top for the funds outside the market.
Thirdly, the trading volume indicates that it is still a one-man show for the major players inside the market.
Today, the social security heavy positions rose by 2.41%, insurance heavy positions by 2.53%, banks by 3.27%, China-headquartered companies by 2.9%, CATL by 3.28%, and pension fund holdings by 2.27%. Why is this? It is to bring the index down, and when everyone thinks it is a low position and some people say the washing is over, they deliberately push up these varieties to attract attention and find people to take over the positions. However, retail investors seem not to buy it.
Tomorrow, there will only be a slight rise, then a callback, otherwise, it would be meaningless to spend money to pull it up without any applause. Then I will give you a lower point again to see if you will buy.
In summary, the A-share market is about to enter a stage of horizontal fluctuation. We retail investors can ignore the major index stocks and focus on the stocks in our hands, selling high and buying low. In this fluctuating stage, we can make short-term profits regardless of whether it is a bull market, bear market, or pig market, as long as we grasp the rhythm.Please provide the text you would like me to translate into English.