At the morning of Tuesday, the A-share market was able to continue the trend of the past two trading days and continue to rise. However, the situation suddenly changed in the afternoon, and the A50 index was the first to plunge, and multiple indexes collectively fell. Among them, the ChiNext Index fell the most, with an intraday drop of more than 3%, followed by the Science and Technology Innovation 50.
So, what happened on Tuesday afternoon that made the nerves of the entire market tense again? Will the short-term rebound since last Friday end here? How will the medium-term trend of the entire market evolve?
Last week, the A-share market had broken the unilateral upward trend in the past few months, which means that our operational difficulty will increase significantly in the next period of time. In recent days, the A-share market has turned into a sideways fluctuation structure. From the perspective of technical forms alone, no direction choice is made, whether it is a short-term trend or a medium-term trend.
In a state of volatile conditions, rising and falling are normal. Just as today's market trend is concerned, the increase in the afternoon decline is related to several reasons:
First, after continuous general rises and rebounds, market differentiation will inevitably intensify! Last Tuesday to Thursday, the A-share market fell on a large scale for three consecutive days. As individual stocks generally fell a large scale, there was a large scale rise on Friday. After the continuous rebound of general rises and rebounds last Friday and this Monday, the differentiation of individual stocks has increased today, and a general fall of 4,000 stocks has occurred. This is like the general trend of the world. If you divide it for a long time, you will be separated for a long time.
From the experience of Jingyang, as long as it is not a very extreme market, the rotation of general rises and general falls is still relatively regular. It is also because of this that we can judge whether the market conditions in the next few days have a profitable effect by observing the rise and fall ratio of individual stocks in the Shanghai and Shenzhen stock markets. If there is a large-scale sell-off for several consecutive days, there will definitely be a general rise and recovery. This tells us that when the market adjusts continuously, there is no need to panic too much, and be prepared to buy at the bottom of the position. On the contrary, you must be prepared to reduce your positions.
A friend may ask, if we encounter a situation where the rise and fall is halfway, how should we judge the money-making effect in the next few days?
At this time, we might as well extend the time period a little to see what the ratio of the rise and fall in the previous few days is like? If the previous few days have been a general decline, then after the rise and fall remain unchanged for a few days, there will be a general rise. On the contrary, it is a general decline.
Secondly, technology blue chips are in a period of low tide, which has brought continuous pressure to the entire market. A week ago, many retail investors believed that institutions gathered together with technology blue chips, which is a hallmark feature of the bull market. As long as the bull market does not end, technology blue chips can soar. However, Jingyang has reminded everyone many times recently that although the CSRC has adjusted the performance appraisal cycle of public funds, the medium- and short-term operation ideas of public funds have long been deeply rooted. In this case, if we mistakenly regard the market's medium- and short-term style as the norm, we will definitely suffer a loss.
As Yi Zhongtian falls from the altar, technology blue chips begin to collapse on a large scale. Today, SMIC's sharp fall in review was the main reason for dragging down technology stocks to fall again. This also tells us that no matter it is a bull market or a bear market, as long as it rises too much, it will fall, and no one can keep rising!
Third, beware of the siphon effect of Hong Kong stocks on A-shares! In many recent articles, Jingyang has mentioned to everyone that foreign capital once bought Chinese assets significantly in February this year. Between February and August, foreign capital was dormant. However, after mid-August, there are very obvious signs of foreign capital returning. This can be seen from the trend of the Nasdaq China Golden Dragon Index.
From August 20, the Nasdaq China Golden Dragon Index has broken through the 10-day line upwards, and has been slid upwards since then. Last night, the Nasdaq China Golden Dragon Index rose 2%, setting a new high in the past four months. By comparison, it can be seen that the recent performance of Chinese stocks listed in the US is significantly stronger than that of US stocks. So even without any transaction data support, we can still judge that foreign capital is buying Chinese assets during this period. Considering that foreign capital adjustments have a certain cyclical nature, if August 20 is used as the starting point for the foreign capital round of increase in positions, then Chinese stocks listed in the United States will have hope of continuing to strengthen in the next month.
It should be pointed out that foreign capital buys Chinese assets not only Chinese stocks, but also Hong Kong stocks and A-shares. However, there is no threshold for buying Hong Kong stocks, and the threshold for buying A-shares is even higher. Then there is a high probability that Hong Kong stocks will rise simultaneously with Chinese stocks listed in the near future.
When we reviewed the trends of Chinese stocks listed in February this year, the performance of Chinese stocks listed in the US, Hong Kong stocks and A-shares is significantly stronger than that of A-shares. This shows that when domestic institutions see foreign capital increase their positions, they will choose to embrace foreign capital and increase their positions in Hong Kong stocks through the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect. This has led to a situation where Hong Kong stocks siphon A-shares.
In view of this, Jingyang has only mentioned many times recently that in the short term, the performance of A-shares may be weaker than that of Hong Kong stocks. The Hang Seng Index of Hong Kong stocks hit a new high today, which basically confirmed Jingyang's judgment.
After figuring out the reasons why the entire market adjusted again today, let’s take a look at the medium- and short-term trends of the market.
Yesterday afternoon, "Two new main lines are about to come out! A-shares will usher in an important change node! Tomorrow's trend is extremely critical! In the article ", Jingyang has already talked to you about the medium- and short-term trends of the market.
In view of the possibility of increasing interest rate cuts in the Federal Reserve's September interest rate meeting, Jingyang appropriately adjusted last week's analysis. In Jingyang's view, the medium-term trend of the A-share market has turned into a high-level box oscillation structure. The difference is that the increase in the Fed's interest rate cut and the continued purchase of Chinese assets by foreign capital may raise the mid-term volatility center of A-shares.
But from the short-term trend, there are still changes. Last week, Jingyang believed that after the A-share market recovered its rebound on Friday, it will face obstacles near the 5-day line this week and then pull back again. Yesterday, the short-term judgment was appropriately raised, believing that the A-share market has a chance to break through the 10-day line and hit the pressure level last week. It turned around and fell next to the pressure platform last week.
It is precisely because of this that Jingyang said that today's trend is more critical. The market can break through upwards and stand firm in the 10-day line, and in the short term, there is a chance to hit the previous high and then weaken. If you turn directly around the 5-day line and pull back, the trend will be consistent with last week's analysis, and then it will enter the C-wave sell-off structure.
Looking back at today's trend, the main force's control of the market is extremely accurate. Today, the market's high end stopped near the 10-day line and did not effectively break through the 10-day line. The market's low pierced the 5-day line, but encountered support at the 20-day line, and the final decline narrowed and closed near the 5-day line. In other words, although the market's center of gravity has moved downward today, no direction choice has been made.
So in the next one or two days, we will continue to keep a close eye on the direction of the market. As long as the market falls below the 5-day line and goes down, it is necessary to lower its position again; if it breaks through the 10-day line and goes up, it can appropriately increase its position and reduce its position when it reaches the highest point last week.
Finally, Jingyang will talk about the issue of position configuration.
After the rebound last Friday and this Monday, some retail investors questioned that Jingyang always maintained a low position. This group of investors believes that the market's money-making effect has warmed up and that after the short-term risk alert has been lifted, the position of extremely low is too conservative. Of course, some retail investors believe that the entire market has not fallen thoroughly recently, and it is more risky to maintain a high position.
It is obvious that investors with heavy positions are more optimistic about the future market and believe that the market will change upward; investors with low positions or even short positions are bearish on the future market and believe that the market will change downward. Everyone’s judgment on the future market is the main reason that affects position. Of course, some of the positions are heavy because they are trapped.
In this regard, in Jingyang's opinion, it is difficult for most ordinary retail investors to accurately judge the later trend. Therefore, when facing greater uncertainty, we should not add too much subjective judgment, and try to avoid being exposed to high-risk situations.
A friend may say that if the market breaks upward, it will be too late to chase highs! But for most ordinary retail investors, it is actually very simple to increase their positions when holding coins. The difficulty is that when holding shares, you have the courage to decisively cut your position when encountering a sharp drop.
