After a significant increase in volume yesterday, the market took a hit today. Everyone expected the upward trend to continue, but the market surprised us. This situation is quite normal; no one can accurately predict future trends, and the stock market is chaotic in the short term.
Have you noticed a problem? In recent days, while the financial sector has cooled down, sectors like semiconductors, communications, and CPOs have remained strong, with significant divergence. Only a few stocks are continuously rising. This kind of movement is a method of trapping investors at high levels. Retail investors tend to pick high-performing stocks and hot stocks because most people want to make quick money, and some newcomers don’t know how to select stocks, so they buy whatever is popular online. Participating in stocks that have already surged is just waiting to be trapped, right? Therefore, stocks that have continuously risen recently, especially those that are widely discussed, should be avoided during market corrections.
I believe the safest approach right now is to invest in the financial sector. I’m talking about a medium to long-term strategy because the financial sector has undergone enough adjustments to be considered safe. After this adjustment, it is likely to experience a significant rally after a period of sideways movement. The only issue is that it may take a long time, which many quick-profit seekers dislike, but it is safe. Preserving capital is the key to survival in the stock market.
If you want to engage in short-term trading, focus on technology stocks, as I have mentioned many times. Currently, there are many stocks in the market that are consolidating and have not yet started to move. In a bull market, most stocks will eventually start moving; it’s just a matter of time.
Finally, I want to emphasize that if you are just an ordinary retail investor, do not touch those hot stocks mentioned above, such as Hanwang, Haiwang, Industrial, Cambridge, etc. In this game of passing the buck, how can we defeat those who are orchestrating the game?