In-Depth Analysis of Market Fluctuations
Yesterday, the market opened significantly lower due to external influences but rallied throughout the day without any selling pressure. After the bidding yesterday, the volume decreased continuously, and there was no selling pressure at any point, leading to a rebound without volume; there was no panic selling and not much buying energy. Today’s standard expectation is for a divergence in actions, and it won’t be stronger than before.
Last night, the external market surged, and relations eased. After opening today, technology stocks opened significantly higher, but the market’s buying capacity is insufficient, and there is no return flow in divergence, which is abnormal.
Two Major Anomalies Raise Concerns
Yesterday was very strong, but today is cold; this is a two-tier situation, with emotions fluctuating from heaven to earth, which is quite unusual. There are several rumors regarding the timing and underlying factors:
Yesterday, the market restricted institutional trading, with window guidance. This explains why there was no panic selling yesterday despite significant negative news. Today, with the restrictions lifted, institutions sold throughout the day without any resistance, which aligns well with market behavior, indicating a two-tier situation. The possibility of a reversal here is quite high;
Another strange phenomenon is that institutions are selling while banks are supporting the market. The external market should have digested the negative news with a strong rally, as if it was pre-arranged. These past two days have not been very normal.
At this stage, all technology stocks are declining uniformly, with a continuous downward trend and no rebound actions, which is quite alarming. The selling volume is one-sided, with upward movements on low volume and downward movements on high volume, indicating panic selling, particularly in technology stocks.
Key Support Levels and Emotional Observations
There is a phenomenon in the market that needs to be highlighted—local banks are still stabilizing the market, and the index should not have any issues. If there were problems, they wouldn’t maintain it. If the restrictions on institutional trading were real yesterday, it was also to protect the index, which has not faced significant issues.
Emotional Aspect—The next important point is:
The emotional aspect has been significantly impacted. From September 5 to now, the core of technology storage, represented by De Ming, is the most critical. The institutional camp consists of SMIC and Huahong, which can still hold steady and have not completely collapsed. Huahong is still at the 5-day moving average, and SMIC is at the 20-day moving average. The remaining heavyweight stocks, such as Ning Wang and Yi Zhong Tian, have all broken down, indicating panic within the institutional camp, with some questions still lingering in the semiconductor sector.
If De Ming breaks the 10-day moving average, it will signal a retreat in short-term emotions. If the institutional camp does not retreat, the emotional aspect will retreat. If institutions also stop working, stocks like Yi Zhong Tian and Sheng Hong have already broken down, and if Huahong and SMIC also break down, a full retreat will not just last 1-2 days. The first ice point could allow for a rebound, but subsequent warming will be torturous, and there will be no seamless transition. Seamless transitions occur during each stage of an upward trend’s correction; if this situation arises, the entire phase will need to rest. Therefore, SMIC and Huahong must make a statement; if they do not, it will be problematic. If technology faces issues, the N market will be lost. When technology retreats across the board, no sector stands out, and the public’s psychological position is deeply rooted. Relying on banks and securities is not feasible, and the local market will not allow technology to fail. Tomorrow, SMIC and Huahong must make a statement; if they lead to a stampede among institutions, the problem will be severe.
Operational Strategies and Key Targets
Currently, the situation is characterized by emotional fluctuations, with local banks still supporting the market and no extreme volume; the overall direction remains unchanged. Institutions need to show performance tomorrow, or the final institutional anchor will face issues.
Emotions are affected, and the varieties represented by De Ming will undergo a process of supplementary decline. The supplementary decline will involve the batch from September 5; do not attempt to catch this batch. Additionally, be cautious with the mid-range stocks post-September 5, and try to minimize participation. Look for new opportunities at low levels. The best time for supplementary declines is not to seek low-level rebounds; leading stocks will experience 1-2 days of negative feedback, which can vary in magnitude. The index does not face significant issues, and the negative feedback will not be large.
De Ming will also exhibit negative feedback; consider the following observation points:
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Will high-level stocks from the same batch experience a breakthrough?
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Will a mid-range stock emerge?
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Avoid digging at low levels; low levels involve three rounds, such as Zhi Chun, with the first round being De Ming, the second round being Hefei Tongfu Shenzhen, and the third round involving high-low cuts that are easily A.
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And external cuts; observe if there are external themes, such as diamonds, which represent low-altitude themes. These themes struggle to carry technology funds and are all subpar; there is nothing worthwhile to observe. Minimize attention to these.
If there is a complete retreat, then rest. If the market retreats, there is still a market value of 20 trillion; at worst, wait a few days. Do not look at external cuts; focus on internal breakthrough situations.
Focus on the Semiconductor Sector
The market can only emerge from the semiconductor sector. From September 5 to now, it has been a gamble on semiconductors, and this phase is not completely over; it remains the focus. Emotions have retreated, but if institutions do not retreat, a 2-3 day adjustment will conclude. A complete retreat of 20 trillion is almost unrealistic. The key now is that we have not reached a peak; a complete retreat is nearly impossible. The most likely scenario is a 1-2 day emotional retreat, with institutions stabilizing and then selecting a new batch, with the focus still on internal selections within the semiconductor sector. Short-term emotional declines should be avoided for 1-2 days; do not panic excessively.
The high-level batch from September 5, with De Ming as the core, will experience a core supplementary decline; do not touch stocks from the same batch, such as Jiang Bo and Xiang Neng, and do not participate. Only De Ming will experience a retreat and rebound.
The retreat and rebound, starting today, will last for 2-3 days, at most until the day after tomorrow. The retreat and rebound depend on the leading identity and have no issues with themes; even if semiconductors do not rise, we can still gamble on the retreat and rebound, with larger leaders being more accurate.
Key for Tomorrow: Keep a close eye on SMIC and Huahong’s statements, prevent the spread of emotional retreat, and search for breakthrough varieties within the semiconductor sector.
This article is based on publicly available market information and is for reference only; it does not constitute investment advice.