Friends, there is too much after-hours news on Tuesday, especially bearish news, which is completely different from the close of the market a few days ago, what does this mean?
It shows that the negative chain reaction caused by the decline in the market has begun to appear, and some negative feedback may not be hidden.
The market fell a few days ago, and there was some good news after the market to boost everyone's confidence. And after Tuesday's market further stage of new lows, the negative news is undisguised, is there really an institution that can't stand it? Five aspects of the explanation:
First, it is rumored that JPMorgan Chase is bearish on A-shares to 2398 points, although JPMorgan Chase refutes the rumors, but the retail investors do not believe it at all, because the rumors in the A-share market in those years were basically confirmed in the end.
In fact, the biggest problem now is not that foreign capital is bearish, but that domestic institutions are really short.
Foreign-funded institutions may issue some cautious or even pessimistic reports, but most of the domestic institutions make bullish remarks, but they take out real money to short the market, and tens of billions of funds flow out every day, which is the most difficult to control.
Second, it is said that the institutions have collectively blown up, especially the institutions of the GF system, which have a heavy position in photovoltaic and thalis, and the fund managed by Songsong has suffered heavy losses.
Every time the market plummets, the news of institutional liquidation is indispensable, and now the market is below 3,000 points, such news has appeared again, and it is difficult for shareholders not to believe it.
Recently, the photovoltaic sector has fallen sharply, it is said that the institutional heavy position photovoltaic has begun to passively reduce its position again, and the 100 billion market value of Thalys was directly smashed to the limit, and the northbound funds were sold more than 400 million after the market, and the domestic heavy institutions are also mainly sold, which shows that there are indeed institutions shorting.
Let's not talk about the truth or falsehood of the "small composition", now I am more worried about continuing to fall, the people have redeemed the funds they hold, and the institutions in order to cope with the pressure of the redemption of the people, passively reduce their positions to deal with the liquidity crisis, is it another big impact on the market?
The answer is certain, because this is actually a negative feedback loop, the people are worried about the loss of the redemption fund, the institution can only sell in order to deal with the redemption, the stock is smashed, the shareholders will also increase the loss, and finally the shareholders also panic and leave, this is an unsolvable cycle.
And what can make this cycle end is to force the short to rise and prohibit short selling. Only when the market is forced to short, so that the short-selling funds will stop, and everyone will hold shares and stabilize when they rise, and the people who hold the base will not redeem them, and the institutions will have no pressure.
Third, how does the concern about the risk of snowball knock-in affect the A-share market?
The main reason is that the risk of snowball knocking into the liquidation has a great impact on the market, and then although it is required to limit the size of the snowball, the current snowball product stock is still more than 200 billion, and this year has added about 50 billion, how will this affect the A-share market?
Many people don't understand what snowball knock-in and knock-out mean, simply put, knock-in is actually a protective price, if the underlying falls below this knock-in price, then investors have the opportunity to bear losses; Conversely, if the underlying price rises beyond this knock-out price, then the investor will make money, just like winning the lottery.
Seeing this, everyone should understand that if the market continues to fall, then it will trigger the risk of knock-in, and if it does not fall again, it may lose the principal, which is why after each big fall, everyone is worried about the risk of snowball knock-in.
Will snowball products cause greater volatility in the market?
Brokers know this best, because brokerages continue to buy and sell stock index futures in order to hedge their exposure to snowball products, which will lead to large market fluctuations.
At present, most of the snowballs have been knocked in, and what we should worry about after that may be the risk of knocking out, isn't the knockout going up? That's right, because the market is rising rapidly, if the snowball is knocked out, investors will get their funds back at the end of the product, and brokerages need to sell a lot of stock index futures, and the market will still be under pressure.
Therefore, whether this product is knocked in or knocked out, the key is that the brokerage will continue to buy and sell stock index futures for hedging, is this considered a kind of market manipulation?
Although the scale of the brokerage snowball product is limited, there are still new additions during the year, and there is still a stock that has not been eliminated, and the brokerage may also use stock index futures to cause large fluctuations in the market.
In general, judging from the above three major news, each of them has a significant impact on the A-share market, because these cover factors such as sentiment, capital, leverage, etc., and once the risk breaks out, it is relatively difficult to control.
Fourth, there is also an latest news after the market that has attracted attention, and the Financial Stability Law has the latest provisions:
The picture comes from the Financial Associated Press
The Financial Stability Law has been updated in terms of strengthening supervision and anticipation of risks, as well as the division of responsibilities.
On the one hand, all financial activities are subject to supervision; On the other hand, there are systems for risk prevention, monitoring, identification and early warning; Finally, financial responsibilities are clearly in place.
With the improvement of the second draft, it means that the Financial Stability Law may be introduced soon, but looking at the performance of the market today, the word stability has become the next key.
What investors are most concerned about now is how to pass the Financial Stability Law to further punish and shut down short-selling behaviors such as securities lending, quantification and refinancing.
Fifth, for the market on Wednesday, how to go?
(1) First of all, all kinds of negative news after the market, it is likely to be a signal released by the bears for shorting, and now when the mood is the most unstable, the more negative news, the more conducive to the short short harvest stockholders.
(2) Secondly, more than 20 companies announced buybacks or increased holdings tonight, which has been happening for many days, which is likely to be guided by the window, which is the same as a team continuously buying CSI 300 ETF to protect the disk.
(3) Finally, with the concentration of negative factors, Wednesday is likely to be in the intraday to a rapid decline cash, sharp fall and sharp rise may appear on Wednesday, Wednesday bottoming out is a high probability, if it will open too low, that day K may also pull out of the positive line.
Now it is the shareholders who cut the meat, the institutions are liquidated, the brokerages are pessimistic, the funds are cautious, everything is so bad, but it may suddenly be reversed, so it is better to choose to lie flat, only to persevere.
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