Preamble:
The last trading day of the second quarter of 2024 for A-shares ended on Friday, and the trend of A-shares in this quarter once again broke everyone's expectations for the bull market, and the Shanghai Composite Index fell below 3,000 points twice this year, which made many investors miserable. However, the A-share market is basically consistent with my prediction in the article "2024 A-share Q2 Outlook: The Bear Market is Nearing the End, the Bull Market Has Not Yet Arrived" in the article "The Shanghai Composite Index is expected to be between 2860-3200, and the index is volatile in the second quarter", and the Shanghai Composite Index is running between 3174-2933 points in the second quarter, which is a large shock area that goes up first and then down.
Market research is the starting point of the trading system, so at the beginning of each quarter, it is necessary to make a forecast of the entire quarter, so as to facilitate the formulation of follow-up trading plans.
Looking back at the second quarter of 2024:
Shanghai Composite Index Q2 2024
Shenzhen Component Index Q2 2024
Q2 2024 Funding & Market Performance
A-shares were in a narrow range for most of the second quarter, and only a small part of the time went out of the direction, which can be clearly seen in combination with the dynamics of trading volume and capital volume. In April, the northbound direction was slightly stronger, the market was more active, and the overall trend was strong shocks. In May, due to the delay in breaking through the shock between 3100-3200, northbound funds began to weaken, market transactions began to weaken, the A-share market began to weaken from strong, and entered June to continue the weakness of May, the volume of energy continued to shrink, the northbound funds sold more than the buying strength, and the incremental funds slowed down. The major indices fluctuated and weakened, and finally the Shanghai Composite Index also fell below 3,000 points and bottomed out again.
After all, the total market value of A-shares has reached 72 trillion, and the lack of stable active funds will always check and balance the A-share market.
Outlook for the third quarter of 2024:
As a member of the cyclical school, I have always emphasized and firmly believed in the three major indicators of time, space, and quantity and energy, as can be seen from the many bull and bear markets since 05:
1. If the bull market rises more, the next bear market will fall more.
2. If the bull market rises fast, it lasts for a short time, and if it rises slowly, it lasts for a long time.
3. If the bear market falls fast, the bear market time is shorter, and if it falls slowly, the time is longer.
It can also be seen from these commonalities that the Shanghai Composite Index did not rise much in the ninth bull market, while the Shenzhen Component Index rose in the same way as the previous bull markets, and the overall bull market was extended due to the epidemic. Entering the ninth bear market, the same decline has been comparable to the increase, and even from the perspective of the bear market, the time period is not short.
Therefore, from the perspective of time and space, the possibility of a new bull market is increasing, and now the worst is the amount of energy, especially incremental funds, which can be seen from the amount of these months is not stable, and the amount of energy is sometimes strong and sometimes weak, which is quite different from the stable incremental funds of the bull market.
Shanghai Composite Index monthly K-line
Deep Component refers to a monthly candlestick
GEM refers to the monthly K-line
Science and technology 50 month K-line
Judging from the major important indicators, except for the Shanghai Composite Index, which is slightly stronger, other indices have been very weak. Judging from the monthly candlestick chart, it is not impossible to continue to test the previous low. However, I think the probability of the major A-share indices hitting a new low in the third quarter is low, after all, the national team has already had the experience of rescuing the market in the first quarter, and it will not fall below the previous low casually, otherwise the confidence that was hard built in January will be reversed.
On the whole, if there is no special bearishness, the Shanghai Composite Index should still remain between 2860-3200 in the third quarter, and the extreme point should also be between 2740-3200. The third quarter is a trend similar to the first quarter, and the third quarter will be a rare opportunity to buy low in the second half of the year. As for the fuse of the emergence of the bull market, it is not that there is not enough time or space, but that the amount of energy is not enough, and incremental funds and market confidence need more economic data and the Federal Reserve's interest rate cut as support, which will take time to grind, and it is estimated that the third quarter will not see the light until September at the earliest. Therefore, it is better to lower expectations and be prepared to be in a bear-bull chaos period (volatile market) for a long time.
Q3 Concerns:
1. In the semi-annual report in July, performance is the driving force to promote the market, and the semi-annual report will also be conducive to opportunities between industries
2. The domestic monthly economic data is released, can the PMI data in March continue to improve when it returns to above the 50 level? Can the real estate move improve in the second quarter? It's worth paying attention to.
3. The Federal Reserve rate cut schedule, from the current market expectations, there is a probability of an interest rate cut in September, but it is only a probability.
My Real Fund Operations:
As mentioned above, the prediction of the market is an important part of the trading system, and even the first link, which determines the subsequent trading plan. My view on the current market is that it is at the tail end of the bear market, and the bull market has not appeared, so it belongs to the bear-bull chaos period (shock market). When the Shanghai Composite Index is below 3,000 points, most of the indices enter the undervalued or extremely undervalued area, and considering the current position, I will operate aggressively, that is, equity positions dominate, or even cross positions. When the Shanghai Composite Index is above 3,000 points, although it will not reduce its position at will, it will also reduce the action of adding positions.
This is the cyclical trading method I practice, which determines whether the trading position is aggressive, moderate or conservative, depending on the period to which the market belongs. I also hope that the above can bring some inspiration to everyone in terms of trading. For more operation details, you can pay attention to the "Luo Ji Wealth Management Trumpet" - "Luo Ji Family and Friends Fund" in the Tiantian Fund APP to understand the operation of the real fund account in real time.
The above is my bold conjecture for the third quarter of 2024, and the actual situation needs to be constantly revised according to the market. Welcome to follow + comment + like + forward