Today, the A-share market failed in its attempt to hit the psychologically important threshold of 3,000 points, but this result is not surprising. In the competition of the stock market, without the support of trading volume, any rush behavior will be pale and weak, like playing hooligan. Even if you can occasionally get lucky enough to break through this threshold, due to the lack of sufficient volume as support, the sustainability of the rise will be greatly reduced, and the risk of shrinking and luring will be greatly increased.
Looking back at today's market trend, from 2 p.m., the market has experienced a significant dive. This plunge did not come without warning, but was a direct reflection of the imbalance of power within the market. In the absence of sufficient trading volume, the market's rally appears to be unreliable, once quantitative trading is a little stronger, the index will be easily smashed down, this fragile upward trend, not only makes investors worried, but also the market's confidence has been severely hit.
Although the rally at the end of the session briefly boosted market sentiment, it is not difficult to find that this sneak attack rally is more out of a lack of confidence. In the context of the lack of sufficient trading volume, it is difficult for this kind of rally to continue, let alone drive the overall rise of the market. Therefore, the rally at the end of the session is more of a short-term technical rally than a fundamental change in market trends.
So, in the face of today's failure to rush to 3,000 points and the overall weakness of the market, we can't help but ask: how will tomorrow's A-shares go?
01 The market is struggling to close up, what is rising behind Sanlianyang?
In the current delicate pattern of the A-share market, the difficult closing of the market and the three-in-a-row positive trend have attracted widespread attention, behind which a series of market dynamics and capital flows have revealed some deep-seated logic and strategies. In particular, in the action of the national team funds to painstakingly increase dividend assets, especially the top 20 industry leaders by market capitalization, we can gain insight into the subtle changes and strategic intentions of the market.
Why did the national team fund choose to increase the dividend assets and market capitalization leaders? This reflects not only the short-term market strategy, but also the macroeconomic situation, policy guidance and market sentiment.
In the current critical period of sluggish global economic recovery and domestic economic structural transformation, it is particularly important to stabilize market expectations and maintain the healthy development of the capital market. Therefore, by raising the dividend assets and market capitalization leaders, the national team funds aim to stabilize the broad market index and prevent it from deviating too much from the important psychological threshold of 3,000 points, thereby avoiding panic declines and runaway markets from falling in panic.
However, although this behavior of immeasurable short-pull index can boost market sentiment in the short term, it cannot bring real money-making effect, in fact, from the performance of individual stocks, large-scale losses are still common.
This is mainly because the strategy of the national team funds is mainly focused on the leading stocks with large market capitalization, and these stocks tend to be less affected by market sentiment and have relatively low volatility, so although the index is rising, most individual stocks have not benefited from it, but have fallen into a downturn because of the dispersion of market funds and a wait-and-see attitude.
So, what is most lacking in the current market? The answer is undoubtedly the money-making effect. In a market that lacks a money-making effect, it is often difficult for investors to find profitable opportunities, and it is difficult for market confidence to be effectively boosted. Therefore, although the national team funds are trying to stabilize the broader market index, it will be difficult for this rally to continue without an effective money-making effect to support the market.
Next, let's take a closer look at what exactly the market is up. By sorting the market value of the A-share market from high to low, we can see that among the top 10 stocks in terms of market capitalization, such as China Mobile, Industrial and Commercial Bank of China, PetroChina, China Construction Bank, Moutai, etc., all of them are mainly rising. Among them, bank stocks occupy half of the position.
The strong performance of these market capitalization leaders is undoubtedly a key factor driving the rise of the broader market index, however, this rise is not based on improving company fundamentals or improving performance, but more influenced by market sentiment and capital flows.
Further looking at the performance of individual stocks in the top 20 market capitalization, we can find that only three stocks fell today, which means that the national team funds are mainly concentrated in these leading stocks with large market capitalization in the process of stabilizing the market index.
This strategy does play a role in stabilizing the market to a certain extent, but it also exacerbates the differentiation within the market.
So, why did the national team fund choose this strategy? On the one hand, this is because the market capitalization leaders usually have a large market capitalization and liquidity, which can accommodate a large amount of capital inflows and outflows. Therefore, by pulling up these stocks, the national team funds can more effectively control market movements and stabilize the broader market index. On the other hand, the market capitalization of leading stocks often represents the leading position in the industry and high profitability, and the rise in their stock prices can also improve the overall valuation level and investment confidence of the market to a certain extent.
However, this strategy also comes with some problems. On the one hand, because the funds are mainly concentrated in the market capitalization leading stocks, the differentiation within the market has intensified, and small and medium-sized enterprises have lost more blood. This is not only detrimental to the healthy development of the market, but also undermines investors' confidence and enthusiasm for investment.
On the other hand, this kind of behavior of the infinite empty pull index can not bring real money-making effect, but will exacerbate the speculative atmosphere and volatility of the market, therefore, while stabilizing the market, it is also necessary to pay attention to improving the market's money-making effect and investor confidence.
02 The amount can be lower and lower, will the market still be able to hit 4 consecutive yangs tomorrow?
In the current A-share market, the volume is gradually decreasing, and people can't help but have doubts about whether the market can maintain its strength and continue to hit Silianyang. Especially in the last two trading days of the week, today and tomorrow, the market has been under unprecedented pressure, which is not groundless, but stems from several core considerations.
On the one hand, recent market movements are highly dependent on the support of high-dividend sectors. This strategy does serve to stabilize the index in the short term, but it also hides a lot of risks, and the high-dividend sectors, while stable, are not always invulnerable.
In the event of a correction in the leading stocks of these sectors, the entire market will be under tremendous pressure, not only from the decline of the index, but also from the loss of market confidence. At that point, investors are likely to pull out, further exacerbating the market's correction.
On the other hand, the broader market quickly retreated after hitting 3,000 points, showing signs of volume-price divergence. This signal should not be ignored as it may signal that the market is about to enter a correction phase. Volume and price divergence usually means that the market's upward momentum has been insufficient, and investors are beginning to be cautious about future trends, in this case, it is difficult for the market to continue to maintain strength, let alone hit the four consecutive yangs, on the contrary, the market is likely to have a pullback to correct the excessive rise in the previous period.
In addition, 300 billion reverse repos are due today, and the central bank has withdrawn more than 200 billion yuan of net funds. This news has undoubtedly put liquidity pressure on the market. There is still 250 billion reverse repos due tomorrow, and if the central bank continues to adopt the strategy of net withdrawal, then the liquidity in the market will be further tightened. Liquidity is the lifeblood of the market, and once there is a liquidity problem, the movement of the market will be seriously affected. At that time, the market will not only be difficult to hit Silianyang, but may even fall sharply.
Of course, we can't ignore the actions of central banks in the bond market. The central bank has recently intervened in the bond market to curb speculation in the bond market, a move that will help return funds to the A-share market. However, this does not mean that funds will necessarily flow into the A-share market. Funds may be withdrawn from the bond market, but there is still a great deal of uncertainty about whether they can buy A-shares. After all, the A-share market itself is also facing many challenges, such as slowing economic growth and trade frictions. All of these factors can influence investors' decision-making, leading to changes in the direction of capital flows.
03 From a technical point of view, tomorrow's A-shares may only go like this
Based on the principle of technical analysis, tomorrow morning, the A-share market is likely to have a retracement of the A center (2958-2976), which may be presented in the form of a low opening or shock killing, but we must emphasize that the space for the retracement must be strictly controlled, and the key point of 2976 cannot be easily touched. Ideally, the market would complete this retracement above 2983 to ensure that the uptrend can continue and set the stage for the market to perform the day after tomorrow.
However, taking a broader perspective, it is not difficult to find that the rebound in the past two days has shown an extreme divergence trend. Whether it is the SSE 50, which represents the blue-chip of the broader market, or the CSI 300, which covers a wider market, there are clear internal differences.
In particular, the trend difference between the consumer ETFs and consumer 30 ETFs in the SSE 50 Index is even more significant, and this differentiation has become more and more obvious after the implementation of the registration system, and the market trend has become more fragmented and complex, exceeding the expectations of many investors.
However, I believe that this divergence is only the market performance in the early stages of the rally, and in the middle and late stages of the rally, the market tends to create a bullish sentiment to achieve the lure effect before the bull market finally bottoms. This is a natural law of market operation and the key for investors to find opportunities in the market.
So, how should investors respond to such a market environment? In my opinion, it is still necessary to focus on seeing more and moving less and preserving strength. Although there is no shortage of good news and expectations in the market, we must be soberly aware that these news and expectations cannot directly change the trend of the market. Market movements are the result of a combination of many factors, which are often difficult to predict and grasp.
Therefore, investors should remain cautious and rational in their operations. Don't blindly chase the ups and downs, and don't be easily swayed by short-term fluctuations in the market. We should look a little further and focus on the fundamentals and long-term trends of the market. Only in this way can we keep a clear head and make the right investment decisions in a complex and volatile market environment.
In addition, now the vast majority of sectors and individual stocks do not follow the index, so we should pay more attention to specific sectors and individual stocks, and less look at the rise and fall of the index. For example, the index has returned to around 3,000 points, and many stocks are stuck at 2,500, which is the real A-shares.
And I think this trend will continue, the index will definitely return to above 3000 points in the future, but most of the stocks will fall below 2500, or even 2000, 1000, and a large number of junk stocks will fall to delisting. According to my personal evaluation criteria for junk stocks, at least one-third of the current A-shares are junk stocks, and these junk stocks will eventually be delisted. Only when a large number of junk stocks are delisted, will A-shares really get better.
Announcement Statement:
All information and expressions in this article only represent the author's personal views, and do not constitute investment advice and trading basis, and are for reference only! The subject matter involved is not a recommendation and is only for communication. I do not bear any responsibility for the losses incurred, and investors need to be responsible for their own investment behavior.