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Advice in-depth weekly commentary: Can A-shares survive the big dive in the external market?

Advice in-depth weekly commentary: Can A-shares survive the big dive in the external market?

From the perspective of improving the intrinsic stability of the capital market, the nature of the 7.31 rebound,

Can the A-shares survive the big dive in the outer market?

Dear investors, I am a good word

Today is Sunday, August 4th

The topics discussed with you today are:

From the perspective of improving the intrinsic stability of the capital market, the nature of the 7.31 rebound,

Can A-shares survive the plunge in the external market?

Last week I went from A-shares for two and a half years

The Shanghai Composite Index fell 20.5%, and the Shenzhen Component Index fell 60%.

The ChiNext fell 54%, and the Science and Technology Innovation Board fell 58.4%.

From a valuation perspective

The Shanghai Composite Index is 12.5 times, and the ChiNext is 27 times,

The Science and Technology Innovation Board is 31 times, and the CSI 300 is 10 times

Lowest valuation in the world

as well as from the volume

It shrank to 600 billion in nearly 20 trading days

It shrank to more than 500 billion in five trading days

As well as the angle of one dollar stock, two yuan shares, and more than half of five yuan shares

Think 2800 points is the bottom

2860 and 2830 points are the two limit positions

It's a great opportunity, and it's worth seizing

Three days into the week, there was a big rebound at 7.31

First topic:

Some understanding of improving the intrinsic stability of the capital market

It was presented at an important meeting last year on July 24

Enhance investor confidence and activate the capital market

A year later at 7.30 an important meeting was presented

Boost investor confidence,

Enhance the intrinsic stability of the capital market

It looks pretty much the same

This time, however, special emphasis was placed on improving internal stability

This is after the index fell from 3164 to 2865 to 309

What does it mean to emphasize inner stability?

What I understand is that A-shares will be emphasized

2800 to 3200 points oscillating back and forth

This is in 2022, there were 2863, 2885 and then rebounded

This year it was again in this range

The highest point was 3,174 points on May 20

The lowest is 2865 points

Pinch the head and tail to run back and forth between the middle 400 points

That's what I realized from management

Intrinsically stable cabinet for investors' reference

I don't know if you agree

The emphasis is now on improving the intrinsic stability of the capital market

What are his advantages?

I think it's intrinsic to it

Policy initiatives to the bottom

First of all, the reform of the basic system is at the bottom

On February 5 of this year, Niimura 2,829 points

At that time, it fell to 2635 points

The national team entered the market strongly

from 2635 points to 3174 points, an increase of 30%

On April 12, the 1+N policy of the new nine articles was released

It corrects the great leap forward in expansion that has lasted for more than a decade

and the most stringent new rules on the size of non-reduction in history

Now the queue for new listings has become 295

From 780, the number has dropped to 295 in a year

Then, not long ago, the refinancing of restricted shares was stopped

stopped the refinancing of securities,

The most severe punishment for counterfeiting has also been introduced

and legal measures

300,000 and 600,000 became 5 million and 10 million fines

The sentence of three years became 10 years

Therefore, this series of basic system reforms and measures lay the foundation

Second, macroeconomic policies will continue to exert force

Also strengthened the 2800 point bottom

It was emphasized in the Third Plenary Session of the CPC Central Committee

Macroeconomic policies should be sustained and strengthened

He stressed the need to unswervingly complete the annual economic growth target

On July 31, the executive meeting of the State Council emphasized again

It is necessary to further stabilize expectations and strengthen confidence

Rely on solid policy initiatives and reform actions

to unleash more positive messages

It is necessary to launch a batch in a timely manner when the conditions are ripe

Tangible reforms

To make a batch of strong operability and good effect

Incremental policy initiatives that are accessible to the masses and businesses

This improvement should be effective

Such a policy should be felt by the common people

We expect a gradual rollout in the future

Thirdly, in terms of personnel

It also provides favorable conditions for strengthening internal stability

This big rally of 7.31

It was the State Council that removed Fang from his post

This personnel move is in line with the will of the people and the will of the people

It means that in the past, under the guise of internationalization,

A great leap forward in the expansion of the banner of market-oriented innovation

What is the international version, restricted stock refinancing, refinancing securities

High-frequency quantitative trading, etc., will be completely terminated

There can be no resurrection

After that, he was the deputy general manager of the Shanghai Stock Exchange

The former director of the Shenzhen Securities Regulatory Bureau of the China Securities Regulatory Commission was investigated and punished

These initiatives are reformed from within

Fourth, some market conditions for intrinsic stability are already in place

It's all the data, the valuations, the declines that I listed last week

The number of binary stocks, broken shares, and trading volume

This strengthens the support at the 2800-point bottom

At the same time, it also shows that there is no stability yet

Great efforts need to be made to strengthen the internal stability of the capital market

This worries many people about whether it will fall to 2635 points

Will it fall to 2500 points

and so on

This is the statement of the important meeting at the highest level on July 30

Second topic:

What is the significance of the 7.31 rally?

I think at least the bottom is tamped

Judging by the day's gains

I haven't seen it in a long time

The Science and Technology Innovation Board rose 4.7%, and the CSI 500 rose 3.98%,

CSI 1000 rose 3.97%, CSI 2000 rose 3.5%,

The GEM rose 3.64%, and the Shenzhen Component Index rose 3.37%,

The Beijing Stock Exchange 50 rose 2.47%, and the CSI 50 rose 2.3%,

The CSI 300 rose 2.16%, and the Shanghai Composite Index rose 2.06%.

SSE 50 up 1.72%

This increase has not been seen in a long time

It can be said to be a medium-long white candlestick

The ratio of individual stocks is 5050:255, and the price limit is 114:1

It's also a disparity that I haven't seen for a long time

Looking at the trading volume, it is 908.4 billion

This is an increase of 304.7 billion from the previous day

The increase reached 50.5%, so it is significantly larger

According to statistics, the net inflow of main funds that day was 23.3 billion

Continuously shipped northbound funds bought a net of 19.6 billion

The national team once again entered the field to protect the plate

There is also the strength of the breakout of the moving average

On the day of the rebound at 2863 points at the end of April 2022

Only five antennas were broken

In October 2022, it fell to 2865 points and rebounded

It was also only broken through five antennas

A rebound of 2,635 points in February this year

On the same day, it also broke through the five antennas

And this time it broke through the five antennas and ten antennas in one fell swoop

Then the 20-day line of 2940 points was encountered

And closed at 2938 points, closing at the key level of 2930 points

So this time the rebound was stronger than the previous three

Thursday's choppy consolidation still closed at 2930 points

Friday was affected by the overnight plunge in U.S. stocks

Retracement of 2900 points

But this week

We look at the nine consecutive weeks of black candlesticks from the candlestick

Although one or two small white candlesticks are added

However, the unilateral decline appeared as the first yang of the weekly line

All 11 indices were the first positive after a nine-week decline

It can be said that this is the beginning of the rally that has risen from the bottom

So the nature of the 7.31 rally

I think it may have formed another important bottom

Some people jokingly call it the bottom of Fang Moumou

I think this is a little more figurative, and it makes sense

In fact, this rise in the market

Sometimes it's unreasonable

Everyone's inner desire is to vent their emotions

The rise is formed

The third topic:

The big dive in the peripheral stock market, can A-shares hold up?

We see two days in a row

There has been a rampant momentum in the peripheral markets

On August 1, the Dow fell 1.21%, the S&P fell 1.37%, and the Nasdaq fell 2.3%

On August 2, the Dow fell 1.51%, the S&P fell 1.84%, and the Nasdaq fell 2.43%

Japanese stocks fell 5.81%

Intel fell 26% on August 2

Advice in-depth weekly commentary: Can A-shares survive the big dive in the external market?

The dollar index fell to 103.2 points, also down more than 1%

The yen appreciated sharply from 162 yuan to 146 yuan

The renminbi also appreciated sharply to 7.16 yuan

Advice in-depth weekly commentary: Can A-shares survive the big dive in the external market?

Why is it falling so much?

One factor was that United States' July non-farm payrolls data fell short of expectations

Unemployment rate at 4.3%

Another factor is that the United States plays a financial station

There was a discord among the allies

United Kingdom Canada preemptively cut interest rates,

The Bank of Japan raised interest rates in the opposite direction

This is the time limit for the Fed to announce that it will not cut interest rates for the time being

It may have to be postponed until September

All at once disrupted the Fed's rhythm

The United States and its allies are no longer in a huddle

The monoliths are in unison, but they go their own way

As a result, there was a rampant collapse of U.S. stocks and a sharp fall in the U.S. dollar index

Then people are worried

In this case, can our A-shares still hold up?

My opinion is that there will be some shock

It's because of global integration

Everyone is seeing how each market is performing

U.S. stocks fell, A-shares fell, Japanese stocks fell,

European stocks also fell, as did Hong Kong stocks

Although the decline of A-shares was small, it also fell

But I think it's mostly in the peripheral market

And our A-shares have their inherent stability

So the force of the impact will not be very large

From a forward-looking point of view

On the contrary, it is good for A-shares

Why?

We see the renminbi depreciating to 7.26, 7.28, and 7.30 at the highest

Now suddenly appreciated to 7.14,

Appreciation of 1000 basis points

This pair of assets for RMB, including A-shares

It's a positive, it's a boost

This is the reason for this

Goldman Sachs Morgan Stanley thinks

The world's smart money is selling off US stocks

It was the largest sale since August 2023

And hedge funds have been selling US stocks for three weeks in a row

Then it moved to the Asia-Pacific market, especially the Chinese stock market

So we see the day of 7.31

Northbound funds unilaterally bought a large amount of 19.6 billion

The Fed postponed a rate cut this time

It is already too late to reject a shift in monetary policy

So it is even more determined to cut interest rates in September

Goldman Sachs Morgan Stanley argues:

If interest rates start to cut in September

At least three times during the year

Instead of 0.25% each time, it will drop by 0.5%

This team is extremely favorable to our A-share market

A week ago, our central bank lowered the lending rate

Then the six major rows take the lead,

The major banks have also lowered their deposit rates

If the United States cuts interest rates again

It has formed a greater positive for our A-shares

Then our projected trend for this year is N-shaped

The big rally from 7.31 has begun

Although there will be a bit of a lag in the disruption of the peripheral market

But upward, that's for sure

So the turning point was at the turn of the second and third quarters

China's stock market will be imminent to break the involution, from defense to offense

There may be one chance in the face of adversity

That is, the eight-character policy that I have always emphasized:

Sowing in winter, giving birth in spring, resting in summer, and robbing in autumn

At the junction of the third and fourth quarters, the autumn rush

It's an upward stroke of N

for our market

If there is a sinking below 2900 points next week

Investors with light positions

This is a rare buying opportunity

Then 2900 points have to hold on, and they have to be coiled

If you are coiled

I can lay a solid foundation of 2930 points

Then take the twenty antenna at 2937 points

Finally, take the five-week moving average

Return to the bullish market

That's a great hope

So next week is mainly to consolidate in this area

At the same time, the volume cannot shrink

In the past three days, 908.4 billion, 786.2 billion, 726.3 billion

It must hold on to more than 700 billion

2930 points can be stabilized

Then the future trend is more promising

Where is the hope?

It is now the semi-annual line of 3017 points and the annual line of 3031 points

There is only a 14-point gap between the two moving averages

If the half-year line crosses the annual line to achieve a golden cross

There is a siphoning effect on the whole market

The space for the market to come out is out

There may be a process

But the direction we have to see in advance

So I think 3000 points is still going to go

3050 points still to go

You may even be able to see 3080 points

Now we are in the darkness before the dawn

There is a glimmer of light, but there are many difficulties

It's one such process

Of course why not like before

Can a long white candlestick like 7.31 come out and be very optimistic?

Because there are still three problems in the market that have not been solved

One is that quantitative trading restrictions are not enough

The second is to delist the shares at the par value of one dollar

Didn't give one like the United States stock market

90-day grace period opportunity,

Or an opportunity to reorganize, or an opportunity to buyback

Or an opportunity to shrink shares

In addition, some listed companies that violated the rules before delisting

To be compensated and indemnified to investors

The third long-term funding is still in lip service

It has not been put into practice

Let the people feel it, and you can see it

That is, the huge amount of equalization funds that I have been looking forward to time and time again.

Now it's up to the national team alone

He played the big four ETFs and the big four bank stocks, which played a limited role

Equality Fund, if launched

In public opinion, momentum

It has a shocking effect on 220 million shareholders and 700 million people

It is a deterrent to the bears

So I still hope

After the passage of the third review of the Financial Stability Act

In the third and fourth quarters, you can see the opportunity to level the fund

Then it will be the majority of investors

A big opportunity to be able to turn over to varying degrees

So I have a stock market on China

Don't be too pessimistic, there is still a chance

To have faith, let's take it one step at a time

Well, the above comments and analysis

Just one word for your reference

Thank you all for listening and watching