This week's market is the first trading week after the holiday, and the market has seen a rapid adjustment. The broader market opened with a daily limit on Tuesday and then fell all the way. The market continued to retreat on Wednesday and locked up investors who bought it on Tuesday. Although there was a rebound on Thursday, the rebound was very weak, and the trading volume also shrank, so the market continued to fall on Friday, but such a decline is a matter of time in our eyes. Because the market rose by more than 600 points in just 9 trading days before the holiday, which is also rare in the history of A-shares, I don't think it will last. Therefore, in my articles last Wednesday and Sunday, I always emphasized the view that the market should be adjusted, and I also explained the reasons for the adjustment very clearly.
In last Sunday's article, we also reminded everyone to pay attention to the changes in the opening of Tuesday morning, and also used the word mutation: "The A-share market has reached a more extreme position, so we must pay attention to the sudden change in the market at any time after the opening of next week." "So Tuesday's market limit and then the fall after the opening is a very good opportunity to ship, so friends who have read my article will lock in their profits. What's next for the market? Generally speaking, after a large number of sharp declines in the market, there will be a trend of small declines and contractions. If there is no greater good news in the future, then the market will return to its original trend - market-oriented, and this short-term policy market will end.
Judging from the current trend, the trend of subsequent rebound and decline and then rebound and fall will inevitably appear. From the management's point of view, they also don't want the market to skyrocket and plummet, so the follow-up trend is estimated to be grinding slowly. We mainly have to observe whether the mainland's economic situation changes after the introduction of favorable policies in the early stage, which is also a weather vane that determines whether the stock market will be good or not in the future.
The GEM has gone similar to the main board this week, rising and falling sharply, and has now almost lost half of the country since the start of the market. This week's hot spots are mainly focused on Huawei Euler, and the technology sector adjusted on Thursday, and the funds turned to infrastructure and Zhongzi, but these sectors are short-lived, and the semiconductor sector can still be paid attention to next week.
What's new:
The Ministry of Finance held a press conference, and these directions are worth paying attention to
Minister of Finance Lan Foan said at a press conference on October 12 that it is planned to increase the debt limit on a large scale at one time, replace the stock of implicit debts of local governments, and increase efforts to support local governments to resolve debt risks.
Note: The Ministry of Finance plans to increase the debt limit on a larger scale at one time to replace the implicit debt of local governments. From Minister Blue's speech, we can see that by 2023, the local hidden debt will be 50% less than in 2018. What is 2018? I checked it about 30-40 trillion, so now it may be between 15-20 trillion, so the amount of this one-time replacement should not be small. The second thing to pay attention to is that the superimposed use of local government special bonds, special funds, tax policies and other tools to support and promote the real estate market to stop falling and stabilize, real estate may become a key to solve our economic difficulties. The third is to give blood transfusions to banks and issue bonds to support large commercial banks to replenish their core capital. It seems that a large amount of deposits poured into the banks in the early stage, which led to a doubling of pressure on the banks. With the recent upturn in the stock market, I think the pressure on the banks has decreased. Overall, there are still many points worthy of our attention at this press conference, and it is difficult to say whether it exceeds market expectations, because some favorable policies will be gradually implemented in the future.
Seven departments, including the China Securities Regulatory Commission, have studied the inclusion of stock index futures and treasury bond futures in specific varieties and are open to the public
A few days ago, the General Office of the State Council forwarded the "Opinions on Strengthening Supervision and Preventing Risks and Promoting the High-quality Development of the Futures Market" issued by the China Securities Regulatory Commission and other departments. The "Opinions" deployed 17 key measures in 8 aspects, among which it is proposed to steadily promote the opening up of the futures market, expand the scope of the opening of the commodity futures market in an orderly manner, and study the inclusion of stock index futures and treasury bond futures in the opening up of specific varieties. Overseas futures exchanges will be allowed to launch more financial products linked to domestic futures prices, and strengthen regulatory capacity building in an open environment.
Note: For stock index futures, allowing this product to develop more overseas products will have a greater impact on the A-share market in the future. However, when gradually integrating with the international market, the global performance of A-shares may be stronger. In addition, it is necessary to pay close attention to the steady and orderly promotion of commercial banks to participate in the pilot project of treasury bond futures trading. Because after the "327 treasury bonds" incident, commercial banks have been banned from entering this range. It was not until February 2020 that the China Securities Regulatory Commission, the Ministry of Finance, the People's Bank of China, and the China Banking and Insurance Regulatory Commission jointly issued an announcement to allow qualified pilot commercial banks and insurance institutions with investment management capabilities to participate in treasury bond futures trading on the China Financial Futures Exchange. At that time, the first batch of pilot institutions included Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, and Bank of Communications, but they were not fully liberalized.
China Association of Automobile Manufacturers: Vehicle sales in September 2024 will be 2.809 million units, down 1.7% y/y
According to data from the China Association of Automobile Manufacturers, vehicle production and sales in September reached 2.796 million units and 2.809 million units, up 12.2% m/m and 14.5% m/m and down 1.9% and 1.7% y/y, respectively.
Note: According to the data of the China Association of Automobile Manufacturers, compared with last year, sales and production have declined, but they are rising month-on-month, which is not easy in the bad economic environment. In addition, according to the data of the Passenger Car Association, the domestic retail sales of new energy passenger vehicles reached 1.123 million units in September, a year-on-year increase of 74.4%. Among them, BYD sold 417603 new energy wholesale, Geely Automobile 91,134, and Tesla 88,321, and it seems that the sales of new energy vehicles are more vigorous.
Weekly review:
This week, the main board opened at 3,674 points, reached a high of 3,674 points, a low of 3,187 points, and closed at 3,217 points. It fell by 118 points, or 3.56%. The Shenzhen Component Index opened at 11,864 points, with a high of 11,864 points, a low of 9,935 points, and a close of 10,060 points. It fell by 469 points, or 4.45%. The GEM opened at 2,576 points, with a high of 2,576 points, a low of 2,066 points, and a close of 2,100 points. It fell by 74 points, or 3.41%, and the smallest decline in the three major indexes this week was on the ChiNext board. In addition, the Beijing Stock Exchange 50 Index rose by less than 1 point this week, or 0.05%.
Technical analysis of the main board of the Shanghai Stock Exchange:
This week, the market only has 4 trading days because of the holiday. This week, the 4 trading days began to adjust the trend, and the opening of the daily limit of the market on Tuesday became the highest point of the week. At present, the market has made up for Tuesday's gap, and there are still 4 gaps below that have not been filled, and the first gap facing next week is 3087 points. From the moving average system, the market has fallen below the 5-day moving average on Friday, and the current 5-day moving average is still going up, and next week look at the support strength of the 10-day moving average. If the 10-day moving average is effectively broken, then this tells us from a technical perspective that the market is over, where the market came from or where it is going back. At present, the market has fallen back to the rebound diarile, so next week is key. From a purely technical point of view, there was a dead fork on the third line of the Japanese KDJ and diverged downward. The daily MACD fast line U-turn down and the opening of the slow line are shrinking, the red column pile is shortening, and the short-term adjustment of the market is not over.
Looking at the weekly line again, this week's market pulled out a big black candle covered by dark clouds. Since the market opened with a daily limit, the actual decline in the market was not very large. However, the K-line body fell by more than 450 points, and the weekly trading volume hit a daily volume of 5178 points. This week, the broader market fell below the 250-week moving average at one point, and closed above the 250-week moving average. At present, the market is still too far from the 5-week moving average, so the deviation rate is large. The weekly adjustment is still not over, and we should pay attention to the support of the 120-week line next week. The 5-week moving averages are now crossed by the 20-, 30-, and 60-week moving averages. The J-value of the weekly KDJ turned around and fell out of the strong area of 100. The weekly MACD fast line continued to rise, but the slope of the fast line slowed down, and the red column piles continued to expand.
GEM Technical Analysis:
The GEM did not continue last week's rally this week, but opened with a daily limit, and then fell back. Specifically, Tuesday's trend is very tempting, and the GEM price limit on the day fell rapidly after the opening of the market. After falling back to the 2336 point line, it is very strange that it slowly oscillates upward. The close also closed near the daily limit, which attracted many retail investors to enter during the period. However, the GEM opened sharply lower on Wednesday, directly locking up all the investors who bought on Tuesday, and then falling continuously for several days, not letting the people who bought on Tuesday escape. At present, the K-line shows that the GEM has opened 4 consecutive negatives, and the moving average system shows that the GEM has fallen below the 5-day moving average this week, and the support of the 10-day moving average will be seen next week. The three lines of the daily KDJ have a dead fork this week, the daily MACD fast line turns down, the red column pile shrinks, and the overall view of the short-term gem will appear to bottom out and rebound last week, but the rebound space is limited.
Looking at the weekly line again, the weekly K-line of the GEM this week, like the main board, is also a long black line. At present, the GEM index has fallen below the 250-week and 120-week moving averages, this week's 5-week moving averages are fast golden crosses, 30-week and 60-week moving averages, and next week's 10-week moving averages will be golden crosses 20-week moving averages. At present, the GEM index is still far from the 5-week moving average, so there is still room for adjustment in the market outlook. From a purely technical point of view, the J value of Zhou KDJ turned around and fell out of the strong area of 100. The weekly MACD fast and slow line continues to go up, and the red column continues to amplify, so there is a possibility that the GEM will fluctuate sideways after the fall next week.
Editor's note
The column of the author of this article, Wang Hui, has been settled in "Yicai Knows", and the analysis of the previous market point interval and key focus sectors have been recorded as audio. For more financial knowledge, please click on the lower left corner to go to the "Yicai Knows" financial knowledge learning platform.
Author: Wang Hui
Editor: Li Ang
Producer: Gu Jie
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