Rebirth of the Capital Legend
Chapter 390 Continued strong buying!
Then, when 11:30 arrived, the two markets took a lunch break.
The Shanghai Composite Index and the Shenzhen Composite Index have basically repaired the plunge in the early trading session, driven by the "big infrastructure" theme, as the divergence in market sentiment has turned back to a unanimous bullish situation. Only the ChiNext Index is still underwater with a drop of nearly 1%, once again widening the gap between the growth rate and the Shanghai Composite Index.
"Hehe, I didn't expect that with this adjustment in the market, the main capital groups in the market would concentrate more on the core theme of 'big infrastructure'." After the midday close, in the main hot money group of Shanghai, Shanghai Ultra Short Gang, Xu Qiao laughed and said with emotion, "Is this the third divergence? It can still be taken on, which shows that the core logic of the main theme of 'big infrastructure' is indeed strong enough, and it also shows that the active capital flow in the market is indeed much more abundant than before. The liquidity of the entire market has also improved significantly compared to before."
"The core theme of 'big infrastructure' has turned from divergence to consensus today, which is indeed beyond expectations." Lao Zhang also responded at this time, "Looking at the strength of the market, the short-term hot sentiment of the core theme of 'big infrastructure' is expected to continue for two days, and the corresponding hot concept stocks are also likely to be hyped again."
"Although from the market point of view, the speculation sentiment of the core theme of 'big infrastructure' has once again turned from divergence to consensus, in fact, it still feels a bit like a spent force." Old Wu thought for a while and responded, "During the first two divergences, the funds group that took over the core theme of 'big infrastructure' were mostly short-term speculative funds in the market, and there were also institutional funds in and out of the market that were eager to increase their positions.
But what is the nature of the long funds that are mainly responsible for the core theme of "big infrastructure" today?
It is obvious that the funds mainly come from the losses of individual stocks in other sectors!
This shows that the short-term funding capacity of the core theme of "big infrastructure" has almost reached its limit.
Once this wave of selling of stocks in other sectors is over and the funds for chasing and following are exhausted, the core theme of "big infrastructure" will probably enter a stage of adjustment.
This final stage of the market, when the tide is finally drawn, will not be very high, nor will it last very long."
"Today, the funds of other sectors have indeed been seriously siphoned off by the core theme of 'big infrastructure'." Xu Qiao heard what Lao Wu said and responded, "Does this mean that there are not many new incremental funds entering the market? The market has turned to a situation of stock game again?"
Brother Chen smiled and responded, "Although the 'big infrastructure' trend led by 'Hua Yi Capital', headed by Brother Su, has stirred up the market's short-term bullish sentiment, it has not actually attracted much incremental off-site funds to enter the market. This can be seen from the daily volume expansion and the decline in the volume increase rate in the past one or two trading days.
The real estate market and the stock market are two markets that are closely related to everyone.
The size of the real estate market and the money-making effect after the trend emerges have a siphoning effect on market funds that far exceeds the stock market.
For the vast majority of ordinary people, that's what they think in their hearts.
Investing in a house is more stable and has a stronger trend than investing in stocks.
What's more, the current stock market does not have a good continuous money-making effect. In the context of a booming real estate market, it is even more difficult to attract off-market funds to enter the market for transactions.
Therefore, from the beginning to the end, the market has been following the pattern of stock game.
It's just that due to the core theme of "big infrastructure", the market exploded very quickly, and many major capital groups in the market did not hold any positions in this main line direction.
This has led to a large amount of funds recently rushing to buy shares in the main direction of "big infrastructure".
It also led to a continued short squeeze and rise in many core leading stocks in the main direction of "big infrastructure".
But this phenomenon is short-lived and not a normal phenomenon in the market.
Once the major funds in the market have completed their positions on the core theme of "big infrastructure", the market's volume will surely decline rapidly and return to the previous trading volume level.
In other words, the market trend in recent days is a local market trend in which institutions concentrated on adjusting their positions and going long.
It is not a reversal of market trends, nor is it possible to attract too many off-market funds to enter the market, and it is impossible to bring sustained incremental funds and ample liquidity to the market. "
"To put it simply, this is still an institutional act of banding together, right?" Lao Zhang took over and said, "Whether it is now or for a long time to come, the market will only have structural trends, not comprehensive trends, right?"
Brother Chen nodded and said, "Yes, that's what I mean."
"In fact, it's good to be able to grasp the structural market." Xu Qiao is not pessimistic about the subsequent market trend and the future, and said with a smile, "Anyway, the most pessimistic and difficult time has passed. Even if the subsequent market liquidity cannot be restored to the level of last year's bull market, it can be improved compared with the first half of the year, right? Moreover... For the structural market, we must focus on the main line. At present, the core line of 'big infrastructure' has formed a concerted force of market funds and a consistent expectation.
This is coupled with the continuous release of favorable policies and the stimulation of the booming offline real estate market.
Even if the subsequent development of the entire market is not optimistic and liquidity will not increase in the short term, I think it should still be possible to reap some profits by focusing on this core theme and speculating around the core theme of "big infrastructure", at least be able to outperform the market."
"Looking at the market trend and the tendency of major funds to follow suit..." Lao Zhang said, "It seems that the trend of large-cap core weight stocks being stronger than small-cap concept stocks is becoming more and more obvious. Does this mean... that we really have to follow the example of institutional funds and hold on to the core leading stocks of the 'big infrastructure' theme? Become a 'value investor'?"
Old Wu smiled and said, "This is not called 'value investment', but trend investment. We follow the market trend and focus on the core leading stocks that are being held by the main funds. I don't think there is anything wrong with this. At present, the core leading stocks in the core main line of 'big infrastructure' have just emerged from the trend, and the positions of institutions should not have been established in general. In other words, there is still a lot of room for the trend of holding together to continue.
Compared with the first half of the year, the trends of the liquor, pharmaceutical and white goods sectors, which are concentrated by institutions, are obvious.
At the current relatively low stock price, when institutions have just begun to build initial positions, what's wrong with buying stocks that are the inevitable target for institutional funds to build positions on the core theme of "big infrastructure" and letting the institutional funds that continue to follow suit and come together to support us?
The weighted core leading stocks, although large in market cap, have low elasticity.
But the advantage is that it is stable enough.
When the market's major funds tend to clearly favor large-cap stocks, these core leading stocks will rise more than the market when they rise and fall less than the market when they fall. In the long run... it will be natural for them to outperform the market easily.
Looking at the liquor, white goods, and pharmaceutical sectors in the first half of the year, have the long-term gains of stocks such as Qianzhou Moutai, Hengrui Medicine, and Gree Electric Appliances been less than the overall market? Have they gained less than any other hot concept stocks in the market? Not at all. Even Qianzhou Moutai is among the top 20 stocks in the first half of the year.
Why bother playing games with the market and speculating on emotions every day when you can have the opportunity to win easily? "
"Old Wu's words make a lot of sense." Brother Chen responded, "It's not that we have to deliberately change our strategy, it's mainly because of the market trend."
"As long as the market is centered around the core theme of 'big infrastructure', I don't think the strategy is very important." Lao Zhang said, "As long as expectations are consistent and the underlying logic is constantly strengthening, when the core leaders rise, small-cap growth stocks and concept growth stocks will also rise with them." "Well, that's right." Xu Qiao nodded, "Just choose the main theme. As for what stocks to choose, everyone has different understandings and naturally cannot be forced."
Although he agreed with what Old Wu and Brother Chen said in his heart.
We also noticed that the main funds in the market are tending to pour more and more into the large-cap stocks.
But he does not think that short-term trading is impossible. He just thinks that whether it is large-cap stocks or small-cap concept stocks, it is necessary to focus on the core theme.
Following the discussion among several people in the group...
During the lunch break, on the Internet and on major stock investment exchange platforms, discussions on the core theme of "big infrastructure" and the overall market trend gradually shifted from disagreement to consensus.
"When the market plunged this morning, I thought the main trend of 'big infrastructure' had reached its peak. Now, looking back, I find... this is an aerial relay!"
"Fortunately I sold LeTV this morning and bought Conch Cement."
"Why is the performance of the ChiNext so much weaker than that of the Shanghai Composite Index?"
"Real estate, construction, coal, nonferrous metals, steel, these are the core sectors of the 'big infrastructure' theme. Most of the stocks are on the main board. Today, these sectors are the main sectors that led the gains. Can the Shanghai Composite Index not be stronger than the ChiNext Index? Let's take a look at the main constituent stocks of the ChiNext Index. Most of them are media and Internet software stocks. These stocks have been the main force of the market's decline in the past six months. You say... Can the ChiNext Index not be weak?"
"I didn't expect the real estate industry chain to be so strong. How many waves of disagreement has this happened?"
"The more I feel afraid to buy at high prices, the more it will rise."
"Every divergence in the market is a buying opportunity. The core theme of 'big infrastructure' definitely has a lot of room for subsequent market movements."
"Anyway, looking at the direction of major capital flows, it is clear that the net inflow of major funds into the real estate sector is continuing to expand."
"I thought the market would go through a 'high-low switch' today, but I didn't expect it to be a trend where the strong get stronger."
"Don't you say you shouldn't chase high prices in a bear market? Damn... low-priced stocks fell more sharply than high-priced stocks. I should have decisively stopped losses and chased the core stocks in the morning."
"High and low are not determined by stock prices, right? We have to look at valuations. From the perspective of valuations, stocks such as 'Conch Cement', 'Poly Real Estate', 'Huaguo Construction', 'BeiXin Building Materials', 'Shenhua Coal', etc. in traditional industry sectors such as real estate, construction, coal, nonferrous metals, and steel are indeed still very undervalued. By comparison, stocks such as 'LeTV', 'Baofeng Technology', and 'NetSpeed Technology' are at the high end of valuations, right? In theory, this can also be regarded as a high-low switch for big funds."
"Switching from highly valued small-cap growth stocks and concept stocks to blue-chip and white horse stocks, isn't that just switching between high and low valuations?"
"In a bear market, big funds are more concerned with stability, and flexibility comes second, so it is understandable that the heavyweights and blue chips have risen well."
“Should we all chase white horses and blue chips?”
"Anyway, I won't buy stocks that are held by institutions. Blue chips fluctuate less than 2 points a day, with no elasticity at all. What's the point?"
"Previously, Internet software stocks had high elasticity, but it was always downward elasticity."
"Market funds have already made their choice, and there is no reason not to follow."
Amid the discussion, more and more people began to realize the market's style switch and the signs that the "big infrastructure" main line was strongly siphoning the entire market's liquidity. More and more people also began to shift their focus from small-cap concept stocks to popular core blue-chip stocks.
At the same time, there are topics such as the idea of "switching high and low" in market valuation, the change in overall investment trend, and the change in main style.
It also continues to occur in internal groups of various institutions both online and offline.
Just as the overall market sentiment has once again shifted from divergence to consensus, the underlying logic of the core theme of "big infrastructure" and the tendency of funds to form clusters are increasingly recognized by more and more people.
When the one and a half hour lunch break was over, the market came to 1pm.
It was seen that the various related sectors based on the main theme of "big infrastructure" and many related concept stocks continued to strengthen their trends, and received more and more follow-up funds to take over and buy shares.
On the other hand, the GEM index includes sectors such as Internet software, film and television media, electronic information, and new energy industry chain.
The corresponding main-line concept stocks also continued to fluctuate downward and were not driven by the sharp rise in the "big infrastructure" main-line stocks at all. Moreover, on the corresponding market of these concept stocks, along with the continued rise of the "big infrastructure" main-line core stocks, the selling pressure became more and more serious.
More and more funds are fleeing from these non-popular main lines that are heavily locked up and can no longer attract institutional funds, as well as those that are concentratedly speculated by hot money. Even if they have to stop losses and cut positions at all costs, they have to free up funds and positions to chase the core stocks of the "big infrastructure" main line that have already risen high.
As this trend changes...
The market trends in the afternoon, in different sectors and main stocks, became increasingly extreme.
Although the overall market sentiment is stable, many small-cap stocks in the Internet software, film and television media, and electronic information sectors have experienced a general flash crash and sell-off. However, several core leading stocks in the main field of "big infrastructure" have clearly seen a lot of short-term gains. Various technical indicators have been overbought, but they are still setting new highs, and active buying is still emerging.
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