Rebirth of the Capital Legend
Chapter 409: The struggle for dominance in the market!
"The rapid rise of the main stocks of 'big infrastructure' this morning is indeed a trap for buying." Lao Zhang responded in the group, "I said that if we continue to force it upwards at this position, it will most likely fail to stabilize with the current market volume. Sure enough... The logic line of 'high-low switching' is within expectations when the main line of 'big infrastructure' is weak in upward attack and expectations are adjusted."
"The logic of 'high-low switching' was rehearsed at the end of last night." Old Wu also said at this time, "However, in the low-level oversold main line sectors such as 'new energy industry chain', 'film and television media', 'Internet software', and 'electronic information', there should be very few potential institutional main funds. Although the sentiment of this logic line has been played out and has been initially recognized by most active fund groups in the market, whether the main hot money guiding this logic line can compete with the institutional main funds concentrated in the core leading stocks of the 'big infrastructure' main line, as well as the white wine, white appliances, consumption, medicine, petrochemical and other sectors, for the subsequent market pricing power and the active follow-up fund groups, at present... there are still some variables."
"According to what you said, Old Wu...will the market conditions change?" Old Zhang asked.
Old Wu responded: "Originally, among the many abnormal low-level oversold main line sectors, except for the 'new energy industry chain' line, which has relatively medium- and long-term favorable expectations, the two core main line sectors of Internet software and film and television media have basically no core logical expectations and have been completely abandoned by the main market funds. The majority of investors currently gathered in these main line areas are retail investors.
Retail investors are most susceptible to emotions and are most likely to chase rising and falling prices.
Furthermore, the market has limited liquidity.
The most active short-term retail investors in the market, as well as the main funds with a slightly larger structure, will inevitably follow the trend and invest in areas with higher certainty and stronger money-making effects.
At present, the main line of "new energy industry chain" and its local profit-making effect should be the strongest.
However, institutions do not have many positions in this main area.
In other words, the main funds with a slight market structure are actually reluctant to intervene in such sectors and provide support to hot money and retail investors without first acquiring a base position.
What's more, the vast majority of capital groups participate in the 'high-low switching' logic line.
What they expect in their minds is just to make a short-term oversold rebound, that is, to take a bite and leave, and the purpose is just a short-term relay market.
Since it is expected to be a short-term speculative relay market with limited sustainability.
The institutional groups that have dominated the market trends in the past six months and have the market pricing power are even more reluctant to intervene to support the short-term funds.
So, I judge...
The logical line of market 'high and low switching' is formed.
Even though the main line of 'new energy industry chain', or the related 'film and television media', 'Internet software', 'electronic information'... these low-level oversold main line sectors have temporarily shown a strong rebound trend and formed a hot money-making effect of oversold rebound, it is probably still difficult to truly attract the participation of large institutional capital groups.
However, these large institutional capital groups are unwilling to support hot money and are unwilling to participate in the speculation of these oversold main sectors.
But what should you do if you want to avoid the volatile adjustments in the main sector of "big infrastructure" and avoid profits, or a sharp decline in the net value of fund products?
I guess they will definitely adjust their positions to intervene in the core main sectors such as liquor, white appliances, medicine, consumption, petrochemicals, etc., which have been showing sideways and shrinking fluctuations in recent times, for risk hedging, and at the same time guide the market of these defensive sectors.
The market trends of these sectors will be used to hedge against the adjustment trends of the main line of "big infrastructure".
Moreover, the core main-line sectors such as liquor, white goods, medicine, consumption, and petrochemicals, which are heavily supported by institutions, have formed a psychological expectation among many retail investors in the market that they will continue to rise and have a very low risk of a sharp drop due to their excellent performance and independent trends in the past six months.
With this psychological expectation, as long as the institutional main funds provide slight guidance.
Then, there will also be a large number of retail investors following the trend of these core stocks in the main sectors.
After all, in the entire market, there are smart and active funds that are aware of the overall investment style of the market and are continuing to concentrate on core large-cap stocks and blue-chip performance stocks. There are no fewer than those who like to speculate in the short term, chase market sentiment, and follow the trend of small-cap concept stocks.
That’s why I said that there is a high possibility that there will be changes in the subsequent market trends.
At the same time, if the market's "high-low switching" logic line is to be truly formed, the market must truly form an oversold rebound trend.
It is also necessary for the major speculators who are guiding the market today to seize the pricing power of market trends from institutions.
It is necessary to achieve a higher market profitability effect and attract active funds that are free from other main lines in the market to these low-level and oversold main line sectors.
Of course, if there is favorable off-market news during this period.
It is possible to dig out the long-term reversal expectation logic like the "big infrastructure" main line, so that some funds participating in the oversold rebound market can lock in positions with a long-term mindset.
Then, a new market trend shift can be considered to have truly taken shape.”
"It is basically impossible for hot money to compete with institutions for market pricing power at present, right?" Xu Qiao thought for a while and responded, "After all, the size of the funds of the two is not at the same level. Moreover, since the market is now in a bear market, many hot money that were active before are now reluctant to participate in market speculation frequently, which makes it even more difficult to create excessive volume and speculation sentiment and replicate the short-term speculation trend in the bull market.
What's more, just like what you said, Old Wu...
The main sectors such as liquor, white goods, medicine, and consumption have created trend inertia through the continued grouping of the main institutional players.
It is obviously easier for retail investors to believe that the prices of these main sectors will continue to rise.
It is also easier to attract retail investors to follow suit.”
"Yes, I think so." Old Wu nodded and said, "So, I think the short-term speculation of the 'new energy industry chain' and the rebound of other oversold main sectors are likely to be questionable. There is only 20% to 30% room for upward movement at most. And it is likely that they will fall back as quickly as they were hyped up. If you don't take the initiative, I'm afraid it's hard to participate.
On the contrary, it is the leading stocks in the core sectors of liquor, white appliances, and pharmaceuticals which have been fluctuating sideways for quite some time recently.
The core theme of "big infrastructure" has fallen into a short-term adjustment and is no longer siphoning active funds and institutional main funds from other main sectors of the market on a large scale.
In addition, the funds from profit-taking and unwinding of positions begin to be released.
These stocks, on the contrary, have good opportunities to rise.
Although the core leading stocks of these main sectors may not have much room for growth in the short term, compared with the concept stocks dominated by hot money in the fields of "new energy industry chain", "film and television media", "Internet software", etc., they are obviously much more stable and safer without the first move. Even in extreme cases, they cannot make much profit, but they will not suffer too much loss. "
"According to your prediction, Lao Wu, 20% to 30% of the speculation space is enough for speculation, right?" Although Lao Zhang agreed with the logic of Lao Wu's analysis, he did not want to invest in liquor, white goods, medicine and other main-line sectors where institutions are heavily grouped together. Instead, he wanted to intervene in the main-line speculation of the 'new energy industry chain' that has already produced a money-making effect. He couldn't help but say, "Besides, the current market's various active follow-up capital groups have just formed a preliminary consensus on the logic line of 'high-low switching' and the expectation of an oversold rebound. It should be cost-effective to intervene quickly and establish a position at this time, right?"
"The core leader has already reached its daily limit. I'm afraid that other second- and third-tier follow-up stocks will not have much room to grow." Old Wu reminded, "Oversold rebounds are speculative trends that often come and go quickly. You can participate, but you have to get in and out quickly. Anyway, I don't have the first move, so at this time... I won't participate anymore."
“As long as you don’t hold a heavy position, it’s still okay if you intervene with a small position.” Lao Zhang responded.
Then, without waiting for others to respond, he quickly allocated part of the funds in his account and invested in 'LeTV' and 'NetSpeed Technology' which were rising rapidly.
Just when Lao Zhang invested funds to participate in the oversold rebound, Xu Qiao pondered for a while, but ultimately did not follow up. Instead, he reduced his holdings of some core leading stocks in the "big infrastructure" main line, and added these reduced positions to the core stocks of the liquor sector that had not yet moved completely and were still in sideways fluctuations, such as "Qianzhou Moutai", "Wuliangye", and "Luzhou Laojiao".
As for Old Wu, he did not make any obvious moves and was still observing the market trends.
"Isn't anyone paying attention to the two major sectors of security cameras and consumer electronics?" Just as the three were busy adjusting their positions or thinking, Brother Chen, who had been silent, smiled and said, "Why is it that in your analysis, it is always high or low, and you either consider it from the perspective of hot money or the thinking logic of institutions? Can't you consider it from the logic of the market trend itself? Can't you focus on the main lines of other sectors?
The current market liquidity is indeed difficult to support a general rise in multiple core main lines.
It is also difficult to form a unified force among hot money and institutions.
However, the market conditions of local branch sectors, especially those with average size and strong reversal of industry fundamentals, are still very strong in their consistent expectations for going long.
Whether it is institutions or hot money in the market, they are actually smart funds with a vision and the ability to carefully study the core logic of the market.
There are quite a few of them.
That is to say, in some parts of the market, the hot money and institutions that seem to be at odds with each other can still have consistent ideas and trading strategies.
For example, the previous "big infrastructure" main line, and the security lenses and consumer electronics sectors in recent days.
We can focus more on these sectors, look for synergies from differences, look for opportunities from synergies, and seek relatively certain profits. "
"Security cameras and consumer electronics?" Hearing Brother Chen's words, the other three immediately turned their attention to these two sectors. As expected, they saw that these two concept sectors were not the core focus of the market investor group. Although the trend of the related core stocks was not very consistent, the bottom of the center was constantly rising. Among them, Xu Qiao exclaimed in surprise and couldn't help but praise, "Brother Chen still has a unique vision. He can always find the real opportunities in the market."
Brother Chen smiled and said, "Local market conditions always exist, but sometimes our thinking is limited. The fundamental logic of these two sectors is strong enough, and their positions are relatively low. Institutional holdings have not yet formed a group, and hot money is also happy to speculate. Retail investors are also following suit."
"It's indeed a good opportunity." Old Wu nodded and responded, "I thought before that these two sectors were in a relationship of accompanying the trend of the main line of 'big infrastructure'. Now it seems... that's not the case. It seems that the trend of these two sectors is completely independent of the main line of 'big infrastructure'."
"It was originally a relatively independent trend." Brother Chen said, "But when it first moved, it seemed to have some connection with the main line of 'big infrastructure'. I even suspect that the 'Hua Yi Capital' institution headed by Brother Su also has a large number of holdings in the core stocks of these two sectors."
"What do you mean?" Old Wu asked in surprise.
Brother Chen responded: "I don't have any substantial evidence either, it's just a feeling."
"Brother Chen should have a lot of positions in these two sectors, right?" Lao Zhang asked, "These two sectors seem to have consumption attributes."
Brother Chen replied: "I have established some positions, but the main positions are still on the core theme of 'big infrastructure'. I estimate that the current national real estate market is so hot that even if the 'big infrastructure' line is adjusted, it is unlikely to have a large retracement. I estimate that the trend will mostly be sideways and volatile. Since the long-term underlying logic of this core theme is still strengthening, I am too lazy to adjust my positions to avoid it."
"Brother Chen still has a big picture." Xu Qiao praised, paused, and said, "Since Brother Chen is so optimistic about the trend of security lenses and consumer electronics, I will also follow up with a small position. I don't want to participate in the oversold rebound line. Without continuous short-term speculation, the tolerance rate is too low. Without the first move, it is indeed difficult to take profits."
"I'll follow up a little bit."
Old Wu thought about it carefully for a while, and agreed with the logic of what Brother Chen said, so he also responded.
As several people follow up their positions in different directions, they make appropriate adjustments to their positions...
In the two markets, as the trading time progresses, the trend has undergone drastic changes again.
Sectors related to the main line of "big infrastructure", such as real estate, building decoration, building materials, nonferrous metals, steel, coal and other previously popular sectors, are still fluctuating downward. The related hot stocks, weighted core stocks, and large funds on the market are still showing a net outflow trend.
It has formed certain expectations for going long, and has created a main line of the 'new energy industry chain' that has a certain profit-making effect on the market.
There are also related main sectors such as Internet software, film and television media, and electronic information.
Corresponding core stocks and oversold popular concept stocks with high market recognition are still actively rising, but the strength of fund following the trend and the number of stocks with daily limit have weakened compared to when the core theme sentiment of "big infrastructure" had just receded.
As for the previous decline following the main line of "big infrastructure".
The main sectors that were once related to the main trend of "big infrastructure" include medicine, liquor, white appliances, consumption, etc., where institutions are relatively concentrated.
At this time, all sectors of the "big infrastructure" main line began to generally break away from the volatile decline.
It has also experienced a restorative trend of oscillating recovery, and is gradually diverting active capital groups from the "big infrastructure" main line to the low-level oversold main line sectors.
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