Rebirth of the Capital Legend

"This morning's market trend is indeed somewhat unexpected." Next to Yu Xiaolu, Lu Xiangxiang, the product manager of the 'Jufeng Future Growth' fund, frowned and said, "Yesterday, a lot of stop-loss and sell-off chips were cleared through panic selling. I didn't expect... that after the market opened high today, it would be smashed like this."

Yu Xiaolu responded: "The market investment sentiment has not been effectively restored. The entire market's investor group is like a frightened bird. Naturally, when the market opening trend is under pressure and there is no profit effect on the market, as soon as they see the market weakening, they start to follow suit and dump the market."

"The market continued to fall in the afternoon. If yesterday's price could not hold and was effectively broken through..." Lu Xiangxiang said, "then the market trend would have completely broken through the shock platform and become a one-sided downward trend. The valuations of the major main lines related to the market will definitely be further compressed. In this case... it will be even more difficult for the 'big infrastructure' line to break through."

Yu Xiaolu responded: "I don't think it should be so pessimistic. Although the current market sentiment has indeed collapsed again, overall, in the morning's market trend, the core theme of 'big infrastructure' is still relatively resistant, and a lot of panic selling in the market yesterday has been cleared. Even if the overall sentiment is not good today, the market's potential selling momentum is not that great.

Since the momentum for selling is insufficient, the market will most likely not fall too far.

In fact, I think that the main selling pressure that suppressed the upward breakthrough of the market in today's morning session and formed an effective rebound was mostly short-term profit-taking from yesterday's bottom-fishing.

This part of funds should have been almost sold based on the morning market trend.

In other words, in the afternoon market trend, the selling pressure is unlikely to be as great as in the early morning.

Since the potential selling momentum and selling power will be weakened in the afternoon, it is not impossible for bargain hunters to intervene again and the index to form a V-shape again. "

"I hope so." Lu Xiangxiang paused and said, "Otherwise... if this position is actually broken, our previous positions will become very passive."

If the index falls below yesterday's low, it will form a unilateral downward trend.

There is no doubt that the 'big infrastructure' line will not hold up.

Then, all the chips they had previously built up in their positions will turn into losses when the main line of "big infrastructure" falls.

This is something difficult for them to accept. Of course...if the market really goes this way, then they have no choice for the time being.

After all, no corresponding strategy changes have been made before, so it is not right to reduce positions at this time.

It's no longer appropriate.

Moreover, even if they want to reduce their positions, given the size of the funds they manage, it will not be possible to complete it completely in one or two trading days.

"I don't think the stock price will actually fall below this oscillation range platform." Yu Xiaolu said firmly, "Whether the stock price fluctuates upward or downward, it needs the induction of a large number of buying and selling orders, and at present... according to my observation, the selling pressure within the major main sectors of the market is actually showing a state of exhaustion.

What's more... I don't know if you noticed, Mr. Lu, that this morning, the actual performance of the market was actually a decrease in volume.

In the market trend this morning, the amplitude of each index was larger than yesterday morning, but the trading volume was much smaller than yesterday, by nearly 300 billion.

What does this show?

At least it shows that today's market trend is caused by emotional collapse and panic selling.

Relatively speaking, the selling volume is less than yesterday, which means that there are still a lot of chips that were bought at the bottom yesterday and have settled today.

Since the internal chips are gradually settling, the potential selling force is weakening.

Then I think the index is unlikely to be at risk of a continued plunge.”

"Well, the trading volume of the two markets this morning has indeed shrunk a lot compared to the same period yesterday." Lu Xiangxiang heard Yu Xiaolu's words, compared the specific trading volume of yesterday morning and this morning, and responded, "From the perspective of the trading volume, it seems that this is more of a form of trapping shorts than yesterday."

"Yes, that's how I feel." Yu Xiaolu said, "Based on the market trend this morning, it seems to be a trap for short selling. So I think even if the market opens with a sharp drop in the afternoon, there is no need to be too pessimistic. This kind of decline in volume can easily reverse, not to mention that there is not much panic trading here."

"Okay, let's wait and see in the afternoon," Lu Xiangxiang said. "Let's see the market trend after the market opens in the afternoon, and then we can discuss the changes in specific trading strategies."

As the two discussed the market trends in the morning...

At this moment, there are great differences of opinion among several core main speculators in the 'Suzhou Group' main speculator group.

"Is this a trap to lure shorts, or is it really weakening?" asked Lao Qian in the group. "The market trend is quite bad, but the volume has not increased, and it has not broken yesterday's low. Even though there are some problems with market sentiment, it looks like... a trap to lure shorts."

"Can this be a trap to sell?" Zheng Jinming said in surprise. "If it was really strong, it should have been pulled up in the morning, forming a trend of opening high and closing high. Now it has been cut down. I think the market is weakening. Sigh... I was too hasty to increase my position in the morning. It was really wrong."

"The mood after yesterday's market closed picked up so suddenly that I had a vague feeling that today's market trend might not be so optimistic." Zhang Xinlei responded, "Sure enough, it seems that the index still does not have enough support at this position, and the market still has to look for support downwards."

"Are you really that pessimistic?" He Zhong frowned and said, "Can you stop being bearish when the market falls and bullish when the market rises? What's there to be afraid of when the market falls with shrinking volume? Yesterday, the market reversed in a V-shape with large volume, and today, the market adjusted with shrinking volume. It's obviously clearing out yesterday's short-term profit-taking. I think at this position and at this timing, we should still be optimistic and firmly bullish. And based on the trend this morning...isn't the 'big infrastructure' line quite resistant?"

"Even if there is resistance, it is difficult to support it alone." Zheng Jinming said, "Other main lines of the entire market have collapsed, and it is difficult for the 'big infrastructure' line to remain unaffected. To put it bluntly, market confidence is obviously insufficient and it is difficult to support the further development of the rebound. It seems that we can't rush to increase our positions and need to observe further."

"At this position, you either go up or down," Zhang Xinlei said, "there is no room for sideways."

"Sentiment is downward," said Lao Qian, "but fundamentals, policy expectations, and favorable news...are clearly upward. I always feel that at this time, market sentiment and stock price trends are somewhat different from their own expectations."

"When sentiment is down, it is difficult for active buying funds to participate." Zheng Jinming said, "In the end, without the help of sentiment and the stimulation of the market's money-making effect, it is difficult for the pure fundamentals, good news, and policy expectations to bring about a substantial market reversal. After all, to put it bluntly, the rise in stock prices, when it comes down to the fundamental issue, still needs the promotion of buying funds, otherwise any good news is nonsense."

"Indeed, the sentiment is down and the market lacks confidence in going long, so it is difficult to form a joint force." Zhang Xinlei responded, "It feels that the market has indeed returned to its previous trend pattern recently, sideways, down, sideways, and down again. A weak rebound is almost a luxury."

"If the main funds are not willing to go long, but recently on the Dragon and Tiger list, institutional funds have been buying and retail investors have been selling, how do you explain it?" He Zhong said, "The market ecology is definitely not comparable to last year, but it does not mean that there is no money-making effect at all. Look at the liquor, white appliances, medicine, consumption, and finance sectors. Aren't they still reaching new highs?"

"Lao He, what do the liquor, white goods, medicine, consumption, and finance sectors represent?" Zheng Jinming said, "The better the performance of these defensive main-line sectors, the higher the stock prices, the harder it will be for other fund groups in the market, the majority of retail investors, to make money. At the same time, the liquidity of other main-line stocks in the market will be worse. Apart from some major institutions and the 'national team', how many investors and active funds in the market hold the core leading stocks of these defensive main-line sectors? Basically, there are not many, right? Therefore, the rise of these defensive main-line sectors does not represent anything at all, nor does it represent the actual situation that the overall market conditions are getting worse and worse, and active buying is decreasing."

"It is certain that sectors such as liquor, white goods, medicine, consumption, and finance cannot drive the bullish sentiment and money-making effect of the entire market." Lao Qian said, "But it is obvious that the line of 'big infrastructure' can drive it, right? The current K-line shape of the core main line of 'big infrastructure' does not look like the characteristics of the top, and the housing prices in major offline cities have gone crazy. The entire domestic real estate industry chain and related industries are all in a state of explosion. It makes no sense that the stock prices of these listed companies that directly benefit from it cannot go up."

"It's not surprising that the stock price trend lags behind the changes in the industry's fundamentals," said Zhang Xinlei. "I think... we are not an institution, nor are we a fund that does long-term investment. Regardless of the core fundamentals of the 'big infrastructure' line and the future expectations, our actual focus... should still be on sentiment. If the market sentiment is good, we will be more aggressive. If the market sentiment is bad, we will just lighten our positions or take a short break. And there is no doubt... the current investment sentiment and long sentiment of the entire market are not really good."

"I agree." Zheng Jinming responded, "If you see something is not right, you should leave early and cut your losses in the afternoon."

He Zhong said: "I am still firmly optimistic. There should be no problem in doing left-side trading here. Moreover... even if the judgment is wrong, it is not too late to cut positions after the market generally falls below yesterday's low and forms a unilateral plunge. Judging from the current situation, even if the overall market investment sentiment is downward, the limited active funds left in the market are still mostly concentrated in the core main line of 'big infrastructure'.

Even if the market continues to plummet.

Even if the market liquidity continues to be scarce, the core hot stocks related to the "big infrastructure" line should not lack liquidity.

Since there is no shortage of liquidity, it is possible to withdraw at any time.

Therefore, as long as you do not hold Internet software, film and television media... these related small-cap concept stocks that have basically lost their liquidity on the market.

Instead, they hold the popular core stocks in the "big infrastructure" main line.

I think there is nothing wrong with taking a moment to plan and wait for the market trend to become more clear.

Market sentiment is... hard to tell.

Maybe in the afternoon, with a little guidance from major funds, a concentrated wave of money-making effects will be created, and the sentiment will be reversed.”

"I agree with what Lao He said." Lao Qian responded, "Mr. Su from Huayi Capital holds tens of billions of chips and is not in a hurry to sell them. Why should we be in a hurry? Moreover, according to the recent Dragon and Tiger List data, institutions are indeed continuing to buy chips in the main line of 'big infrastructure' regardless of anything. This can't be fake, right? Although our operation and trading model are different from those of institutions, we focus on the core main line of 'big infrastructure'. With a little layout, in extreme cases, it seems that we will not lose much money. On the contrary, if the market recovers and if this is indeed a trap to lure short sellers, we can reap a wave of relatively rich profits. I think the cost-effectiveness is still very good."

"It's hard to say whether Huayi Capital has sold off its shares," said Zheng Jinming. "The current operation methods of Mr. Su from Huayi Capital are completely different from before."

Lao Qian responded: "It is highly likely that there was no selling. After all, many of the stocks that Huayi Capital holds have not seen significant volume growth recently, and there have been no particularly obvious abnormal fluctuations. If he sells a large amount of his holdings, there will be no signs of it on the market."

"Whether Huayi Capital reduces its holdings or not, we all have to have our own trading model and judgment," He Zhong said. "At this point, it's really unnecessary to follow suit and stop losses. In addition, today's panic selling is significantly less than yesterday, and the momentum of the sell-off is also weaker. There's no reason to continue panicking!"

"Let's wait and see." Zhang Xinlei said, "No matter how we argue, the market trend will give us the result."

After saying this, he turned his attention back to the trading screens of the two markets.

As the few people continued to argue, the market's lunch break passed quickly.

Soon, under Zhang Xinlei's gaze, 1 o'clock in the afternoon arrived. After a brief suspension of one and a half hours, the two markets once again ushered in formal continuous bidding transactions.

After an hour and a half of emotional brewing at noon...

After the two markets reopened, without waiting for the reaction of many investors inside and outside the market, the core indicators of the Shanghai Composite Index, Shenzhen Composite Index and ChiNext Index plunged again and continued to fall for a period of time.

As the index suddenly plunged, the major main sectors and concept sectors in the two markets.

And many related concept stocks.

In the instant after the opening, under the influence of emotions, they encountered concentrated panic selling pressure, and also fell rapidly and widened the decline.