A-Share Rebound: Relief as Many Turn Bearish
- 2024-08-25
- News
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Have you noticed that the more the market rebounds, the louder the bearish voices become? What's going on? There are probably two main types of opinions:
Firstly, there are funds that feel left out by the rebound and are bearish for the sake of being bearish, completely disregarding policy direction.
Secondly, there are those who continue to maintain a bear market or bull market mindset. Some think the rebound is meaningless, while others believe it's too weak compared to the previous period, and thus remain pessimistic.
In fact, we can make a clear analysis in response to these two points:
Firstly, looking at policy direction, there is still a desire for the stock market to continue to rise. Policy benefits have indeed been supported by the market, which is why we see a rebound and rise.
This morning, many people were still debating whether it was a trap or a high-pull delivery, but after the market closed, everyone found that the rebound was stable throughout the day, and the trading volume was slightly higher than last Friday, maintaining around 1.5 trillion. This indicates that it is not a trap, but a rational rebound repair.
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Secondly, do not always compare today's rebound with the big rebound at the end of September. At that time, it was the early stage of a bull market, and everyone was queuing up to enter the market, fearing they couldn't buy in, with a very obvious herd effect.
Now, the market has experienced a sharp drop, and many people have started to invest cautiously, even daring not to enter at low points. Therefore, both the volume and sentiment are in a reasonable state.
Of course, since the requirement is for a slow bull market, we cannot expect the rise of a crazy bull market.
Although it is said that there are still several trillions of trapped positions in the A-share market, many people still lack confidence, but at least the short-term decline has been controlled, and the market's panic selling sentiment is gradually returning to calm, which is also a big progress.Before the market opens today, consider the voices that were bearish over the weekend, including those with a pessimistic attitude towards today's market. Many people are still being held hostage by "emotions." This includes many who rely too much on "short essays" from foreign websites. They believe these essays when they say expectations are not met, and they use last Friday's market crash without a rise as a reason. Isn't this a typical behavior of being harvested by foreign media?
They can use these short essays to amplify panic emotions, causing many to sell off and leave during the pullback. Then, they use stock index futures or the A50 index to maintain a long position, or even take the first step to go long in the A-share market. Many retail investors, however, are slow to react.
Especially those who use Friday's decline to say that the market has no policies that exceed expectations, how should they react when they see the market rising today? Therefore, I want to tell those investors that not all policy expectations and short essays can be known.
It is also not the case that if the policy exceeds expectations, the market must react with a big rise the day before to show that there are benefits. This year, before major policies, the market has been quiet, including before this bull market policy, the market was also very quiet. This shows that there has been some progress in the management of insider information.
Combining with the current market situation, let's talk about the overall view of the market:
1. The market has rebounded, and there are more bearish people, which is also good news for the market:
The market is rebounding, which is a good thing, indicating that after a sharp decline, there has been a technical repair, and the volume has been maintained at around 1.5 trillion, which can reflect that everyone has started to be rational and cautious, and this has also achieved the effect of cooling down the previous crazy popularity.
But does this mean the market is over?
If it really ended, then policy benefits would not be released one after another. There are still many policy details that have not been announced, the economy has not fully recovered, and the annual economic goals are still being strived for. So, the next stage is still a sprint.For the stock market, it will ultimately rise, but I have noticed that there are more bearish voices in the market.
On the one hand, some believe that 3674 points is the top of the A-shaped decline, relying solely on sentiment and technical analysis without considering changes in the situation;
On the other hand, some are frightened by the market trend, thinking about leaving the market as soon as there is a slight rebound, and maintaining a bearish view after leaving. Have you noticed the huge fluctuations in the market this morning, from a rapid rise to a dive and turning green, which prompted many people to choose to leave.
However, after leaving, the stock market instantly pulled up, which is a typical way for the main force to wash the plate;
Finally, the biggest characteristic of the early stage of a bull market is divergence. If everyone believes it is a bull market at the beginning, the bull market will not last, because our market is still a market with a high concentration of retail investors, and speculative sentiment is very strong, which is easy to turn into a mad bull market, and many people have experienced such a market.
Now is actually the stage of divergence in the bull market. At this time, it is beneficial for rational and patient people who are willing to hold stocks and wait for the market to improve. However, for people who are suspicious of investments and easily operate frequently to chase rises and kill falls, it is easy to make mistakes.
However, from the perspective of the market, the rise is actually a process from divergence to consensus. When it is really time to look up again, emotions will rise, and there will be another big divergence.
Now there are still many bearish voices, and at least it is safe in terms of operation.
2. A data from securities companies explains an important issue, how will the market trend tomorrow?
The picture comes from the Internet.Today, a piece of news from the securities brokerage sector has garnered attention. Some newly opened accounts by investors have a trading rate of less than 30%, exhibiting a very cautious style. In some brokerages, the trading rate is even less than 20%. However, the majority of these new investors have deposited funds, with over 80% having done so. What does this indicate?
Firstly, it suggests that new investors have essentially transferred their money into their accounts, representing potential incremental funds ready to enter the market.
Secondly, these new account holders have experienced the post-holiday market plunge, yet not many have dared to buy against the trend. Most have chosen to wait and see, indicating that this recent lesson in risk has been quite effective.
Thirdly, only a small fraction of people have opted to吸纳 funds during market pullbacks.
From the above, I believe we can glean some important information: the market trend can now be fairly certain to not be over.
If you analyze this from a bullish perspective, then these funds are all incremental capital that may gradually enter the market as the trend rises, so there's no need to worry about a lack of market volume.
If you analyze it from a bearish perspective, if the main players are looking to "mow the lawn" (i.e., profit off inexperienced investors), would they give up now with so many new investors' funds still on the sidelines?
According to many pessimistic theories, the so-called main force's lifting of the market is just to "mow the lawn." If the "lawns" (i.e., inexperienced investors) have not yet entered, does the market have to continue to rise until these funds are attracted into the market?
Therefore, whether from a bullish or bearish perspective, I believe it is inappropriate to say that the market trend has ended now. From my personal point of view, I estimate that the funds that dared not enter during the pullback will most likely chase in during the next big rally. This is the nature of the stock market.
Lastly, for tomorrow's market, there is a high probability that A-shares will continue to rise on Tuesday. Although it won't result in a "crazy bull" market, under the guidance of a "slow bull" market, it is highly likely that the index will rise above 3300 points tomorrow, which is to say, it will once again challenge the area above the 5-day moving average.If the market index breaks through the 5-day moving average tomorrow, it is anticipated that there will still be funds that run while the market rises, which is a normal phenomenon. This is a critical phase for washing out emotional capital, and it is not yet the time for a sustained and unrelenting bull market.
Therefore, being temporarily caught in a short-term trap can be understood as an act of buying into a trap on purpose. In the secondary market of a bull market, it is more about competing in patience and cognition rather than emotions and impulses.
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