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Today, the treasury bond market fell across the board. As of the close, two creditors fell 0.14%, five creditors fell 0.34%, ten creditors fell 0.59%, and 30 creditors fell 1.11%.

Some time ago, due to the sluggish performance of the stock market, funds poured into the bond market, causing the bond market, which had been bullish for four years, to rise again.

However, after the Securities Dealers Association launched a self-discipline investigation into four rural commercial banks last week, treasury bond futures have fallen for three consecutive trading days.

The stock market and the bond market have a seesaw effect in certain periods of time, but the weakening of Treasury futures in recent days has not formed a positive feedback on the stock market.

Da Ge believes that there are several reasons, such as the fluctuations in the external market affecting the enthusiasm of stock market bulls and the decline in bulls' trading desire in the sluggish stock market.

However, if the treasury bond bull market ends, bond market funds will seek a place to go, and the A-share market is one of them. This is a medium- and long-term positive for A-shares, but the positive effect will not be immediately apparent.

Today, the turnover of the Shanghai and Shenzhen stock markets was 495.9 billion yuan, a new low in the past four years, and a decrease of 67.1 billion yuan from last Friday. The turnover of the Shanghai, Shenzhen and Beijing stock markets was only 498.8 billion yuan.

On July 31, the trading volume of the Shanghai and Shenzhen stock markets exceeded 900 billion yuan. Who would have thought that in just over a week, the trading volume would shrink to less than 500 billion yuan.

While trading was sluggish, index volatility also narrowed significantly. The Shanghai Composite Index fluctuated less than 18 points throughout the day and closed down 0.14%.

Many people say that the land volume reflects the land price. However, this rule is not a big problem in a volatile market or normal adjustment, but it may not be applicable in a falling market. Usually, there will be a land volume after the land volume.

Many people like to buy at the bottom when the market is at a low point, but they will encounter a problem, that is, whether the low point will continue.

If it cannot continue, the effect of bottom fishing will generally not be too bad; but if the freezing point continues, the subsequent bottom fishing effect will become worse and worse.

The consequence of the continuation of the freezing point is that some funds that previously tried to bottom out will be unwilling to try again.

Let’s get back to talking about the overall market.

Last Tuesday, Da Ge mentioned in "Leading stocks hit the limit down! Beware of the risk of the two major sectors reaching their peak" that a pressure point above the Shanghai Composite Index is around 2888 points.

From last Wednesday to Friday, the Shanghai Composite Index was close to 2888 points at one point during trading, but it did not break through. Today, the highest point was only 2869 points, and the bulls did not even have the courage to try to attack the pressure level.

Although the market is weak, it is still fluctuating in the range of 2845 points to 2888 points, and has been fluctuating sideways for 5 trading days. In addition, the market is at a freezing point, so it is easy to change. In terms of the current market situation, the probability of a downward change is greater.

Previously, Da Ge also emphasized that if the Shanghai Composite Index changes downward, we need to pay attention to the gains and losses of 2841 points. If 2841 points fall below, the uncertainty of the subsequent market will increase significantly. If it changes upward, at least it must break through 2888 points, which is the minimum requirement.

In terms of sectors, the sectors that are rotating up are still oversold low-level sectors, such as medicine, healthcare, media and entertainment, agriculture, forestry, animal husbandry and fishery, textiles and apparel, and environmental protection.

A feature of the recent market is that the highs are cut off at lows, and the sectors that are rotated often only last for 1-2 trading days before they are adjusted. For example, the new crown drug sector that rose today may stall in the next two days.

Previously, Da Ge emphasized that the high-cut-low rotation sector has two significant characteristics: one is that the sector is oversold and at a low level, and the other is that it is stimulated by news, driven by events, and catalyzed by policies. The environmental protection sector, which leads the industry gain list today, meets these two characteristics.

Against the backdrop of a market that is cutting highs and lows, even the better performing sectors are likely to fluctuate sideways.

For example, the pharmaceutical sector, as Da Ge mentioned last week, the pharmaceutical sector index faces pressure from the low point of April 16. Judging from the trend in the past week, it is still subject to this pressure level. Although there is a double bottom structure since July, if you want to have a better market, you need to break through this pressure level.

So, how long can the high-cutting-low phenomenon that has appeared since July last?

In order to depict the interpretation of the A-share high-cut-low market and evaluate the sustainability of the high-cut-low market, Guotou Securities constructed an A-share high-cut-low market tracking indicator based on the relative strength index of all secondary industry indexes.

When the index rises, it means that the differentiation between industries begins to increase; when the range peaks and falls back, it means that the differentiation between industries begins to narrow, that is, the high-cut-low phenomenon begins to appear. In terms of duration, the average duration of a round of high-cut-low market from the indicator touching the upper track to falling back to the lower track is 2-3 months.

By observing the fluctuation characteristics of the A-share high-cut-low market tracking indicators, SDIC Securities discovered the following rules:

After the A-share high-cut-low market tracking indicator falls back, that is, after the high-cut-low market ends, it usually means the arrival of a round of market turning point. If the high-cut-low is completed by the market's volatile decline (that is, the high-level industry makes up for the decline + the low-level industry rebounds in rotation), after the high-cut-low ends, it means that the market has reached a staged turning point (such as the second quarter of 2021, the fourth quarter of 2023).

Da Ge discovered that high-level industries were making up for their losses, while low-level industries were rebounding in rotation, which is very similar to the current market situation.

The high-cut-low market in July 2023 is close to the current macro environment. The main catalyst for the market switch at that time was the warming of expectations for stable growth policies, which promoted the further development of the high-cut-low market.

After research, Guotou Securities came to a conclusion: As for the further development of this round of high-cutting-lows, we can focus on some consumer sectors and real estate chains that have not yet rotated at low levels.

Finally, Da Ge summarizes: the market has been weak and sideways for 5 trading days. With the trading volume of the two markets shrinking to less than 500 billion yuan, a change in the market is imminent. However, even if the market changes, we still have to wait patiently before there is a definite opportunity.

(Zhang Daoda)

According to the latest regulations of relevant national departments, this note does not involve any operational suggestions and the risks of entering the market are borne by the individual.

Daily Economic News