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on september 4, the market fluctuated and adjusted throughout the day, the shanghai composite index fell below 2,800 points and hit a new low, while the chinext index was relatively strong. as of the close, the shanghai composite index fell 0.67%, the shenzhen component index fell 0.51%, and the chinext index fell 0.11%.

in terms of sectors, pharmaceutical commerce, solid-state batteries, insurance, education and other sectors had the largest gains, while st sector, oil and gas, consumer electronics, non-ferrous metals and other sectors had the largest losses.

in general, more stocks fell than rose, with nearly 3,900 stocks falling in the market. the turnover of the shanghai and shenzhen stock markets today was 559.4 billion, down 21.2 billion from the previous trading day.

in today's early trading, many investors may have felt discouraged as soon as they opened their trading software.

affected by the sharp drop in the external stock market, at 9:30 in the morning, the rise and fall of individual a-shares were as follows↓

in the following dozens of minutes, individual stocks improved slightly, but the index continued to fluctuate underwater.

at 10:25, the a-share market as a whole experienced a period of upward movement, with the shenzhen index and the chinext index turning positive, with only the shanghai composite index slightly green.

(the turning point at 10:25 is very important and will be mentioned many times in this article)

but the good times didn’t last long. after only 40 minutes, the uptrend came to an end. after that, the market fluctuated and fell until the afternoon close.

why does this trend occur? in fact, just by looking at the following pictures, we can roughly find the reason.

figure 1: capital flows across the entire market

the rise and fall of stock prices is essentially the buying or selling of funds.

as shown in the figure, funds from all parties in the market mainly flowed out in the early trading session, with only institutional and major funds struggling to support the market.

around 10:25, there was a coordinated capital inflow from institutions, major players, large investors and retail investors, and the market bottomed out and rebounded.

but after 11:05, the main players, large investors and retail investors obviously turned to selling; in the afternoon, institutional funds continued to flow in, while the main players, large investors and retail investors continued to flow out; the index fluctuated and weakened, which was reasonable.

second picture: market volume forecast value

the market turnover has briefly rebounded recently, swelled to 880 billion yuan last friday, 708.2 billion yuan on monday, and 580 billion yuan on tuesday.

today's volume forecast value increased significantly compared with yesterday at the beginning of the trading session, but fell back to the 0 axis at around 10:25. after the capital flow back, the volume rebounded slightly; unfortunately, it still crossed the 0 axis in the afternoon, that is, the overall market returned to a state of shrinking volume.

some people believe that when the volume drops to 500 billion or 600 billion, the market will inevitably return to the previous state of stock game. at this time, the market has two major characteristics:

1) when the market-supporting funds are deployed, the index rises; when the funds are withdrawn, the index falls;

2) the rotation of themes is accelerating and sustainability is weakening.

in other words, a more general rule is: opportunities come when volume increases; but when you find that the market is shrinking, you should be cautious.

the third picture: broad-based etf intraday trend

many people must have known recently that market protection funds often make moves during trading, using broad-based etf products such as the csi 300 and csi 500.

in some trading software, "broad-based etfs" are also compiled into an index to reflect the overall volume and price of such products. after all, there are certain changes in which etfs and how much large funds buy every day.

as shown in the figure, the broad-based etf did increase its trading volume several times today, which is clearly consistent with the index trend, indicating that market protection funds are still watching the market.

however, judging from the daily k-line chart, the index only increased slightly in volume at the end of today's trading day, and the overall trading volume was not as good as in the previous trading days. objectively, the "market protection strength" was slightly weaker.

figure 4: schematic diagram of the “positioning” of new energy and banking sectors

recently, there are actually two forces in the market, competing for the initiative as one grows and the other declines.

some people say that this is a tug of war between bank stocks and non-bank stocks, which is not without reason.

today alone, the new energy represented by the battery sector and the high dividend represented by the banking sector showed a clear negative correlation in the early trading. as the strength of the two sectors changes, the style preference of the intraday market changes.

it is difficult to predict which side will prevail in the end, but one thing is certain:

in a shrinking market, it is difficult for both to rise simultaneously, resulting in one of the index and individual stocks always being weaker, and the "violent rebound" expected by the market is unlikely to occur.

finally, let’s take a look at the logic behind the rise of the battery sector (mainly solid-state batteries).

it was reported earlier this morning that the advanced energy storage materials and technology research group, led by researcher wu jianfei from the qingdao institute of bioenergy and process technology of the chinese academy of sciences, has developed a new lithium sulfide positive electrode material for all-solid-state lithium-sulfur batteries with an energy density of more than 600 watt-hours per kilogram.

this research provides new methods and ideas for developing high-energy-density all-solid-state batteries. compared with currently commercialized lithium-ion batteries, their energy density is more than doubled and their cost is lower. the relevant research results were published in the international academic journal small.

recently, there has been a lot of news in the solid-state battery industry. first, penghui energy announced on august 21 that it had made a major breakthrough in all-solid-state batteries, refocusing the market's attention on solid-state batteries.

on august 28, penghui energy released its first generation of solid-state batteries, saying that its core advantages are safety and cost reduction. it has achieved innovation in electrolyte wet coating technology and solved the preparation process difficulties of oxide electrolytes. the overall cost of solid-state batteries using this process is expected to be only about 15% higher than that of conventional lithium batteries.

according to a research report by citic securities, since 2024, my country's solid-state battery industry has seen marginal changes such as the launch of semi-solid mass-produced models and a 1% penetration rate of semi-solid batteries in vehicles, signaling the arrival of industrialization. my country has the advantages of low-risk technical routes, a good "small steps and fast running" rhythm, and abundant industrialization conditions, and is expected to win in the second half of the industrialization of semi-solid and all-solid-state batteries.

however, the industry generally believes that there are still many technical and manufacturing challenges in the large-scale mass production of all-solid-state batteries. recently, sun huajun, cto of byd co., ltd., said at a high-end dialogue at the 2024 world power battery conference that we still have a long way to go in the large-scale mass production of all-solid-state batteries.

"at present, we are still in the process of transformation from early laboratory to engineering. we have a lot of laboratory data and have made large batteries. as a result, we found that there are still many problems in the large-scale mass production of solid-state batteries, including engineering problems and interface problems."

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