news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

as september approaches, the market remains tense.

the shanghai composite index has just fallen below 2,800 points. since its high point in may, the decline has continued for four months, with a drop of more than 10%.

this is even at a time when dividend stocks, especially bank stocks, are being highly sought after.

whether in terms of time dimension or the extent of the decline, it can be said that this is a relatively tragic decline period.

when will it end? where is the long-awaited rebound?

01rise and fall, all depends on dividends

people have been complaining that the rise in the first half of this year was entirely supported by dividend stocks.

the high dividends and state-owned enterprise concepts at the beginning of the year, and later bank stocks, all provided support for the stock market to rise and prevent a rapid decline.

the performance of the four major banks can be completely seen as technology growth stocks.

however, this is also the most controversial aspect.

because success depends on bonuses, and failure also depends on bonuses.

some people have even calculated and come to the following conclusions:

excluding a few dividend-paying central state-owned enterprises, the shanghai composite index has actually fallen to 2,000 points or below.

i believe this makes sense, because everyone has seen how the index performed in the past two weeks after the dividend group collapsed.

why can’t 2900 and 2800 be sustained so quickly?

just look at the decline in bank stocks in recent days and you will understand everything.

not only bank stocks, but other chinese-character stocks and even institutional stocks in the electronic sector have shown signs of disintegration.

there are only two reasons. one is that the stock price has indeed been hyped too high. it is difficult to push it up with capital, and they are more concerned about taking profits. the second is the fund redemption wave that has been rumored in the market, and i believe this is also true.

now it seems that this collapse is still continuing, and it is hard to say when it will end, because the outside world has no idea how much they will sell before they stop.

at the very least, they will have to wait until the institutions have largely resolved the funds needed for the redemption wave before they will seriously consider rebuying.

therefore, for the sake of stability, if there is no obvious signal of stopping the decline, the dividend sector and institutional stocks should still be sold. investors should not rush in just because they think the market is cheaper than the highs.

this mentality exists among many retail investors, but it is actually quite dangerous.

because large inflows and outflows of funds are like the tide, which can submerge everything when the tide rises and take away everything when the tide recedes.

the so-called high position actually has no reference significance, and it is likely just the result of crazy capital push. if you use such a point as an anchor and imagine that this anchor is well-founded and can go up again, you are totally wrong.

we often say that when the tide rises, do nothing and wait for the tide to push you forward; when the tide ebbs, do not block the way and automatically and consciously leave a path for the tide. this is probably what it means.

02

when will the rebound occur?

theoretically, the stock market will rise if it falls too much.

a-shares have been falling for quite some time. although market sentiment remains depressed, don't be surprised if there is a big pullback or a big rebound.

the reasons are as follows:

first, on the financial side. with the recent collapse of the group, institutions must have recovered a lot of funds. although some of them will be redeemed by investors, there will still be a considerable part of them that can be used for next purchase, so the "ammunition" is actually more abundant than before. in addition, with the imminent interest rate cut in the united states, there is a high probability that liquidity will be released here as well.

second, the rmb appreciation trend is stillcompared with the previous depreciation period, chinese assets have regained some attractiveness, and overseas funds will increase their allocations to some extent.

third, the valuation is indeed cheapas mentioned earlier, excluding dividend stocks, the shanghai composite index has actually fallen to 2,000 points. at this point, the valuations of many companies are close to the single digits of historical valuations (measured in percentiles).

fourth, after the national day is the concentrated release period of q3 financial reports.if the results are very bad, the market may think that all the bad news has been released. if the results are very good, the market may think that the performance has rebounded. after all, it has been falling for so long. the market may tend to interpret the financial report in a positive way.

we can also look at the trends in the past few years. the market conditions in 2018, 2022, and 2023 were all relatively poor, but after a long period of decline, there will be a rebound of one month or several months, but the time is different.

in 2018, it continued to fall until january 2019 before it began to rebound;

in 2022, it will fall to the end of october;

it will take longer in 2023, and it will not rebound until february 2024, but there will be a small rebound at the end of october 2023.

there were some catalytic factors for the three rebounds. in 2018, the federal reserve suspended interest rate hikes, in 2022, the epidemic was relaxed, in late october 2023, it followed the rebound of u.s. stocks, and in february of this year, the national team stepped up its rescue of the market.

of course, these three times were inseparable from the rescue policies.

judging from the current situation, the period after national day is a time worth looking forward to.

because after a week-long holiday, market sentiment will be buffered and investors can calm down and think about how to operate in the future, instead of working around the clock like usual and having no time to do some in-depth thinking.

of course, this is only limited to market sentiment.

in fact, there are still many variables, mainly because the external market is in recession, and the us stock market has no economic fundamentals to support it. the only thing left is the interest rate cut. according to past experience, there will be a wave of rising prices before the interest rate cut.but when the interest rate cut is actually announced, it will trigger market concerns about economic recession, and the market will take a sharp turn for the worse.

if all the external markets are falling, but a-shares remain unaffected, the possibility of this happening is not high.

if there is no significant rebound after november 11, the next one may have to wait until the end of the year or next year.

alternatively, a-shares may suddenly experience a sharp drop, such as the shanghai composite index dropping to 2,500 or even lower in one breath, and it may be a sharp drop in a short period of time. although the process will be tragic, the advantage is that it will quickly find the bottom and then rebound.

the reason why a-shares cannot rebound or pull back quickly is that the current decline is not sudden enough to allow the market to be fully cleared. unless the market reaches a very cheap position in one breath, off-market funds naturally have no intention of entering the market quickly.

look at the two sharp declines in october 2023 and at the end of january and the beginning of february 2024. both of them fell sharply for several consecutive days, and then there was a rebound.

therefore, no matter when in the future, whether it is after national day, at the end of the year, or at the beginning of next year, if this kind of market situation really occurs, it will probably be the bottom, or the stage bottom, and we can probably expect a rebound in the next month or so.

in the current environment, there is no need to look too far ahead. as long as there is such a rebound, it is already very good. if you can have a meal of meat, just be happy.

03

the simplest trading strategy

to be honest, it is really not easy to do business nowadays.

there is too much short-term capital, hot money pricing, and the rise is all stimulated by news. the rotation is very fast, which often makes people dizzy and at a loss. what's worse is that they may lose money at any time.

therefore, if you are not a short-term expert, there is really no need to chase hot spots or trade frequently, because the gains will not outweigh the losses.

munger has a famous quote:making big money is not about buying and selling, but about waiting。

buffett is also a person who patiently waits for major opportunities. he admires baseball player ted williams because williams never swings the bat before a real good ball comes.

those who are good at defense hide under the nine earths; those who are good at attack move above the nine heavens.

he who is prepared for the unexpected will win.

the sluggish market is a good opportunity to study hard, research well, summarize well, and wait patiently for major opportunities to emerge.

of course, it is understandable that many people cannot control their hands when faced with price fluctuations every day. if you really need to do short-term trading, when dividend stocks and ai stocks are in decline, a better strategy is to find some sectors whose valuations are still at historical bottoms and have certain catalysts.

these sectors actually depend on news rather than fundamentals.

in other words, most industries are actually at the bottom, the only difference is which market is stimulated by favorable news.

for example, if there is news of a technological breakthrough in solid-state batteries, the battery sector will have a market trend; if there is news of industry mergers and acquisitions in the photovoltaic industry, it will trigger market speculation about clearing production capacity, and a market trend will emerge; if there is good news for consumer electronics, liquor, and pharmaceuticals, they will all rise.

in fact, now no matter whether it is the buyer or the seller, no one can see clearly what the main line will be next. everyone is groping in the dark, and there is no signal that the main line opportunities such as dividends and ai will soon appear.

therefore, we can see that some funds that are eager to enter the market are constantly testing their positions. liquor, medicine, photovoltaics, electric vehicles, consumer electronics, etc. are all targets for trial positions.

as for which one it is, let time tell.

as for those stocks that rise sharply one day and then fall sharply the next day, they are definitely not favored by funds. only those that continue to rise and constantly break through the k-line are favored by funds.

04

conclusion

it is almost q4. looking back at this year, the market first rose and then fell, which is very similar to last year.

this is also one of the reasons why some people expect a rebound after national day. of course, if last year's market situation is repeated, it will still fall after the rebound, and then wait for the next rebound.

because there has been no significant improvement in the macroeconomic environment, the future market is likely to show a wave-like feature, that is, after a long period of decline, there will be a pullback or a big rebound. then, wait for data verification. if the data can improve, the rebound will naturally be longer, otherwise, it will enter a downward trend again.

therefore, for future trading, just focus on swing trading.

no matter what time period in the future, if there is no particularly negative news on the macro level and there are consecutive days of sharp declines, it is very likely that the trend will bottom out in the short term.

at that time, don't hesitate, just buy at the bottom boldly.