Hexun Investment Advisor Wu Gangwei: The market shrank in volume and plunged; the only action for tomorrow, Friday, is this!

Is the late-session rally in China’s A-shares a signal that the downtrend is stabilizing? While the market fell below 3900 points, it has not actually broken through—what exactly is it trying to do? In an analysis for Hexun Securities’ investment advisory, Wu Gangwei says: Tomorrow is the last trading day before the holiday, and once again it’s time for retail investors to overthink—whether to hold stocks or stay in cash through the holiday. While you’re still in confusion, smart money has already made preparations early today. If you still haven’t realized it by now, you may be about to fall into the main force’s trap. Why am I so certain? Today’s market signals are already very clear: the market opened lower and then kept sliding, with all major indices closing in the greenless zone; stocks broadly fell; and the risk-avoidance and money-making effect was almost nonexistent. Overall market sentiment has dropped to a recent low—none of the three major indices managed to close in positive territory. Everything closed down, and the more growth-oriented and the more mid- and small-cap oriented, the harder they fell. The Shanghai Composite barely managed to hold the 3900-point integer level; it was just about to be smashed through by the shorts. The Shenzhen Component weakened in one direction, with no meaningful rebound all day. The ChiNext index sank more than 2%, becoming the weakest among today’s three major indices, and among the whole market’s more than 5,000 stocks. The number of decliners exceeded 4,300, while advancers were fewer than 1,000—close to 90% of stocks were falling. Whether you hold large-cap or mid-/small-cap stocks, or whether you’re holding previously hot sector stocks, today most people are losing money.

Many friends got trapped at the open, and they lost even more by the close. Will they still have to keep falling tomorrow? Retail investors who are trapped can only lie low, or even cut losses? First, based on the historical trading patterns in China’s A-share market: the more dismal the “Black Thursday” is—meaning the weaker the intraday price action—the higher the probability that the “Red Friday” rebound will follow. Late in the session, after an extreme slump, capital often comes in for a corrective, repair-style layout. Today’s late-session action already showed such a signal. But today is due to the outside markets being unpredictable—could it be different from before? The price-and-volume relationship during the session has already exposed the main force’s intentions. With all the doubts and worries laid out plainly today, trading volume is again at an extreme—shrinking to 1.8 trillion yuan in volume—and that also shows the market is at a critical turning point window, and it could even be about to trigger a major turning event at any moment. If you can get to this video before tomorrow’s market open, that may be the start of your turnaround in the stock market—when the财神爷 (the god of wealth) is ready to visit your home. Remember, this is absolutely not a coincidence. People without good fortune may not even be able to see this kind of thing at all. Leave a message that’s warm and lucky—so that your account turns from green to red. From here on, every day will be more prosperous and lively, fortune and good luck will keep coming. After sending you my blessings, don’t think I’m talking too much. Just tell everyone the Friday playbook in one sentence: tomorrow’s index will be a weak-style repair, and still on shrinking volume—don’t go adding positions. The reasons are just the following two points. What if there are good-news surprises during the holiday? For example, what if the outside suddenly stops fighting—then wouldn’t you miss the post-holiday moves? Zi Jing Mo You. These are the two reasons I want to say.

This is the trading value. Today, the total trading value across both Shanghai and Shenzhen markets combined was 1.84 trillion yuan—at least 160 billion yuan more than the previous day, with a very clear contraction in volume. What does that mean? It means all the capital is watching and waiting—nobody dares to move.

On one hand, the Qingming small holiday is right around the corner, and A-shares will be closed for several days. During these days, how will the overseas stock markets move? How will international developments change? Whether there will be any negative-news surprises—everything is uncertain. Big money and small money both fear getting hit, fear holding stocks through the holiday. So if they can avoid holding stocks, they avoid holding. Even if holding through the holiday is a risk, they instead stay in cash and wait. They sell early, so they can avoid being hit by a big gap down at the post-holiday open. Moreover, even if there is good news during the holiday, after the holiday the funds and sentiment will both recover—there will be opportunities. Add to that today’s market weakness: broad-based declines in individual stocks and almost no money-making effect. Everyone worries about “buying at the top of the first half of the mountain,” so there are very few buy orders. No one dares to enter, and no one dares to pick up the baton—so trading value naturally shrinks.

On the other hand, it stems from today’s A-shares opening lower and then dropping again, mainly due to the escalation in the Middle East situation. After today’s market absorbs the negative Middle East news, the impact on tomorrow’s Friday trading is limited. Instead, once the negative news is absorbed, it can turn into good news—favoring a push back by the bulls tomorrow. Layer in today’s short-side concerns about the overseas situation: the shorts that needed to exit have already exited. As for tomorrow, those funds that believe the Middle East situation will not escalate will use the final trading day to enter and gamble in the last round. If holiday news develops in a positive direction, then tomorrow’s index will most likely perform a weak-style repair, and trading volume won’t expand much. Don’t blindly add positions. Maintain my view from last week: during the rebound, keep reducing positions by subtraction—again and again.

(责任编辑：王刚 HF004)

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