Hexun Investment Advisor Mi Jiyayue: Stock indices fluctuate unpredictably, when will the existing positions shift?

We discussed yesterday that if yesterday’s market opened high and rebounded, it was passive. It brought no incremental capital, so we therefore characterized it as a contest of existing (stock) capital. As Hexun’s investment advisor Mi Jia-yue analyzed, yesterday we talked about how the market in that area has been bouncing back and forth. Then today, the major indices again came under pressure. Due to global factors, they started making trouble again—so today we also saw sell-offs from the market.

As for today, the combined trading volume of the two markets has already shrunk to around 18,000 billion, and it has been below 20,000 billion for multiple consecutive days. So the signal in the A-share market now is that once it has been below 20,000 billion for many days, and then this time forms an 18,000 billion trading volume, it means some things—for example, the broker sector. Today, the low point already reached the previous platform’s consolidation position. The technology-led semiconductor sector that it includes also reached the lower end of the earlier platform. Many sectors reached the vicinity of those earlier lows.

At this point, the support for the small- and mid-cap (SME) and ChiNext board has formed. If this support can form a show of strength tomorrow and launch a strong counterattack, producing a powerful bullish candle that engulfs (wraps around) today’s bearish candle, then this area will mark the end of a second bottoming. If it doesn’t form, then the volume below 20,000 billion may keep persisting.

So right now, we’re talking about whether this hand—the broker sector hand—can be played. We’ll see tomorrow whether it can be played. If it can, then at this point the weights (large-cap leaders) will likely resist, and the small- and mid-caps will also likely resist. If brokers take the lead and exert themselves here, that’s a high-probability event.

Because in the recent period, during all this rise and pullback, both the weights and the small- and mid-caps have been behaving reasonably. So if the weights push here, then Zhou Xiao-chuan will also push. Now the A-share market volume is gradually shrinking, and the small- and mid-cap sectors and many individual stocks are forming a continuous pattern of heavy contraction in volume. So many Zhou Xiao-… when they fall, they really can’t fall much. Because the sell pressure is in extreme exhaustion. Today’s intraday chart may show a one-way decline, but it’s not moving very fast—it’s more sluggish than rapid. And the pace and specs of downside selling across each stock are also weakening.

At this position, it’s a very critical stop. Tomorrow is very important. If tomorrow once forms a “high opening and then rebounds” pattern in this area, or a “bullish candle that engulfs a bearish candle” entity—meaning an engulfing real body—then the double top pattern here can basically be established. Over this period, everyone will be very exhausted, because it keeps tormenting you: big bullish candle today, big bearish candle tomorrow; big bullish candle today, big bearish candle tomorrow. Put simply, “20” is about going—going—going—into this year’s January. I remember it was January, or maybe which month, when after the cooling down and then after that, Zhou Xiao-chuan kept being sluggish and drifting.

Now investors’ information is relatively lacking. The float is also relatively small. After many consecutive days, it has stayed below 20,000 billion in volume. So when will this contest of stock capital actually expand into volume? As for the impact of global factors, it’s still quite serious right now. Global factors are still in a tense standoff. Investors’ confidence has been beaten up pretty badly. But at this point, I’ll say the same thing: this area could at any time become the core structure of a double bottom.

Once this area is confirmed, for the coming few months of back-and-forth, the probability is relatively high for those who are familiar with this. Tonight at 8:00, we’ll talk in greater detail on the strategies for the next stage and some of the phenomena that occurred in today’s trading action in the live stream. If no unexpected circumstances occur, tomorrow could come with a counterattack level move—an “engulfing bullish candle” level move. That would be strong. I hope it happens tomorrow. But because of global factors, a bullish-to-bearish reversal produced by global factors—this kind of bearish engulfing reversal—is basically too difficult. It may still need to be driven by itself.

Because right now, the major indices are forming a natural cycle of expectations—what people call the market bottom. It’s not supported by policy propping from above. After last year’s April 7 heavy sell-off, there was continuous volume expansion—super mainstream capital moved in. Now the “road” of liquidity is very small, and super mainstream capital isn’t taking big-scale positions yet. So the movement here is a natural bottom. Once a natural bottom forms, the counterattack’s range can therefore be large. So now many stocks are extremely volume-contracted. Once they reverse, in terms of continuity, although they may still “stir around,” the overall continuity is relatively better.

(责任编辑：王刚 HF004)

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