Rebirth of the Capital Legend

Chapter 236 'Stock Market Crash 3.0' is in progress!

After a brief pause in thinking, the entire network erupted in an extremely heated discussion of the topic.

Almost in an instant, many topics such as 'A-shares triggered the second circuit breaker', 'Thousands of stocks hit the limit down again', 'The first time in history that A-shares closed within half an hour of opening', etc., became hot searches on the entire network, breaking through the industry barriers in the financial sector, and attracting the attention of all netizens and countless people from all walks of life.

Even in a short moment, someone made a short video of the dynamic changes of A-shares from opening to closing during the day.

And named the movie 'Meltdown'.

Thus, with the rapid spread of information on the Internet, this movie "Circuit Breaker" that cost trillions of dollars began to sweep major online platforms, resonating with countless investor groups.

"More than 1700 stocks hit the limit down again. When did 'thousands of stocks hitting the limit down' become the market norm?"

Amid heated discussions across the internet, Zhao Zhiyuan said helplessly in the main speculator group of the 'Qilu Gang': "Damn it... it's really not easy to make some money. Today, a large position was buried. I worked hard for two months, but it fell back in just a few days. Sigh... it looks like the trend of the 'Stock Market Crash 3.0' version!"

"Without a doubt, this is 'Stock Market Crash 3.0'," said Zhang Wei, who holds the seat 'Wei Hai Rong Cheng Shan' in the group. "Investment sentiment in the market has completely collapsed, liquidity on the market is almost non-existent, and... the circuit breaker mechanism established by the regulator seems problematic and can easily fuel the market's momentum of selling."

Liang Jiucheng, a core member of the Qilu Gang and the sales department of Huahai Securities Jinan Lishan Road, said: "There is no doubt that there is a problem with the market circuit breaker mechanism. As long as the market declines close to the circuit breaker level, it is very easy to cause a stampede of selling by funds in the market to compete for market liquidity. In other words... this circuit breaker mechanism is simply a weapon to encourage the market to sell. If this mechanism is not changed, it seems that the market will continue to have a trend like today."

"The policy has been issued and has been running for so long, will it be revised?" Zhao Zhiyuan said with some disbelief.

"As a result, the market has erupted into a continuous liquidity crisis..." Liang Jiucheng said, "I feel that this circuit breaker mechanism will definitely be revised."

"I feel the same way," Zhang Wei said. "The key is that even the 'national team' can't hold up the market under this trend."

"How can we possibly hold up trillions of dollars of selling pressure?" Zhao Zhiyuan said.

"Let's look at the news this afternoon." Liang Jiucheng said, "The market is so tragic and public opinion is so intense, it's impossible that the regulators won't make any moves."

"I hope the circuit breaker mechanism in the market can be abolished," Zhao Zhiyuan said. "This circuit breaker mechanism is really disgusting. Once the market starts to trample, there is no room for maneuver. In fact, if it weren't for the circuit breaker mechanism, many stocks would have been able to break out of the deep V trend after the most panic emotions were vented."

"This siphon effect caused by the circuit breaker mechanism is really disgusting," Zhang Wei said. "The ecology of the domestic and foreign markets is obviously different. Some related trading systems and rules cannot be copied. Sigh... Today, the average loss per person in the market is 5 yuan. There is really no continuity at all."

"If this mechanism is not changed, the severity of 'Stock Market Crash 3.0' will far exceed the previous two rounds of stock market crashes," Liang Jiucheng said. "If the regulators do not come up with positive news today, the Shanghai Composite Index will fall below 3000 points tomorrow, and a more serious 'systemic financial crisis' may be triggered later."

"It can't be that serious, right?" Zhao Zhiyuan asked in surprise.

Liang Jiucheng responded: "I'm afraid it's more serious than I thought. Panic will continue to spread. Believe it or not, if there is no good news today, the market will open lower tomorrow and the circuit breaker will occur."

"Fuck..." Zhao Zhiyuan was frightened when he heard Liang Jiucheng's words, and said, "It seems that I was really stupid not to cut my position decisively at the beginning of the trading day today."

"If this is really 'Stock Market Crash 3.0', I'm afraid the Shanghai Composite Index won't be able to hold on to 3000 points this time," said Zhang Wei.

Liang Jiucheng responded: "There is a 90% probability that it cannot be maintained. Anyway, since the market trend has already formed like this, and the technical trend has broken through all lines, then during this period, we must control our hands and attack less. Moreover, even if we want to make a trade, we can only intervene with a light position. Otherwise, once we step on it, we will not be able to stop the loss even if we want to."

"The market sentiment is not good, and the loss effect is extremely serious. It is definitely better to take a break and short the position." Zhang Wei said, "Wait, wait until the tragic market situation is over, wait until the index continues to break through the support strength and no longer hits a new low, then we will talk about it. Sigh... I thought there would be a good market before the Spring Festival, but I didn't expect..."

"In fact, the market trend in early December was not quite right," Liang Jiucheng said. "Unfortunately, it did not attract enough attention at that time."

"So we have to say that the high premium for the 'Financial Street Fuxing Road' fund in the short-term market is justified!" Zhang Wei said, "Ever since the 'Financial Street Fuxing Road' fund started to reduce its position on the Dragon and Tiger List and stop profit on the core stocks of the 'lithium battery' main line, the market trend has taken a sharp turn for the worse. From various subsequent signs, the 'Financial Street Fuxing Road' fund should have felt the risk of market decline, the money-making effect, and the signs of weakening sentiment at that time, right?"

"There is no doubt about it," Liang Jiucheng said. "Although everyone in the industry is somewhat envious and jealous of the funds of 'Financial Street Fuxing Road', no one denies that this fund is the smartest and most powerful main force in the market, and no one denies the ability of Mr. Su of 'Financial Street Fuxing Road' to manipulate the market and create the main trend of the market."

"It seems that we have to wait until the funds of 'Financial Street Fuxing Road' appear on the Dragon and Tiger List again before we can enter the market." Zhao Zhiyuan sighed again and said, "Damn it... I will unconditionally close my position and stop loss when the market opens tomorrow."

Accompanied by the continuous discussions among the main speculators of the 'Qilu Gang'.

At the same time...

Su Yi is among the main hot money group of 'Magic City Ultra Short Gang'.

Xu Qiao, Lao Zhang, Lao Wu, Brother Chen... and others, although they were also shocked and felt that today's market trend was unexpected, they were not panicked in their hearts, nor did they feel any regret or anger. They were obviously like bystanders.

In fact, they are currently just bystanders.

Since the market triggered the circuit breaker for the first time on January 1, and the index fell through all support levels, since Su Yi's trading seat at "Financial Street Fuxing Road" was still in a short position waiting state, they also followed suit and went short, so they perfectly avoided today's extreme plunge.

"Fuck, this trend is really bloodless, luckily I'm short."

Xu Qiao felt a little scared and couldn't help but speak.

"It's really a bloodless killing. If the market keeps falling like this, I'm afraid the margin trading will be blown up on a large scale. Even many major shareholders who have pledged their shares may not be able to bear it." Lao Zhang said, "I have to say that Brother Su is really a beacon of the market. Once he goes short or holds a light position, the market will inevitably fall."

“If there is another circuit breaker, many financing positions in the market will explode directly.” said Lao Wu.

Brother Chen pondered for a moment and responded, "In fact, under the current trend, the most terrifying thing is not the collapse of margin trading, but the inability to close positions after the margin trading collapses. Coupled with the market's own circuit breaker mechanism, if the market collapses completely, the index will probably form a trend of continuous limit-down with no volume."

"That's the liquidity dilemma," said Lao Zhang.

"It's not just a liquidity crisis," Chen said. "I'm afraid it will directly trigger a 'systemic financial crisis.'"

"Next, we have to rescue the market, right?" Xu Qiao said.

Old Wu said: "We have to save the market, but the 'national team' still has a lot of positions in the market. Under this situation, I'm afraid it will be difficult to reverse the situation, right?"

"It is definitely not enough to just rely on the 'national team' to throw real money at it," said Brother Chen. "It also requires favorable cooperation from the regulatory authorities."

"Just wait and see, there will definitely be important news released today." After a pause, Brother Chen said affirmatively.

And just as Brother Chen predicted...

As public opinion on the Internet continued to ferment, the pessimism in the market was so strong that it could not be dispelled. All investor groups were already afraid to check their accounts due to the drop in prices. An emergency meeting within the regulatory authorities was quickly held after the market closed at 10 o'clock.

At the same time, some industry notices issued by regulatory authorities were quickly transmitted to major asset management institutions.

Then, sure enough, at 2 p.m.

After research and discussion, a group of leaders of the China Securities Regulatory Commission decided to suspend the market circuit breaker mechanism, which had just been introduced a few months ago, and restore the previous market trading system.

As soon as this news was released.

This means that the "circuit breaker mechanism" has become the trading system with the shortest execution time in regulatory history.

And at the moment when the regulatory authorities suspended the circuit breaker mechanism after research and discussion.

All major asset management institutions with state-owned backgrounds and securities firms' proprietary trading accounts are required not to reduce their positions maliciously or short sell through margin lending. At the same time, the opening position restrictions for stock index futures have been further tightened. The "national team" and "pension funds" have also begun to release news stating that they will not reduce any positions and will further increase their holdings of high-quality stocks in the market.

Regarding the financing that everyone is most worried about, and the crisis of equity pledge by major shareholders.

Regulators also issued instructions to further lower the forced liquidation line for margin trading.

In short, we have the experience of the stock market crash two days ago.

This time, faced with the market's continuous "thousands of stocks hitting the limit down" and circuit breakers, the regulators acted quite decisively, not only quickly overturning the trading system they had previously formulated, but also comprehensively curbing all short-selling momentum in the market.

However, all these measures and favorable measures taken by the regulators.

In the next market trend.

Still failed to reverse the market downturn.

In the following market trading hours...

The market rebounded briefly for only two trading days, just like on January 1 and January 5, and then plummeted again on January 1, directly breaking through the important mark of 6 points. The "1-point defense battle" failed completely before it could even be mobilized.

After falling below 3000 points, the Shanghai Composite Index has lost all support.

It was like falling into an abyss, and the market continued to plummet, with no end in sight, breaking through 2900 points, 2800 points...

"Fuck, this market is crazy, crazy!"

As more than half a month passed, the market had not stopped falling and the decline was getting more and more severe. At this time, inside the Shanghai'Nuoan Capital' company.

'Blue Chip Mixed Selection' fund product trading department.

Fund manager Wang Shujie stared at the net value of the fund products which had fallen to a terrible level, and he felt like crying but had no tears.

The fund product he was in charge of did not reduce its holdings immediately at the beginning of the "Stock Market Crash 3.0", but instead increased its holdings a lot.

This resulted in this fund product completely bearing the market decline during the entire "Stock Market Crash 3.0" period.

Although the fund product he manages has its major holdings mostly from blue-chip stocks, the net value drawdown caused by the continued decline still made him cry out that he could not bear it.

"Boss Wang, forcing yourself to take it is not a solution!"

Amidst Wang Shujie's scolding, Li Shangfeng, head of the fund trading team, reminded him again.

Wang Shujie sighed helplessly and said, "The Shanghai Composite Index is already approaching 2700 points. If we reduce our positions at this time... wouldn't that be cutting our losses at the bottom?"

"No one knows where the bottom of the liquidity crisis lies!" said Li Shangfeng.

He had reminded Wang Shujie several times before.

Unfortunately, after the Shanghai Composite Index fell below 3000 points and entered the so-called relatively undervalued stage, the other party did not listen at all and has been holding on until now.

"Ah..." Wang Shujie gritted his teeth, sighed again, and said, "It seems that you are right. We should not fight against the market trend, and we should not go against the trend to buy the bottom and increase our positions in the early stage of the plunge. Let's reduce our positions first. If we continue like this... this fund product we are in charge of will really break the mandatory stop loss line."

Although there is no mandatory liquidation line for public funds.

However, there are clear regulations on the mandatory stop-loss line within the company.

He originally thought that after such a sharp drop in the market, there would be a violent rebound, but unfortunately... the market trend was completely beyond his expectations.

Seeing that Wang Shujie finally gave in, Li Shangfeng nodded and quickly instructed the traders behind him to reduce their positions and stop losses.

Although this position is very likely to be reduced to the bottom.

But it is also possible that the Shanghai Composite Index will fall below 2500 points and stop halfway up the mountain.

In short, under the established trading strategy, Li Shangfeng feels that when the index and the market show no signs of stopping the decline, there is nothing wrong with not going against the trend and reducing positions in time.

And just when he was ordering traders to reduce their positions on a large scale and stop losses.

Inside Huayi Capital at this time.

Su Yi stared at the Shanghai Composite Index which was approaching 2700 points, and the still extremely brutal sell-off trend in the entire market. His eyes clearly revealed a sharp look of excitement. He felt that the time for the fund to officially build a position and enter the market had finally arrived!

(End of this chapter)