Rebirth of the Capital Legend

After 15 minutes of violent fluctuations at the beginning of the trading session, this is what the market trend looked like.

The real estate, building decoration, building materials, nonferrous metals, steel, and coal sectors related to the main line of "big infrastructure" have been getting stronger and stronger. Among them, core popular leading stocks such as "Oriental Yuhong", "Capital Group", "Huaxin Cement", "Tianshan Cement", "Huaxin Building Materials", and "Beijiang Communications Construction" have basically achieved the extent of the sell-off at the end of yesterday's trading and have rebounded. Even "Capital Group" has directly rebounded and hit the daily limit, continuing to hit a new high.

As for the main area of ​​'oversold rebound', film and television media, Internet software, Internet applications, electronic information, and concept sectors and industry sectors related to the 'new energy industry chain' have changed from the generally high opening trend at the opening to a weak and volatile pattern in the green market.

At the same time, the A50 index constituent stocks, that is, the main weight line.

It still shows a flat and volatile trend, and the capital flow on many leading heavyweight stocks still shows a net outflow trend.

"Sure enough, it's the 'big infrastructure' line that is strong." As the trends of the two markets became clearer and continued to develop around the main line of 'big infrastructure', Xu Qiao, a member of the 'Magic City Ultra Short Gang', said with emotion, "The principle that the strong will always be strong is always appropriate. The 'oversold rebound' line really didn't show sustainability. It seems that some of the speculative short-term funds that intervened in the 'oversold rebound' line yesterday are basically taking profits and fleeing. The corresponding stocks are generally under pressure. This trend... It is very likely that many stocks on this line will have to hit new lows to stop the decline!"

"I said that the 'big infrastructure' trend is unlikely to end, and it is unlikely to adjust sharply downward, so that investors who previously had insufficient positions and missed the main trend can enter the market at a relatively low level. Sure enough..." Old Wu also said at this time, "It is indeed safer to focus on the core main line."

"Yeah." Lao Zhang nodded and said with a smile, "Fortunately, I didn't continue to increase my position on the 'oversold rebound' line. Damn...'Quantong Education' check, with such a good daily limit trend yesterday and such strong expectations, today it just didn't hit the premium and sustainability. I thought the position I entered yesterday could still earn a daily limit, but I didn't expect... not even a 3-point profit."

"It's good enough to leave with a profit." Old Wu said, "Look at the trend of the Quantong Education check now. It's already in deep water. If you, Old Zhang, hadn't sold it at a high opening, I'm afraid you should have cut your losses and left now, right?"

"Yes." Lao Zhang said, "That's why the performance of this check is far below expectations."

"The 'oversold rebound' line, whether it is the call auction or the early trading trend today, is indeed seriously below market expectations." Brother Chen also said at this time, "I originally thought that even if it is difficult to achieve sustainability for the 'oversold rebound' line, there should be an obvious opportunity to rush up and exit at a premium today. I didn't expect that... after a slightly higher opening, it directly fell into a deep-water shock."

"It really doesn't make sense." Xu Qiao said, "Looking at the K-line trends of the ChiNext Index, the China Securities 500 Index, and the All Securities 1000 Index, they are basically in an oversold state, and clearly have some characteristics of a violent rebound from the bottom. According to the pattern, there should be a sustained violent rebound, but it just can't get out of it."

"Market liquidity has been siphoned off by the 'big infrastructure' line," said Lao Wu. "If the 'oversold rebound' line is to come out and form a certain degree of sustainability, I'm afraid it will take until the 'big infrastructure' line reaches a point of huge divergence and continuous shock adjustment, when it no longer siphons liquidity from the market."

"Wasn't the 'big infrastructure' line in a state of sideways fluctuation adjustment with huge differences?" Lao Zhang wondered, "But the 'oversold rebound' line, the oversold small and micro-cap stocks in the entire market, still haven't come out of the sustained violent rebound. Not only did they not rebound, but with the adjustment of the 'big infrastructure' main line, many small and micro-cap stocks continued to hit new lows."

"The main line of 'big infrastructure' and the trend of small and micro-cap stocks in the market are not actually in conflict with each other." Brother Chen said, "On the contrary, the two are mutually reinforcing. Only when the line of 'big infrastructure' continues to develop and creates space, can the overall profitability of the market and investment risk preference be improved.

Only then can we fully attract off-market funds to enter the market and enhance market liquidity.

And only the liquidity of the market has increased.

Only then will more funds overflow from the main line of "big infrastructure" and flow into other market main lines.

Only after liquidity overflows, can the small and micro-cap concept stocks that have been oversold in the market truly have a chance to reverse. Otherwise... In the situation where the market investment style has clearly shifted towards fundamentals-driven and performance-driven, in the market of stock game, in the core theme of "big infrastructure", there are also weighted main-line stocks headed by A50 index constituent stocks, and there is no obvious bubble.

Small and micro-cap concept stocks whose valuations are obviously higher than those of blue-chip stocks with good weight, white horse performance and growth stocks with excellent fundamentals, especially those related to the Internet software, Internet applications, and film and television media sectors that were continuously hyped in the last round and whose valuations were overdrawn too much.

It is estimated that it is difficult to attract the attention of the main funds in the market and the continued construction of positions by large capital groups.

But there is no core main capital to help lock up the chips.

It is difficult to form a sustained bullish force or a sustained rebound trend if we rely solely on short-term speculative hot money and retail investors with a serious bandwagon effect! "

"Brother Chen is right." Old Wu paused and continued, "In my opinion, the main industry sectors such as 'Internet software', 'Internet applications', 'film and television media', and 'electronic information', which currently lack fundamental support, and their related concept stocks, can only reverse their trend if the liquidity of the entire market is improved, and the stock game is broken and an incremental market is entered."

"We can't always develop around the line of 'big infrastructure', right?" Lao Zhang said, "Even if it's a stock game, there is still a need for market rotation and main line switching, right?"

"Is it possible that the market rotation and main line switching will only occur between the weighted main line and the 'big infrastructure' main line?" Lao Wu said, "Looking at the preferences of the main market funds, it is obvious that with such a strong money-making effect yesterday, there was no obvious institutional funds entering the 'oversold rebound' line."

"I feel that Internet software, Internet applications, film and television media, electronic information... these major industry sectors are indeed difficult to attract the attention of the main institutional funds in the market under the current liquidity of stock games, and it is also difficult to achieve a sustained profit effect." Xu Qiao thought for a while and said, "But it is difficult for them to fall too much, right? After all, the internal chips are broken. At this position, the internal retail investors are basically all locked in. There are not many retail investors willing to sell, and the momentum of selling has been relatively weakened to the lowest."

"Well, that's true." Old Wu nodded, agreeing with Xu Qiao's statement. After a pause, he said, "I think that in terms of 'oversold rebound', the film and television media, Internet software, Internet applications, electronic information... these industry sectors will most likely maintain a weak and volatile bottom trend. In the near future, and even in the second half of the year, if we talk about the money-making effect... it will most likely revolve around the 'big infrastructure' line."

"I don't feel that optimistic." Lao Zhang said, "The current position of the 'big infrastructure' line seems to be quite high, and its driving effect on the market index is obviously weakening."

"Before entering the final main rising stage of performance realization and full realization of expectations, the divergence of the 'big infrastructure' line will definitely continue to exist." Old Wu said, "This is not surprising, and I think this trend is healthier." "Well, there is no need to think so much, right?" Xu Qiao sighed and said, "Since it is determined that the 'big infrastructure' line is the strongest and most sustainable in the current market, then just focus on this line first, and wait for the time when... this line starts to produce a continuous loss effect, and there is no rebound on the second and third days, and the trend is gradually flattening, when it forms a shock again, won't it be enough to retreat?"

"Well, what Xiao Xu said makes sense." Brother Chen said, "Eliminating the interference of side quests and focusing on the core main quest is actually a method with a higher tolerance rate."

"The key is the continuous loss effect, which can only be felt after the fact." Lao Zhang said, "Looking at the trend of Oriental Yuhong yesterday, who would have thought that it would be able to rise strongly today and form a reverse trend?"

Old Wu responded: "No one could have thought of this, but if you want certainty, you will definitely have to endure profit drawdowns, or you can't avoid chasing high prices to get chips. If you want to predict market trends and make corresponding strategies in advance, then the certainty will inevitably not be very high."

"That's right." Xu Qiao responded, "It depends on whether you want certainty or profit flexibility."

"Right now, I think certainty is more important, right?" Old Wu said. "In a bear market, blindly pursuing flexibility is the easiest way to lose money. On the contrary, it is easier to accumulate small wins into big wins."

"Small wins add up to big wins, that's a good saying." Brother Chen responded, "Only after determining the trend can we choose the corresponding trading strategy. In a bull market, the market investment risk appetite is higher, so we should naturally pursue flexibility. In a bear market, the market investment risk appetite is lower, so we should focus on pursuing certainty and lowering profit expectations.

If you think in a bull market, trade stocks in a bear market.

In other words, use a bear market mindset to trade stocks in a bull market.

It is difficult to make money there, and it is easy to get the rhythm wrong, sell the bullish stocks, and hold on to the stocks that are cut in half and get stuck. "

"Yes, yes, bull market thinking and bear market thinking, this is very important." Xu Qiao said, "I didn't change my mindset before, which led to a lot of money losses. I said... since the end of the three rounds of stock market crashes, why are Brother Su's trading strategies and investment styles so different from before.

It seems that this is what the Su brothers thought after realizing that the market has indeed entered a bear market, liquidity will only become lower and lower, and the market's investment risk appetite will also become lower and lower.

So we changed our thinking in time and made corresponding strategic adjustments. "

"Yes." Brother Chen said, "Why is it that it is difficult for many people to take away the money they made in the bull market? This is because once the bull-bear market changes, if the bull-bear mindset is not switched, then the money earned in the bull market will be quickly returned to the market with the arrival of the bear market and the continuous decline of individual stocks."

"Isn't this also called the same source of profit and loss?" Old Wu said.

Brother Chen nodded and responded, "Yes, profits and losses come from the same source. There are always very few investors in this market who can switch between bull and bear thinking. Most investors operate with a fixed mindset. However... in this market, any fixed mindset is difficult to make stable profits, because the logic of the market is always changing. In the financial market, there is no such thing as 'one trick to conquer the world'."

"Brother Chen still explained it well." Xu Qiao laughed.

"It seems that..." Lao Zhang pondered for a while during the discussion and said, "It seems that the 'oversold rebound' line is really not worth touching. Alas... It's a pity that the Oriental Yuhong check was lost due to the reduction of positions yesterday. It's not easy to recover it now."

"We should chase it back if we can," said Old Wu. "Leading stocks, especially those with hard logic, will be very resilient. Generally speaking... there is no such thing as a peak. Judging from the current trend of Oriental Yuhong, let alone a peak, it is estimated that it has not even reached the main rising stage with consistent expectations and crazy emotions."

"Looking at the volume pattern, it doesn't look like the main upward trend as expected." Xu Qiao took over and said, "On the contrary, it is still in a divergent and oscillating upward trend, and the trend continues. Of course... from the perspective of short-term logic and short-term opportunities, the strongest one on the market is obviously the 'Capital Group' check."

"I agree with that." Brother Chen said, "From the perspective of short-term logic and opportunities, the daily limit of 'Capital Group' hitting a new high today is actually a good and certain buying point. The market recognition of 'Capital Group' today is much higher than that of 'Quantong Education' yesterday."

"What a pity, I hesitated just now." Lao Zhang said, "I really didn't expect this check to be so strong."

"You're not the only one who didn't expect it." Xu Qiao said, "When I saw the check for 'Capital Group' suddenly hit the daily limit, I was also stunned for a moment, and I didn't have time to increase my position at all."

"I did place an order for 1000 million at the daily limit." Brother Chen said with a smile.

"Fuck, Brother Chen, you're awesome." Xu Qiao praised, "Your judgment of buying points and analysis of market trends are becoming more and more accurate. It seems... I have to follow you, Brother Chen, in the future."

"Don't do that." Brother Chen said, "I also made mistakes in judgment. When I lost money, I would rather follow Brother Su's seat. His seat is more stable. After all, with such a high premium, even if I buy the wrong stock, the retail investors who follow suit can still push up the stock price. With his seat, there is no need for too much good news to make the stock sustainable. At the same time, other major funds in the market also seem to like to take over Brother Su's seat."

"Brother Su's seat is not easy to follow now." Xu Qiao said, "In the market, no one is anything. Now once Brother Su's seat appears on the Dragon and Tiger List, especially the large-scale buying seat, as long as the purchased stocks are not super large-cap stocks with a scale of hundreds of billions, the next day will basically open at the daily limit. Without the channel advantage, it is usually difficult to enter even if you place a daily limit buy order."

"That's true." Old Wu nodded and said, "The premium for Brother Su's seat is getting more and more exaggerated now." (End of this chapter)