Rebirth of the Capital Legend

"Isn't this strange?" Hearing Li Jinshi's surprised voice, Chen Guiyun responded, "The rise and fall of stock prices is mainly determined by the comprehensive buying power. Although institutions have bought nearly 2000 million yuan of Huaxin Cement today, the total amount of the five major seats disclosed for buying and selling still shows a net outflow. From the list data, we can see that in addition to the institutional seats, the hot money seats have sold nearly 3700 million yuan. In addition to the retail investors who followed suit and the overall performance of the main line of "big infrastructure" today, it is difficult for this check not to close sharply lower under such a combined force of funds, right?

Of course, analyzing from the perspective of institutional net buying.

We don't need to be so pessimistic about the performance of this check tomorrow and in the future.

Judging from the trends of various fund groups on today's list, the main reason for the sharp drop in the share price of "Huaxin Cement" is the collective profit-taking and reduction of positions by the short-term speculative fund groups that intervened in the early stage, while the underlying logic and fundamentals have not changed significantly.

In fact, looking at all the stocks on the two cities' list...

It can be seen that in the core theme of "big infrastructure", institutions have actually been increasing their positions and going long, with no signs of reducing their positions.

This also explains the adjustment trend of the "big infrastructure" line in recent days.

The main internal force that crashes the market still comes from hot money and retail investors who follow the trend.

This also indirectly shows that within the main line of "big infrastructure", the internal chip structure has basically not changed at present.

The institutions that have gathered together on this main line in large numbers have no plans to retreat.

Of course, this also shows that there are still not many institutional main funds willing to intervene in the GEM, SME Board, CSI 500 Index constituent stocks that are currently being hyped up by the market and the sentiment is high, as well as the constituent stocks of major hot concept sectors related to the main line of "emerging industrial chains."

Funds are gathered for speculation in these concept sectors, small and medium-sized stocks, and small and micro-cap stocks.

It is mainly the short-term active capital group in the market, that is, a large number of speculative hot money and retail investors who follow the trend.

And we all know that there is no main institutional capital group to help lock positions and funds, only hot money and retail investors gather to speculate, and only emotions dominate.

There is a big question mark about the continuity and sustainability of the market trend.

At the same time, the hype sentiment in the small and medium-sized cap and micro-cap stock sectors today is actually a bit overheated. At least compared with the recent positive news and policies in these main areas, I think it has basically fully reflected the corresponding expectations.

The following line...

If it still cannot attract a large number of institutional main capital groups waiting on and off the market to intervene.

I am afraid that the overall market trend will be difficult to continue upward and produce a general money-making effect.

After all, although today's market turnover has increased slightly compared to yesterday, the overall increase is still not enough to support the continued upward trend of the market.

I think if we want to develop a real upward trend and sustainability, we need small, medium and micro-cap stocks.

I'm afraid that in addition to the positive news and policies, some other positive stimuli are needed. Otherwise, without the main line of "big infrastructure" and the fundamental reversal of a number of stocks in the weighty main sectors such as liquor, white appliances, medicine, consumption, electricity, and finance that were previously held by institutions, as well as the expectation of future performance explosion, it is probably still difficult to form a complete transformation of the underlying chip structure.

It is also difficult to truly form an upward reversal trend, so it can only be regarded as a rebound.”

"Well, judging from the data on today's Dragon and Tiger List, the nature of the funds involved in the market, as well as the emotional feedback of the main lines in the market..." Liao Guoxiang took over and said, "The line of small and medium-sized stocks and micro-cap stocks does show some signs of overheating. I'm afraid that even if this line can still create some space in the future, the internal trend will quickly diverge.

As for the core theme of "big infrastructure"...

Take a longer-term view and start from the bottom of this round of index rebound.

It can be seen that the core main capital group within the market has indeed been trading around this line, and the main institutional funds have indeed continued to increase their positions on this line.

Although in the past two days, this line has been in a state of adjustment.

But look at the core leading stocks such as 'Oriental Yuhong', 'Conch Cement', 'Huaxin Building Materials', 'China Construction', 'Poly Real Estate', etc.

Basically, there is no obvious trend of losing money.

There is no continuous sharp decline topping trend.

At the same time, the trading volume of these stocks has also shown a shrinking trend during the short-term adjustment.

This shows that many of the main institutional funds that were concentrated in these stocks in the early stage are still waiting and locking their positions, and have not obviously left the market.

It also shows that the overall chip structure in the entire "big infrastructure" main line field has not loosened yet.

Since the overall chip structure has not loosened, the corresponding underlying logic and expectations for future performance explosion still exist.

Then the upward momentum of this core main line still exists, and it has not yet reached the point where expectations are fully fulfilled, stock prices stop rising, and the trend reverses.

Similarly, there are other weighted main-line sectors such as liquor, white goods, medicine, consumption, electricity, and finance.

It seems that these main lines have been quite weak in recent trends and have significantly underperformed the recent market index. The heat and market sentiment are also getting worse.

But if you look closely, you can still find...

A number of core leading stocks in these main areas have not seen a significant increase in trading volume in the recent adjustment trend.

'Qianzhou Moutai', 'Wuliangye', 'Huashang Bank', 'Huaguo Petroleum', 'Hengrui Medicine', 'Haitian Holdings', etc., a number of heavyweight leading stocks that are heavily supported by institutions, have not seen an increase in trading volume during recent adjustments. Not only has there been no significant increase in trading volume, but it has even shown a trend of shrinking compared to before.

This also illustrates the super-large capital that is concentrated in these core weighted leading stocks.

There is no obvious exit, and there is no plan to leave at present.

Since these super-main funds have no intention of leaving the market, it will be difficult for the market's overall investment theme style and main direction to undergo real changes.

After all, the current market is facing a situation where there is no obvious incremental capital and the incremental capital is insufficient.

It is still a situation of stock game.

When the main institutional funds that are deposited and concentrated in the weighted main lines of liquor, white appliances, medicine, consumption, electricity, and finance, as well as the main lines of "big infrastructure" do not leave the market and do not actively adjust their positions, then the small and medium-cap stocks and micro-cap stocks, which are the current core of sentiment and the center of speculation by hot money and retail investors, that is, the corresponding index component stocks such as the ChiNext, small and medium-cap stocks, and the Huazheng 500 Index.

It will be difficult to truly attract the attention of incremental funds, and there will not be so much incremental funds on the market that can be tilted towards the corresponding component stocks of these sectors.

Without the support of active position adjustment by institutions, there is no way for the hot money and retail investors to really shake the huge amount of historical locked-in orders deposited on these stocks.

Among the current constituent stocks of the ChiNext, Small and Medium Cap, and CSI 500 indices.

Supported by the recent hot speculation sentiment, many small, medium and micro-cap stocks have gradually touched upon the areas where heavy historical trapped stocks were concentrated.

The most fundamental driving force behind the rise in stock prices is the buying of funds.

It is the result of the final game between active buying and active selling.

However, these small and medium-sized and micro-cap stocks, which do not have a large amount of incremental funds in the market, see their share prices begin to touch the historical trapped stock concentration area above.

Analyze from the perspective of expectations of potential buying and selling power.

We can clearly anticipate that as the share prices of these individual stocks continue to rise, the potential buying power will gradually decrease, while the active selling power will gradually increase.

What's more, the selling pressure from profit-taking continues to accumulate during the rise in stock prices.

This potential selling pressure may be greater than we expected.

When the sentiment has spread across the board and reached its climax, if we want the market sentiment to continue to rise, we need unexpected market positives to stimulate it.

We can take a look at the fundamentals and news of the current main line of "emerging industrial chain".

What other unexpected benefits could there be?
I think that under such a fiery sentiment, when everyone has already fully expected this main line, it would be difficult for any unexpected positive news to further stimulate sentiment and further stimulate the speculation motivation of the short-term capital groups in the market.

Without this unexpected positive stimulus, the market will face potential subsequent selling pressure and the force of selling pressure from profit-taking.

The excessive emotional feedback in the market will definitely gradually subside.

When sentiment gradually recedes, the selling pressure from short-term profit-taking and previously trapped positions near the cost line will increase rapidly.

At that time, two selling forces will act at the same time.

The negative feedback effect on the disk will naturally manifest itself.

Therefore, in my opinion, the current trend of the 'emerging industrial chain' line, namely the ChiNext, SME Board, and CSI 500 Index, is probably the time to stop profits and reduce positions in a timely manner.

The core sectors include Internet software, film and television media, Internet applications, and electronic information.

Although the current sentiment feedback is good, and as a core leading stock, "Huawen Online" still has certain expectations and room for growth.

But the subsequent divergence trend is likely to be unavoidable.”

"Old Liao, what you mean is..." Li Jinshi listened to Liao Guoxiang's analysis, pondered for a moment, and responded, "The investment trend of the market is still dominated by the main line of 'big infrastructure', as well as the core main line sectors such as liquor, white appliances, medicine, consumption, electricity, and finance?
Do you think that this round of continuous surge in the main line of the "emerging industrial chain" is not a reversal, but a rebound from oversold?

Do you think that with the current market sentiment and speculation, it is still difficult to attract a large number of off-market funds to enter the market? Is it difficult to attract institutional main funds concentrated in the main line of "big infrastructure" and other weighted main line sectors such as liquor, white appliances, medicine, consumption, electricity, and finance to make large-scale adjustments?
I think that the 'emerging industrial chain' line has such a strong and general money-making effect nowadays.

There has also been a significant change in the expectations of the majority of investors in the market.

It is still possible to attract a part of the main institutional capital groups in the market, as well as the incremental capital groups waiting outside the market, to intervene in these main sectors and small-cap growth stocks.

The market value of the "emerging industrial chain" line is much smaller than the core line of "big infrastructure" and the weighted lines of liquor, white goods, medicine, consumption, electricity, and finance. The circulating market size is naturally much smaller. In other words, if we really want to leverage the "emerging industrial chain" line to reverse the market, we don't need too much incremental funds.

This is obviously different from the main line of "big infrastructure" and the main line of other heavyweights in the market.

Since this line has been leveraged, no excessive incremental funds are needed.

Then, under the continued dominance of emotions, the continuous increase in expectations, and the continuous stimulation of the money-making effect in the market, there is still a chance to reverse the trend.

And there is...

Although currently on the line of 'emerging industrial chain'.

The main nature of the holding funds comes from the large number of retail investors who are trapped in the market. The current group of funds that are actively attacking and going long are also the hot money and retail investors who follow the trend in the market.

However, it is precisely because a large number of retail investors have gathered.

Therefore, when this core theme forms a strong money-making effect, especially a continuous money-making effect, the emotional impact and expectation changes it brings are the most obvious.

Previously, the main line of "big infrastructure", as well as the main weight sectors such as liquor, white appliances, medicine, consumption, electricity, and finance, have continued to form a group of institutional main funds. Although the trend is good and has shown a continuous reversal upward trend, the voice of the market has not been enough.

Even as these core lines continue to rise.

A large number of retail investors in the market mostly made corresponding complaints.

In other words, these core themes cannot truly reverse market sentiment or the investment confidence of the majority of retail investors.

I think that only when investment confidence is truly reversed will there be a trend change in the market.

Only by using a small amount of incremental funds to leverage the main areas of small and medium-sized and micro-cap stocks, keeping the market's heat and sentiment hot, and gaining the attention of more investors both inside and outside the market, can we truly attract incremental funds and truly get out of the virtuous cycle of reversal of the general trend.

Without a reversal in investment confidence...

Relying solely on the grouping of institutional main funds, relying solely on the main line of "big infrastructure", as well as the valuation improvement and performance promotion of weighty main line sectors such as liquor, white appliances, medicine, consumption, electricity, and finance.

The market will always be stuck in the dilemma of stock inventory game, and these main sectors will continue to siphon the liquidity of small, medium and micro-cap stocks.

The liquidity of small and micro-cap stocks is getting worse and worse.

As the valuations of these small-cap stocks are compressed, it is natural that the valuations of market-weighted stocks will not rise, and naturally, it will be even more impossible to reverse the overall market trend." (End of this chapter)