Starting with a fully invested A-share portfolio to become a capital...

Chapter 63: Will the Market Continue to Deteriorate?

Monday, April 27th, only two months left until graduation.

There are no classes for investment majors this week, and the school has given students ample time to prepare their graduation theses and conduct live trading.

After having breakfast at the school cafeteria, Zhang Yang, carrying his laptop bag, walked to the commercial street outside the school.

Due to the change in the transaction method, he now needs to contact Zhong Qifeng by phone to place an order, so he no longer goes to the library.

Although the financial analysis room was sparsely populated, some students still preferred the quiet environment and studied in the study area inside.

Arriving at the "leisure cafe" where he had tiramisu with Xu Zhiruo and Xu Zhirou last time, Zhang Yang pushed open the door and entered.

Are you open for business?

Zhang Yang raised his voice to ask.

Jiang Xiangqiao, the store manager who was still wiping the bar counter, was a little surprised. Usually, there wouldn't be any students coming at this time; they would usually come after nine o'clock.

Wudong Road Commercial Street is surrounded by three universities: Shanghai University of Finance and Economics, Fudan University, and Tongji University. It mainly caters to students.

"It might take a little while. What kind of coffee would you like?" Jiang Xiangqiao looked Zhang Yang up and down, feeling that he looked somewhat familiar.

"I'd like a latte."

Would you like extra sugar?

"Need not."

"Okay, please wait a moment."

A latte is made by mixing espresso extract with two-thirds hot milk. It has a mild bitterness, so if you add sugar, it's no different from drinking sweet milk.

Zhang Yang found a secluded corner spot, trying his best not to disturb others.

Upscale coffee shops are generally equipped with charging outlets. Starbucks, in order to create its "business persona," will even deliberately hire people to work on laptops in the store and pretend to be elites.

When Jiang Xiangqiao was roasting coffee beans, she remembered who this was.

"Extroverted".

She stole a glance at the corner, then quickly looked away.

Jiang Xiangqiao knew Zhang Yang's name not because she had any special abilities, but because she overheard Zhang Yang telling the story of tiramisu that night.

To verify if it was true, she even went online to check.

After verifying that Zhang Yang's words were true, Jiang Xiangqiao adjusted the tiramisu recipe in the shop overnight, increasing the proportion of bitterness in the coffee, and paired it with the story of the Italian soldiers. As expected, it won unanimous praise from customers.

After adjusting the formula, out of curiosity, she used Xu Zhiruo and Xu Zhirou's information as the center and successfully found Zhang Yang's information on the Shanghai Campus Bar, thus knowing the latter's name.

……

Zhang Yang was unaware that Jiang Xiangqiao had investigated his information. Since there was no internet connection, he started organizing the information on the board after connecting to the coffee shop's WiFi.

The sharp correction in A-shares last week was largely due to the alternating sell-offs in the banking and securities sectors.

Why did the market crash?

The upward momentum is weak.

To put it more professionally, there are too many trapped investors above 2481 points, and profit-taking is gradually taking profits. The bulls are not strong enough and can only choose to adjust downwards, forcing those holding shares above to sell at a loss.

At this point, some people might ask: if the market is correcting downwards, aren't you afraid that the shares sold at a profit will be bought back?

Generally, profit-taking occurs when investors feel the market has reached a short-term high and is poised for a downward correction. Even if they choose to buy back in at this point, it's usually in small amounts. As for retail investors who are trapped above, seeing the break-even point within reach, they often consider reducing their positions and using reverse trading to lower their holding costs and avoid being further trapped.

This is why the market tends to adjust downwards once it loses its upward momentum; it's all about exploiting human weaknesses.

On April 26, the two sides of the Taiwan Strait signed the "Financial Cooperation Agreement," which directly benefits mainland banks, securities, futures, and insurance, thus creating the possibility for price increases.

While Zhang Yang was organizing and analyzing, Jiang Xiangqiao personally brought over a freshly made latte, smiling and saying, "Your latte is freshly made, so it might be a little hot."

"Okay, thank you."

Zhang Yang looked up and responded politely, then looked away.

"It's nothing." Before leaving, Jiang Xiangqiao glanced at Zhang Yang's laptop screen. When she saw the Huaxin Securities stock chart, she suddenly realized, "So he's trading stocks. No wonder he got up so early."

She stopped bothering them and started preparing for business with the staff who were arriving at the store.

Zhang Yang didn't care much. Right now, all he wanted to do was accumulate funds in his account as soon as possible, and then act as the market maker to hype up concepts.

……

At 9:10, close to the opening.

The FTSE China A50 futures index has already given a 0.15% increase, which is a leading indicator for the A-share market.

Why is it a leading indicator?

The full name of the FTSE China A50 futures is the Xinhua FTSE China A50 Index Futures. It is a financial derivative of the A50 Index and is listed and traded on the Singapore Exchange. The constituent stocks are the 50 stocks with the largest market capitalization in Shanghai and Shenzhen stock exchanges, accounting for nearly 33% of the total market capitalization of A-shares, covering multiple industries such as finance, energy and consumer goods.

不同于A股9点15分开盘和下午3点钟收盘，富时华国A50期货早上9点就已经开盘交易，一直到凌晨5点才停止交易，也就是说，富时华国A50期货它只有4小时的休盘时间。

Before the A-share market opens, the FTSE China A50 futures index represents the attitude of foreign investors. If it rises sharply in the early morning, it is likely to open higher the next day.

Looking at the slightly red FTSE China A50 futures index, Zhang Yang muttered to himself, "Could it be that the 'Financial Cooperation Agreement' signed over the weekend did not meet the expectations of foreign investors?"

As he pondered, it was already 9:15.

During the A-share pre-market auction, bank, securities, and insurance stocks collectively turned positive, and the FTSE China A50 futures index also surged, with everything seemingly moving in the direction of market expectations.

At this time, in the VIP research report group, people kept tagging Zhang Yang to ask for trend predictions.

[Little Potato]: The A-share market is about to open. Which sector is the group leader planning to focus on? @joker.

[Weak Water Three Thousand]: It feels like the banking and securities sectors are about to stop falling. The sudden implementation of the "Financial Cooperation Agreement" is a major positive development, and the major players can't possibly refuse to cooperate.

[Rabbit Doesn't Eat Grass]: @joker, what's the trading plan for today? Didn't you say you'd send out intraday alerts? Did you take another day off?

Zhang Yang naturally hadn't forgotten the clients of the VIP research report group, but he wasn't a god and couldn't predict the stock's movement on a single day.

Even if he is a reborn person, he only has a general understanding of some important events, such as the fact that this bull market in A-shares will last until July or August.

Asking about a single day's trend is like someone suddenly asking you what color underwear you wore 1462 days ago—who would remember such a trivial matter? You might not even have been wearing any.

However, being able to remember the approximate end time of this bull market gives Zhang Yang an advantage over others, and he is also more willing to take action.

As 9:20 arrived, the disruptive order forms disappeared, and the bank's auction market situation became somewhat unfavorable.

The volume bars above the opening price of banks such as China Construction Bank and Industrial and Commercial Bank of China are shrinking, and the intervals between the white dots in the auction are getting wider, which indicates that the bulls are still powerless.

Zhang Yang looked at the securities market again, and it was the same pattern of opening high and closing low in the pre-market auction.

"If banks and securities continue to slump, the market could be very bad today."

(End of this chapter)