A big drop or a big rise?

The A-share market trend today can be described as barely holding up in the morning, but in the afternoon, it simply couldn't sustain the facade and chose to plunge. It wasn't a choice; it was something that should have happened sooner to bring an early end to the adjustment. Has the adjustment of the A-share market reached its target today? Will there be a surprise tomorrow, with a sudden and significant rise? On this issue, I would like to share a few personal opinions.

Firstly, the adjustment of the A-share market has not yet concluded, and patience is required. One reason is that the decline in A-shares today was still somewhat concealed in the morning, but in the afternoon, it was no longer pretending; it was genuinely unable to maintain the pretense.

This was mainly reflected in the fact that the A-share market was still fluctuating to lure buyers in the morning, but at exactly 2 PM in the afternoon, it began to plunge. This primarily indicated that there were too many sellers in the market, mainly referring to the early group of main forces that wanted to sell in bulk. For selling to occur, there must be buyers to take the shares. Without buyers, who would take the shares? And for whom is this performance intended? The only option is to lower the price. When one party lowers the price, other market makers will follow suit, triggering a wave of price reductions.

The market display was a plunge, and the market makers were trying to see if there would be any buyers at the reduced prices. With the prices down, there was more room for maneuver, allowing for a sneak attack at the end of the day or a plunge at the close. The best outcome would be to stabilize, giving those who want to bottom-fish a reassuring pill.

Secondly, the pullback in A-shares today did not set a new low, indicating that the adjustment has not been completed. The lowest point of A-shares today was 3,173.25 points, which did not break through yesterday's low of 3,167 points. This approach has two benefits: firstly, it gives some funds that are firmly bullish confidence, allowing them to hold their shares with peace of mind; secondly, it allows those who want to buy to see hope and feel reassured to bottom-fish.

By looking comprehensively at today's trend of A-shares, it is clear that the adjustment has not ended. This trend is merely delaying the adjustment process, taking what could be done in one day and stretching it over two days. Why? Because there are really not many retail investors entering the market to take the shares. This situation is a repeat of the A-share market's trend from March to May.

This is a problem with the broader environment, not with A-shares themselves. Market makers can only extend the duration of fluctuations. If there were a real bull market, the adjustment would be rapid, substantial, and accompanied by a continuous increase in trading volume. The current situation is the exact opposite, returning to the pattern of the previous few months.Thirdly, in the half-hour of the afternoon, the main force funds were concentratedly selling their chips.

Today's artificial intelligence concept, Xin Chuang and other technology stocks completed the high pull and delivery, achieving a secondary high position delivery, which can also be considered as completing a counterattack. For the artificial intelligence concept alone, the main force funds saw a net outflow of 7.5 billion yuan, more than double the 3.5 billion yuan in the morning, indicating that the main force funds really couldn't hold on anymore. As for retail investors, why don't they buy anymore?

Let's take a look at the state-owned enterprise reform sector. In the morning, the net inflow was 11.2 billion yuan, and it sharply increased to 21.6 billion yuan by the afternoon close. The funds held by the Securities Finance Corporation increased from 3.6 billion yuan in the morning to 10.1 billion yuan, the institutional heavy positions increased from 5.4 billion yuan in the morning to 14.4 billion yuan, and the central enterprise reform increased from 4.1 billion yuan to 8.5 billion yuan. What does this indicate? It indicates that the major main forces are also selling.

The concentrated selling of main force funds indicates that they have far more chips in their hands. They will continue to distribute these chips through constant fluctuations because they hold a huge number of shares and the delivery cycle is very long.

Fourthly, today's adjustment did not touch the gap of September 30th.

This is not to say that A-shares are very strong, but it is deliberately done to make people feel that the gap has support. When they really enter the gap, these people will think it is a good opportunity to bottom fish, and the result is falling into a pit.

Secondly, what kind of trend will A-shares have tomorrow? I personally think it will still be a downward trend, because:

Firstly, the A-share market dive at the end of the day indicates that the market does not recognize the current position, which is the market expectation.

In the article at noon, I predicted that the afternoon trend would be a dive: The trend of A-shares in the afternoon is likely to be a dive, with a surprise attack at the end of the day to narrow the decline and attract a group of bottom-fishing funds, and the main force sells some chips.Why does the stock price dive? It's clearly stated above that there are too many major players selling cabbage and too few retail investors buying it. When no one is buying, one of them secretly lowers the price, and then almost all the major players start to lower their prices, leading to a dive. It's impossible to sell a large number of shares in just one or two days; it can only be done through ups and downs to clear the inventory.

Secondly, the article at noon pointed out the three major hidden dangers of A-shares at present, which are difficult to solve in the short term and must be eliminated through a pullback.

The contraction of trading volume, the absence of leading sectors, and the gap on September 30th are all important factors that constrain the current rebound of A-shares and are difficult to completely resolve in the short term. Therefore, A-shares can only be in a downward trend, delaying adjustments through fluctuations to achieve the goal of major players selling their holdings.

In other words, regardless of trading volume and leading sectors, the gap below the September 30th level must be filled as soon as possible. The longer it takes to fill, the more suspicious it is. This suspicion is clearly explained in my article.

Thirdly, the A-share market closed below 3200 points today, indicating a substantial decline.

In my article the day before yesterday, I pointed out that the A-share market would enter the range of 3150-3180 points in the short term. Today's closing within this range indicates that the market will accelerate into the gap area and begin the process of filling the gap. This process of filling the gap, as I mentioned in yesterday's article, will not be closed in one day but will be closed in stages, with the aim of continuously retreating while selling.

Fourthly, tomorrow the A-share market will test the support level at 3150 points, which is also a pretense to test the support at the upper edge of the gap on September 30th.

The upper edge of the gap is at 3153 points. The continuous performance, pretending and acting, and singing with sincerity, all aim to cover the selling and confuse investors. This is a market behavior, with no right or wrong. Retail investors come to make money, and the major players also come to make money. Retail investors cannot outplay the major players; this is a foregone conclusion.

Now many people, as soon as they see a decline, hope that the market will rebound at the end of the day, preferably with a V-shaped reversal. This is very pleasing to the major players because the retail investors in the pit have not yet climbed out, and those who most hope for a significant increase during an adjustment process are definitely retail investors.

Therefore, everyone should not fantasize about a significant rise; as long as there is no decline, it is a good thing. Because at this stage, as long as there is a decline, it will be a significant one. If we can achieve a fluctuating trend with a slight decline, we should be grateful.