Urgent A-Share Risks: 3 Major Threats & Market Response

The A-share market played a roller coaster in the morning, with significant fluctuations and a general rise in individual stocks. For most retail investors, this is undoubtedly good news. However, the hidden dangers in the current A-share market are very obvious and have reached a serious level. The intentions of the main forces are also clear. Where should we retail investors go? Let me share my views.

Firstly, the hidden dangers in the A-share market have reached an imminent stage and are hard to sustain.

1. Today, after the A-share market opened high and surged, it quickly fell back, which is a typical pattern of raising prices to sell. In the early morning, the major forces in the market organized large-cap sectors such as insurance, securities, and oil to open high and surge. The A-share market's increase once exceeded 1%. However, the main force funds have a strong sense of time. After 10 o'clock, they dived on time. In just 40 minutes, the market index turned green. By 11:10, the net outflow of A-share main force funds reached 18 billion yuan, with the financing and securities lending sector having the largest net outflow of 12 billion yuan.

What everyone should pay attention to is that today, the main force funds of state-owned enterprise reform have a large net outflow, ranking first, reaching 11.2 billion yuan, with central enterprise reform having a net outflow of 4.1 billion yuan, and the China Securities Finance Corporation's holdings having a net outflow of 3.6 billion yuan.

The artificial intelligence concept index rose by more than 2%, but the main force funds are net outflowing 3.5 billion yuan, with institutions holding a net outflow of 6.4 billion yuan. Real estate fell by 3.28%, with a net outflow of 3.2 billion yuan.

2. There are significant hidden dangers in the trend of the A-share market, and these dangers are laying the groundwork for a sharp decline in the future.

Firstly, it is the trading volume. The trading volume of the A-share market has shrunk too quickly and cannot be further increased. It is difficult to sustain by maintaining the volume through the main force funds' group transactions within the market every day. Without the support of trading volume, it indicates that the current A-share market neither has foreign capital buying crazily nor has a wave of retail investors opening accounts. Even if they open accounts, they are also watching and waiting. The A-share market is returning to the trend before the end of September, which is a fluctuating decline.

Secondly, it is the gap on September 30th. These days, the A-share main forces continue to play the old trick after the big rebound in February this year. In the early stage of the rebound, they leave a gap and do not回踩 the important trend line, but blindly raise the index. When the trend回调, they guard these gaps and important trend lines, playing a game of falling without breaking, creating an illusion in the market that it cannot fall, and continue to attract funds to take over, achieving the goal of selling out. This is all an old trick.Once again, the securities sector has become a spent force, and A-shares are once again in a state of leaderless chaos. The previous surge was a general rise, with everyone experiencing significant gains. Stocks are just like that; when they rise too much, they will be sold. The key question is who will hold up the market to allow everyone to run?

Now, the securities sector has become a good example of helping others. If a major force wants to sell, they will first lift the securities index, but this is hard to sustain. A-shares have already lost their leading sheep, and being able to maintain a fluctuating market is already quite good.

Thirdly, I must mention the popular jargon in the current A-share market: bull market, and washing the market.

A bull market will not ignore important trend lines. It will show a bull's head turn, will break through important trend lines, and will have a sell-off, not a horizontal movement. In a relatively high horizontal movement, the purpose is to sell. Who among you has seen a bull market with three gaps below?

Who among you has seen a market washing that insists on washing above the gap? A bull market's washing will quickly fill the gap. A bull market's washing is not afraid of falling, even a big fall, mainly to break the confidence of retail investors in the market. Now, they are afraid that retail investors will run away, afraid that retail investors will not buy, just like the rebound of last year and this year. After lifting, they dare not let the index fall quickly. After a short stay, they lift again.

Secondly, based on the above analysis, combined with yesterday's forecast for today's A-share trend, I maintain my judgment that A-shares will fall today, and the reasons are sufficient:

Firstly, this is not a market wash, nor is it a momentum accumulation, but a platform for selling after lifting the price.

We can look at the 60-minute trend of the A-share market to see that the main funds have been barely maintaining a high fluctuating trend in recent days. However, the rank system of the 60-minute trend has begun to develop towards a bearish arrangement. In the short term, it will enter the gap of September 30th. To attract buying orders, the main funds will still revolve around this gap, pretending to be strong, to attract buyers.

Secondly, the current market public opinion is too dense and too single, and there is no longer a major focus, indicating that the public opinion propaganda has begun to gradually quiet down, with no novelty, and it cannot attract people.Nowadays, many self-media and institutional analysts frequently talk about foreign capital rushing into the market. However, observing from the A50 futures and the trading volume of A-shares, these public opinions seem to be self-deceptive. The trading volume of A50 futures is now similar to that of rice grains, which indicates what? It indicates that it is still domestic capital playing in the market. Is it that easy for foreign capital to enter A-shares?

Thirdly, the focus of observation in the afternoon remains on the trend of the securities sector and the changes in trading volume. Without a new leading sector to take over, there will be no increase in trading volume. If these two points do not change simultaneously, it is an inevitable trend for the A-share market to fill the gap on September 30. Everyone should pay close attention to this.

The trend of A-shares in the afternoon is likely to be a diving trend, with a surprise attack at the end of the day to narrow the decline and attract a group of bottom-fishing funds, while the main force sells some of its chips.

At the end of the article, I once again remind everyone to pay attention: As a weathervane for A-shares, the A50 futures and the Hang Seng Index have both broken through. Have a look at their trends and whether they are triplets with the A-share market? Let me add one more sentence here, be vigilant about the A-share market index becoming A50 futures and Hang Seng Index. This also indicates that the main force of A-shares is focused outside, not in A-shares. Everyone should pay attention, this is another reminder I give you as a stock commentator for the first time.

The Hang Seng Indexization of A-shares is very unfriendly to small and medium-sized stocks. If you see this trend, you should closely observe and adjust your portfolio and stocks according to market changes.