How to view the A-share market on December 27, 2023?

Hong Kong Stocks Market Analysis and Insights

Today, as the Hong Kong stock market opens, with the return of Northbound funds, the morning session looked slightly better.

However, the trading volume is still mediocre. It remains to be seen if there will be an increase in volume in the afternoon. Overall, the market has experienced a significant decline, and investors' sentiments are extremely polarized.

Seasoned investors are unlikely to be fearful at such times. Those with some spare cash will gradually look for opportunities to position themselves. In contrast, new investors have largely lost faith in a rebound.

It’s akin to reaching a tipping point; no matter how much the market falls, the most resolute won’t waver. At most, they might stop monitoring the market and uninstall trading apps to take a break.

Those inclined to sell off might have almost been worn down to do so already, leaving behind those who are less likely to continue selling.

At most, there will be daily complaints and emotional venting.

So now, it’s about when the rebound will start.

The core indicator is the trading volume.

There was a minor rally near the end of today’s midday session, but overall there was no significant trading volume, so further observation is needed.

We need to see a volume breakout trend, preferably with a volume increase pushing the index above 3000 points, initiating a profit-making effect.

A batch of undervalued blue-chip stocks will see continuous upward trends, indicating the onset of a robust rebound.

Then we can gradually return to 3050, to 3150, and see the trend return to normal.

Without such scenarios, without volume and profit-making effects, we can’t dismiss the possibility of future oscillations around 2900 for a while.

Even if the index returns to above 3000 points without volume, there’s a chance it might fall back to around 2900.

Now is not the time to discuss whether the Shanghai Composite Index can rebound, but when a substantial rebound will be seen.

A rebound is inevitable because, from all aspects, at least a technical oversold rebound is expected.

But a weak, profitless rebound won’t make most investors money.

Perhaps only a small portion of heavyweight stocks will move, leaving most investors unable to feel the rebound.

Such a rebound isn’t worth looking forward to or being happy about.

After such a long decline, I believe what everyone truly looks forward to is at least a 15% rebound in index funds.

Many high-growth industries can have a 20%-30% rebound, and some individual stocks can rebound 30%-60%.

This is what will give investors a sense of earning and be meaningful.

The key to all this is whether it’s possible to initiate a mid-positive line with volume and profit-making effects at this time.

Without this step, it’s quite troublesome.

The Shanghai Composite Index has been hitting new lows during this period. It returned to 3000 points but without volume or profit-making effects, so it continued to make new lows.

Recently, trading days have started not to hit new lows, possibly brewing a rebound. Let’s see if there can be trading volume and profit-making effects, and watch for the emergence of new hotspots and changes in the capital market.

Otherwise, we might continue to be in a tedious situation with most stocks falling and the index around 2900.

Growth stocks, tech stocks, blue chips, scarce assets, industry leaders, and large consumption sectors—let’s see if there can be continuous rallies.

If they don’t move, the profit-making effect won’t kick in, and there won’t be much of a rebound to look forward to.

Focus for future market watching is precisely on these.

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Some Insights for New Investors

Many friends are looking for potential “big winners” to position in during these subdued market conditions.

Today, what I want to discuss with novice investors is that it’s not just about how much the stock has fallen.

Some stocks that performed best in bull markets can outperform index funds.

Either they are those whose performance has been continuously growing while the stock price adjusts with the market,

This is a clear divergence between performance and stock price. When the bull market arrives, outperforming index funds won’t be a problem.

Or the stock is significantly related to the hot spots of the bull market. Every bull market has its themes; it’s not a general uptrend.

Stocks within the main themes can outperform index funds, while most others probably won’t.

These are critical thinking points.

If a stock is quite ordinary and its performance hasn’t grown over the years, then such a stock, when the bull market comes, might rise but definitely won’t perform as well as index funds.

Index funds, after all, tend to outperform over 70% of stocks and are more stable.

The remaining stocks that can outperform index funds are definitely notable in performance or related to market hot spots.

Only then can they yield exceptionally high returns in a bull market, so diversified layout + high-prosperity industries + index funds + performance selection

These are all extremely important. Don’t make random choices.

Because many people always feel the return on index funds is low, they want to pick some stocks to speculate.

Then you must consider performance, industry prosperity, and how many hotspots there are.

Otherwise, after being tormented by a bear market for so long, when the bull market comes, you still won’t make much money, not even outperforming index funds.

That would be very regrettable because bull markets are brief, possibly just 1-2 years, followed by 3-5 years of bear market.

Missing it means enduring a long period of hardship.

A typical example is in 2018 when many stocks were falling fiercely. But many had rapidly growing earnings, creating obvious undervaluation and wrongful reductions.

They indeed performed very well later, yielding much higher returns than index funds after enduring the bear market.

This is the profit point of valuation repair in earnings growth during a bull market.

Not understanding financial statements is okay; keeping up with hot spots is also a strategy.

In the last round of structural market trends, semiconductors and new energy were very strong.

Many stocks without much performance still rose 5 to 10 times in a bull market.

This is the theme of a bull market, hot spots, for those who like short-term speculation and don’t have strong financial analysis skills.

But you can’t predict these in advance; every bull market has different hot spots.

If you’re positioning now, it’s about diversification, just a little in various high-prosperity industries.

When the bull market comes and the main trend is very clear, then increase the position in the main trend.

Bull markets are swift and precious. A-shares fall grindingly but rise too quickly.

So there’s not much time for regret or correction; you must be sure about your choices from the start.

Index fund as a safety net + high-performing undervalued companies for excess returns + betting on mainline industries for even higher returns

Plan an investment portfolio in advance with this thinking, starting to position in index funds early.

Many people, even when the bull market comes or is already in its later stages, won’t realize it.

Because they haven’t prepared in advance, their choices are weak, and they don’t pay attention to what else is happening in the market.

So they miss the bull market entirely, unaware of its passing.

It’s better to invest in index funds in such cases. Although weak in bear markets, you don’t need to trade much in bull markets; just hold and don’t act rashly.

This is a more suitable bull market hunting strategy for most ordinary investors.

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Thanks for the Likes

Persisting in doing something year after year is tough, and without your support, it’s hard to maintain the passion for creation.

Wish everyone makes money and lives happily!

Let’s pause here for now and continue later.

Today marks the 1053rd day of persisting in writing market analysis notes【Daily Check-In】

Hope to meet more like-minded friends here, learning and growing together every day.

Remember: When greed arises, all thoughts turn to ash!

Control the risks, and profits will follow.

Risk Reminder: Investing involves risks, enter the market cautiously!

Do not invest blindly or impulsively.

Make scientific and rational investment decisions based on your overall situation and specific market conditions.

Regularly educate yourself to enrich your investment knowledge.

Wish everyone health, happiness, freedom, and profit.

Three Types of Traders with Different Approaches

Type 1: Chart Trend Followers

I am one of them, the chart trend followers. We have an idea that works until the charts change, and we don’t need to talk about it every day.

For example, take the Shanghai Composite Index (SSE 50). When the weekly chart’s fifth segment is in a downtrend, both the strokes and MACD green bars are in their fifth segment. Currently, the hourly structure is converging.

Even if it dips slightly to a new low, I will continue to go long here. Perhaps on a lower time frame, I’ll try to avoid short-term risks, but I will definitely capitalize on the buy points that converge on the 2nd and 3rd levels of the five-minute chart.

Why? Because this is the fifth segment of the weekly chart, near the support level from five years ago.

Is this a viewpoint?

Yes and no. Essentially, it’s a behavioral pattern.

Type 2: Fundamental Traders

These traders rely on fundamental analysis. They don’t need to discuss their thoughts for today, tomorrow, or the day after unless something fundamental, like the sinking of a US aircraft carrier in the Red Sea, warrants a change in their views.

Otherwise, changing views every day doesn’t qualify as fundamental analysis.

Type 3: Ultra Short-term Traders

These traders have a mature behavioral pattern and a trigger signal system. In fact, they can be said to never have any views.

Of course, there is also another type of person who has a ton of views to share every day.

You can simply not consider them as traders because they are most likely inexperienced.

Today’s Position: Fully Invested

Today’s position is fully invested.

Total trading volume across both markets is 651.2 billion yuan, with a net inflow of 5.678 billion yuan from Northbound funds.

There’s not much to say. Today’s market movement is largely in line with my expectations and my criteria for adding positions. So, I’ve gone all in for now. If it goes down from here, I won’t bother making changes. With only two trading days left in December, the likelihood of December ending with a bearish trend is quite high. I’ll consider reducing my positions after at least riding the rebound that comes after.

There’s not much else to discuss. Even if it continues to decline, I can still afford it.

Some people say my trading style is different from before. That’s because the current market situation is something I haven’t seen since 2018. In extraordinary times, you need to take extraordinary measures. Right now, I see extreme pessimism among most investors, so I’m going against the crowd.

When I was heavily short at high levels, there were plenty of critics. Now, at this fully invested position, the same critics are coming out. I don’t care. I’m just objectively presenting my review and actions. The worst thing you can do in stock trading is letting others' emotions influence you.

Now, let’s continue discussing sectors:

Pork (Pig Meat Industry):

For reference, you can look at the non-ferrous metals sector as they both belong to cyclical industries. Pork might be a bit stronger, and currently, it’s relatively low in the long term. If you want to invest, 2024 should be relatively safe.

Green Energy:

When it comes to green energy, we have advanced technology, but in 2024, the global economy is not looking good. The Houthi rebels have also blocked the Suez Canal again, so the cost of living in Europe is likely to rise. In good economic times, we talk about environmental protection and new energy sources, but when the economy is not doing well, who cares? They’ll continue to burn coal. So, I don’t think there’s a significant opportunity for green energy in 2024. However, this sector is oversold, and there might be a monthly oversold rebound.

Tourism and Hotels:

Post-pandemic, tourism has already seen significant recovery this year. So, I’m not particularly optimistic about next year. However, unlike other sectors, this one doesn’t experience sudden spikes and crashes. Even if it goes down, it’s more likely to be a steady decline with fluctuations, making it suitable for medium-term trading.

Artificial Intelligence:

I’m not very bullish on this sector in 2024, mainly due to high uncertainty. Unless there’s some explosive news to stimulate it, this sector is likely to be one of those with more trap opportunities.

Food Processing and Manufacturing:

This sector has been in a long-term consolidation and has faded from people’s view. However, I believe there might be a good trend in this sector in 2024.

Tomorrow’s Plan: Hold the Fully Invested Position

My plan for tomorrow is to hold the fully invested position. I will only announce the specific sectors I am holding in the public account.

This article is reposted from the public account: Meirui and Xiaoa

Please refrain from asking for specific stock recommendations in the comments section. For stock-related queries, please use paid consulting services.

Market Analysis - Similar to What Was Said in the Morning

Under the influence of the semiconductor sector’s strong opening, today’s A-shares have seen incremental gains.

The market opened with mixed candles, both green and red. In all likelihood, the daily chart will close as a small bearish to neutral candlestick, provided it doesn’t turn positive by surpassing the highs of the previous three candles.

However, just like yesterday, most of the low-valuation weighted stocks opened with small green or red candles.

So, there’s still a chance for the Shanghai Composite to close positively, even if it doesn’t surpass the highs of the previous three candles.

A strong reversal signal would be surpassing the highs of the previous three candles, either at the time of doing so or with substantial volume afterward.

A weakening signal would be failing to maintain the levels above the lows of the previous three candles after a drop below them.

The ChiNext Index opened with red candles.

Most likely, the daily chart will close as a neutral to bearish candlestick.

The condition for a reversal to small green or red candles is surpassing the highs of the previous three candles.

The primary reason for this kind of opening is that the top-weighted electrical equipment sector opened with red candles.

However, due to the second-weighted healthcare sector’s small green or red opening,

it’s possible that top-weighted East Money will attempt a downward move with volume.

Also, if top-weighted Wens Food sees substantial volume surpassing the highs of the previous three candles during the day, there’s a chance for the ChiNext Index to close positively.

Currently, the structure suggests that the semiconductor sector is leading the market, with electronic components and IT equipment following suit.

Yesterday, the semiconductor sector had the highest drop percentage.

So, the market is still in a rotational repair pattern.

With this structure, the probability of intraday market oscillation is higher.

Insights from the Opening on December 27, 2023

East Money’s attempt to push down with volume has been successful.

Wens Food continues to see substantial volume during the day.

A more detailed analysis will be provided in the evening review.

Time to Be Optimistic!

“If every Chinese person consumes paper at the rate of the United States today, by 2030, 1.46 billion Chinese would require twice the world’s current annual paper production. This would lead to the depletion of forests worldwide.” - An American environmentalist in 2008

Is the logic here flawed? Not really. However, as of 2023, it’s clear that these concerns won’t become a reality.

Firstly, by 2030, we are unlikely to have a population of 1.46 billion as China’s total population has already started to decline in 2022.

Secondly, besides wood pulp, paper can also be sourced from grass pulp and waste paper pulp. In 2022, China’s waste paper pulp accounted for 57% of the total pulp consumption.

Lastly, and most importantly, technological advancements are driving the acceleration of the digital age, leading to a rapid decline in paper consumption in various fields like media, literature, and office work.

Pessimists may gain reputation, but they cannot secure the future. Throughout human history, numerous pessimistic predictions of world-ending events have garnered significant attention, yet none of them have come true.

The reason is that pessimistic logic often relies on linear extrapolation from the past and the present, whereas the evolution of the future is non-linear and filled with chance and unpredictability. Just like in evolution, these chance events and accidents with positive outcomes are identified and amplified, propelling human society to thrive and progress, avoiding the apocalyptic fate predicted by pessimists.

In “The Rational Optimist,” author Matt Ridley commented that roughly every decade, a new wave of pessimists emerges, confidently claiming to stand at the tipping point of history. Even during the 50-year period from 1875 to 1925 when new inventions like electricity, automobiles, typewriters, movies, universities, indoor plumbing, and vaccines significantly improved the lives of Europeans, many European scholars remained fixated on predictions of decline, decadence, and catastrophe.

Evidence from biology suggests that pessimistic genes are more common than optimistic genes. Only 20% of people have the dominant allele for the serotonin transporter gene, which predisposes them to a naturally optimistic outlook. Evidence from psychology shows that most people are risk-averse, requiring twice the potential gains to compensate for a one-unit loss.

Perhaps during human evolution, genes predisposed to optimism were more easily eliminated in harsh survival environments, which is why our ancestors passed down a predominance of pessimistic genes. After all, in the face of survival, the cost of having pessimistic expectations not come true was negligible. Even if you misjudged ten times, being right once was sufficient.

However, in the field of investment, having a genetic predisposition towards pessimism can act as a hindrance rather than an advantage. Because in the medium to long term, the economy continues to grow, and the stock market continues to rise, time is on the side of optimists.

In the long run, markets go up, but in the short run, there are setbacks. Optimistic investors can withstand short-term fluctuations by focusing on their optimistic long-term outlook. Pessimistic investors may choose to exit at the bottom of every bear market, only to miss out on opportunities just before dawn.

At this point, many investors might be tempted to use the past two years' data as evidence.

Indeed, over the past two years, pessimistic investors have better protected their wallets, while optimistic investors have been trapped in one bottom-picking situation after another. Many investors, battered by the market and constantly shifting between optimism and pessimism, have now collectively tilted towards pessimism.

Recently, I’ve been thinking, with market valuations already so low, who is still selling at this point?

Initially, my conclusion was that it’s mostly forced sellers. However, I later realized that it might be more than that. Most people are either selling or watching, and pessimism and selling have, to some extent, become a trend and the “correct” choice.

In the investment field, one should be cautious of trends and what’s considered “correct.” Public consensus rarely leads to profitable outcomes because consensus tends to push valuations to extremes, be it extremely high or extremely low. Following the crowd during such times is usually a mistake.

At this stage, pessimism has become a trend. Under this trend, contrarian buying becomes the right approach. As Howard Marks put it, “Widespread negative opinions can make risks minimal because all the optimism has already been removed from prices.”

So, there’s no need to use the past two years' market conditions to justify the reasonableness of pessimism. It’s precisely because of the recent unfavorable market conditions that pessimism has become the consensus among investors, leading to continually reduced risks in stock investing and increasingly favorable risk-reward ratios.

Investing requires looking forward, focusing on the long term. In the long term, the trend is always upward. When a trend continues for a long time, a reversal becomes inevitable.

Many times, it’s difficult to determine when a trend will reverse or what factors will lead to the reversal. The only thing investors can do is to remain vigilant, adjust their behavior, and resist conforming to the erroneous actions induced by market consensus. With the courage to go against the trend, making money is only a matter of time.

So, at this moment, dare to be an optimist!

After breaking below 2900, there’s no need to be overly pessimistic.

Every rebound is to harvest more leeks tomorrow.

Year-end Trading Analysis:

Today is the third to last trading day of 2023, and December has already formed a significant bearish trend. The morning market has remained sluggish, with all indicators in the red. Domestic capital is still not entering the market and continues to flow out in large quantities.

Will there be a year-end rally in the next few days? Clearly, most people no longer believe in it, although there might be a strong positive closing on the last day, which is Friday.

Looking at the situation from the morning, there were 3,404 declining stocks, which is slightly better than yesterday. All three major indexes are in the red, and trading volume continues to shrink. Remember that trading volume was in the 6,000 range yesterday, and it is still shrinking. The outlook for the afternoon does not look optimistic. Let’s hope that there will be funds entering the market to buy and push up prices in the afternoon. It’s the last three days, and staying in the red all the way doesn’t seem justifiable.

At 11:01 AM, there was a brief uptick, but it quickly retreated. The market has been up and down, which could be a good signal indicating that the market is attempting to break through bit by bit. In the afternoon, there might be a real reversal. After continuous declines for so many days, in the last three days, there should be some rebound.

Regarding sector performance:

Out of 76 sectors, 58 were in decline, and 18 were in the green. The situation seems to have improved compared to yesterday.

The top-performing sectors include Communication Services, Computer Equipment, Semiconductors, Computer Applications, Optoelectronics, Aquaculture, Black Household Appliances, Consumer Electronics, and Electronic Chemicals. Among them, Longyu Stock, Zhiwei Intelligent, Xinhai Technology, Zhizhen Technology, and Asia Pacific Optics all hit the daily limit.

The sectors with the most net outflows in the morning were Power Equipment, Media, Securities, Automobiles, Nonferrous Metals, Automobile Parts, Chemical Raw Materials, Building Decoration, Environmental Protection, Logistics, General Equipment, and Real Estate Development. It’s worth mentioning that the media sector continued to decline collectively, with another large outflow. The regulatory approach to the gaming sector has had a significant impact, and it’s not over yet. Additionally, the securities sector has fallen further, approaching the low point in June 2023.

In summary: There is currently no sign of government intervention to support the market, trading volume has not picked up, and domestic capital is still flowing out. Let’s hope for a strong rebound in the afternoon; otherwise, this frustrating market sentiment is affecting the year-end sentiment.

Evening Review on December 27th: Northbound Capital Buying the Dip! A-shares Urgently Need a Bullish Candlestick

Today, there is good news, but it still cannot change the overall weakness of the market. Restricted shares cannot be used for margin financing and securities lending. This can be considered a response to the demands of the majority of investors. While this policy may have a certain impact on brokerage stocks, it is undeniably positive for the overall market.

Friends, it’s still advisable to watch more and act less. We’ll enter the market when we see significant bullish candlesticks. Small retail investors should refrain from rushing in.

Market Review on December 27, 2023

01 Market:

Looking at the indices, today can be described as a low opening followed by volatile recovery, essentially a oscillatory trend, although the amplitude was larger than before. The market’s trading volume was slightly higher today, as foreign capital has returned. From a technical perspective, it’s still not appropriate to make too many judgments. In terms of market sentiment, today’s sentiment is expected to be better than yesterday. It’s a day for large-cap, mid-cap, and small-cap stocks to perform, and the sentiment is better than the past two days. Let’s not dwell on the rest of it to avoid affecting everyone’s mentality. At the moment, speculative activities are relatively limited.

02 Sectors:

In terms of sectors, today saw positive performances in small-cap stocks and specific sectors, such as software, semiconductors, and media, which showed relative strength. The only underperforming sector was new energy. In terms of heavyweight sectors, consumer and finance exhibited synchronous movements today, but with low trading volumes, which does not constitute a sign of ending the bear market. Mid-cap stocks, such as steel, non-ferrous metals, and coal, were relatively active and strong. Defense and healthcare also showed signs of strength, possibly due to market sentiment. From a technical perspective, we won’t delve too much. Focus remains on large-cap and small-cap stocks. Currently, attention should be on the large-cap side, while small-cap stocks may have technical demand for a rebound, the outlook is not too favorable, so it is not recommended to participate.

03 Operations:

For regular investment portfolios, stick to the rules and don’t be too concerned about short-term speculative analysis.

For speculative trades, intraday speculative trades can be considered today as the signals are relatively standard, and volatility is higher than the past few days. As for speculative trades beyond the day, it is advisable to continue waiting for a clearer market structure, larger trading volumes, and more obvious signals.

Market Review on December 27, 2023

01 Market:

Foreign capital returned to work today, injecting 5.7 billion yuan, finally bringing in domestic capital, resulting in a barely positive close. However, the trading volume remains at only 640 billion yuan, slightly lackluster.

Yesterday, after writing the article, I could feel that the market’s sentiment was truly collapsing. I received many comments saying that this time is different, this time is unique, and asking about the real estate market and foreign capital abandoning China.

When more and more people start saying that this time is different, it signifies that the majority of funds still active in the stock market have turned bearish. Consequently, most of the risk has been released. I think there’s not much to worry about because the ultimate ghost story is always “this time is different.”

Value investing has a saying: “Prices fluctuate around value.” In reality, when the market enters an extreme bull or bear market, prices have long since detached from fundamental factors. At this point, the market is entirely influenced by the greed or panic of its participants, and discussing fundamentals becomes meaningless.

So, in situations like the current extreme market, don’t believe in fundamental differences here or there. Prices have already disconnected from fundamentals long ago. You just need to believe that human nature remains the same.

As for whether it’s a rebound or a reversal, some institutions believe that the year-end funding situation may be tight, and the market may have to wait until early next year.

However, it’s hard to say for sure. On the one hand, the central bank has been injecting liquidity into the market recently. On the other hand, everyone knows about it, so they can choose to act ahead of time, turning it into a short-term game.

I don’t participate in this game. Since I know that the market is at an absolute bottom now, a reversal is naturally good, and if it doesn’t reverse, I won’t engage in short-term trading.

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Also uncertain about whether it’s a rebound or a reversal is the computing power leasing sector. This sector saw a comprehensive rise today, with Lianhua Health hitting the limit up. Lianhua Health is a thematic stock, so it represents more of the emotional aspect.

From the perspective of adjustment time, it seems that this sector’s adjustment time is not long enough yet. Today, it was mainly catalyzed by news as five departments jointly issued the “Implementation Opinions on Deepening the Implementation of the ‘East Calculation and West Algorithm’ Project to Accelerate the Construction of a National Integrated Computing Power Network.”

A mere document doesn’t have a significant impact. We mainly need to see if there is any progress at the industry level.

Other News:

1. China TransInfo’s Performance Forecast. It is expected to achieve revenue of CNY 62.122 billion in 2023 (YoY +33.32%) and a net profit attributable to the parent company of CNY 5.493 billion (YoY +121.15%).

As a leading company in overseas low-end mobile phones, its growth rate is not high, less than 20%, with a valuation around 20 times earnings. It increased with AI in the first half of the year, but its performance was not significantly affected by AI. However, with the backdrop of RMB appreciation next year, whether its performance can continue to grow as it did this year with RMB depreciation needs observation. Overall, I don’t see many highlights.

2. Deye’s Fundamental Situation. The housing savings sector has performed relatively well recently, partly because it has fallen a lot, and valuations have reached a very low level. In addition, the rise in natural gas prices due to the Red Sea situation has been digested well, and the inventory situation in Europe has improved marginally.

Housing savings can be said to have digested last year’s high expectations. Most of the risks have been released, but the European market is already competitive, and the overall prosperity of the sector is declining. It is unlikely to become the leading market in the future.

3. China International Travel Service (CITS) signed a supplementary agreement with Shanghai Airport and Beijing Capital Airport, reducing rental costs. CITS’s competitive landscape has deteriorated, and the current state of the consumer industry is not very favorable, so there’s not much to say about it.

What I want to mention is Shanghai Airport. During the period of losses during the epidemic, Shanghai Airport’s stock price was still good, but after it opened up, profits gradually began to recover, and its stock price fell to a new low. On the one hand, it may be that funds were gambling on opening up during the epidemic, supporting Shanghai Airport’s stock price. On the other hand, recently, the market has not been friendly to large-cap stocks and institutions' heavily weighted stocks.

However, Shanghai Airport’s valuation is already relatively low. If its performance returns to the 2018 level next year, the valuation is already less than 20 times earnings. The long-term barriers of Shanghai Airport have not changed, and it still has the advantage of high-consumption passenger traffic. For long-term (3-5 years) deep value investors, it should now be starting to have value.

4. CITIC’s Top 10 Predictions for 2024. There’s a joke that CITIC’s top 10 predictions for 2023 were all wrong. Predictions are inherently unreliable; it’s mainly about tracking and responding. For reference only.

Follow the public account: Zero-Based Investment. Logic, viewpoints, information, live trading – welcome to follow.

Live Trading (for reference only, not investment advice)

No operations today, +90,000 CNY, position 240%, down 350,000 CNY for the year 2023.

Market Review on December 26, 2023

Market Summary:

The market always appears in disappointment! Today, the brokerage sector’s abnormal surge reversed the weakness of A-shares, but unfortunately, it still couldn’t make significant gains, indicating insufficient upward momentum.

Despite a higher opening and gains in the Hong Kong stock market today, the abnormal surge in the brokerage sector, A-shares have not yet escaped from their weak bottoming process. Why is this happening? How should we interpret it?

Firstly: A-shares are fundamentally unable to make significant gains. Under various pressures, despite the global stock market’s rise, A-shares can only maintain weak and oscillatory movements. This is due to significant selling pressure within the market, and each rally is intended to provide better opportunities for selling at higher prices. Therefore, the significant selling pressure within the market is the main reason A-shares couldn’t surge today.

Secondly: The abnormal surge in the brokerage sector is a tactic to lure in more investors, sending a signal to the market and investors that says “don’t leave just yet.” It also attracts some bottom-fishing funds and prepares for large funds to sell at higher levels. This is the purpose behind the abnormal surge in the brokerage sector.

Thirdly: Foreign capital is bottom-fishing while main funds are cashing out! As long as main funds are still active, A-shares will continue to decline. Regardless of whether A-shares are rising or falling, main funds are net sellers every day. Similar to today, even with a slight inflow of foreign capital, main funds were still selling nearly tens of billions, suppressing the market and causing it to rise and then fall.

Fourthly: A-shares' bottom-fishing market is not over yet; the grinding bottoming process continues. The Shanghai Composite at 2882 points is not the true bottom. Therefore, today’s rally in A-shares is just a continuation of the downward trend, not a real attempt to launch a strong offensive. The time for a strong rally has not yet arrived, and experiencing a rise followed by a fall is within expectations.

Influenced by these four unfavorable factors, despite the rise in global stock markets and the unusual surge in the brokerage sector, A-shares experienced a rise followed by a fall today, which is a typical bull trap.

This year’s rhythm has been a series of big moves, with “Cambridge Information (+107%) and “Golden Bridge Information” (+127%) being the most classic! Recently, companies like “Wanrun Technology” and “Asia Allied Development” have also seen significant gains, while other smaller stocks are not worth mentioning. Their strength is unquestionable!

1. Historical bull stocks, industry leaders, with pure genes, net profit growth of more than 100% in the third quarter.
2. The company has layouts in multiple fields, is building an industrial chain, and is also a core enterprise. Combining market hotspots.
3. The stock price is below 5 CNY, with a market capitalization of less than 10 billion CNY, a low price and a small float for easy upward movement.
4. It has now emerged from the air refueling phase. Short-term major funds are also highly concentrated. The weekly MACD has also shown a golden cross signal, and there is hope for a second wave of trends.

If fans who want to catch the rhythm and make profits in the meat market can take a look at the chart.

How Will A-shares Perform Tomorrow?

Today, A-shares showed a bull trap, which is likely to continue. Therefore, the performance of A-shares tomorrow will not be too bad, with a high probability of remaining weakly turbulent around 2900 points.

It is predicted that A-shares will open slightly higher tomorrow. After the opening, they will either drop slightly to scare off some chips before the bulls come to protect the market, gradually shake and rise to continue the bull trap, or they will open higher, shake and rise, continuing the false rally to lure the bulls, but ultimately will be suppressed by the bears. Regardless of the direction, the probability of A-shares experiencing small gains and losses is high.

In other words, A-shares will either drop slightly after an initial rise or lure in the bulls first and then drop. However, ultimately, they will continue to trade around 2900 points. Here are the reasons:

Firstly: Today, due to the abnormal surge in the brokerage sector, A-shares ignited a bull trap rebound trend, creating a brief bull trap around 2900 points. Tomorrow, A-shares are likely to maintain this range without significant fluctuations, as both upside and downside will be limited.

Secondly: A-shares' bottom-fishing market has not yet ended. Even though A-shares collectively rose slightly today, this rise did not mark the end of the decline but was a brief false rally. After the lure of bulls, there will be a further decline to find the bottom. Therefore, tomorrow’s rise will also be suppressed, as it fundamentally cannot rise significantly. Conversely, it will not fall much either. In order to successfully lure the bulls, A-share market conditions must remain stable tomorrow.

Based on the analysis and predictions above, today, brokerage firms reversed the weakness of A-shares, turning it from a generally bearish market into a generally bullish one! The first day of the rebound is still weak, and this weak upward trend is expected to continue tomorrow.

If the scar hasn’t healed, forget about the pain! Today’s gain in A-shares is a weak rebound, and weak rebound trends can only be traded on a short-term basis. There’s no reason to be overly optimistic for now. Be cautious about the weak rebound in A-shares after which there may be another sell-off to find the bottom. Short-term risks have not been resolved, so approach A-shares' weak rebound rationally.

Good news: Stocks are up, Bad news: Bought Dongfang Fortune.

A-share Market Analysis

A-share market is one of the safest stock markets in the world so far. Furthermore, it has the greatest potential for growth. This is because when the stock markets in other countries like Japan, South Korea, India, Germany, etc., experience a bubble burst, it signifies the beginning of a hard landing for the U.S. economy.

Why did I emphasize yesterday that there is not much time left for A-shares and A-share retail investors? The reason is simple. When the “hawk” [likely referring to the U.S.] pumps up the stock markets of his son, his lackeys, and his allies to the extreme, there will be an enormous amount of currency in circulation. Such currency flows like a tide wherever it wants. However, do not think of this as a good thing. It needs to be carefully considered.

If our country’s stock market is at a “high level,” then they are “welcome” no matter how much they come.

If our country’s stock market is at a “mid-level,” we can also welcome them. At this point, their arrival is like support, not solely for harvesting.

The scary part is that if after the “hawk” harvests his son and his allies, our country’s stock market is at a low point. That would be troublesome because it would mean that our national team is helping others control the market and the positions, waiting for others to harvest us. Such a scenario is absolutely impossible and not allowed.

So, we cannot wait for him to finish harvesting his leeks (referring to inexperienced investors) and then let him harvest us before we rise. It should lead to hedging. When the U.S. cuts interest rates and starts harvesting, we will start to rise.

The above is a tactical requirement.

Next, let’s talk about the progress of the international hot wars. Now Israel hopes the U.S. will intervene quickly; otherwise, it knows its fate is very bleak. Israel has been arrogant and cruel to neighboring countries before, so when it is defeated, it will face retaliation, and others may treat it even more cruelly.

So, the one who fears failure the most in the world is not the United States, it is Israel.

And now Israel has done something extremely bold - it launched an attack on Iran’s senior military commander. It got him killed. Now Israel is really in trouble, willing to go to great lengths to ensure the success of its “big son."

So, it is forcing two major countries to take action. First, it is forcing Iran to get involved directly. Second, it is pressuring the United States to intervene.

It seems that it has achieved its goals, and in the next few days, the world should be very lively, especially in the Middle East.

After analyzing the above situations, let’s get back to the main topic - the A-share market.

A-shares definitely have many problems, but they are irresistible to outsiders who are acting recklessly. A-share markets will definitely rise due to their recklessness, coupled with the increasing national strength of China. It has double blessings.

Now, a strange cycle has formed. Some public intellectuals and some lackeys in China are licking the Americans, and the Americans are licking China. As I am typing this, I can’t help but laugh.

Today’s China is no longer the China of 100 years ago. Any Tom, Dick, or Harry can bully it.

China’s national strength and influence have reached an unprecedented level. It even surpasses the Soviet Union during the Cold War period.

Many people still have the illusion that the “hawk” [likely referring to the U.S.] can turn the tables and win. This is almost impossible. It will be a success if the United Kingdom can land smoothly in this war and hold North America.

The Middle East and the Asia-Pacific region are no longer under his control.

From the current situation, he cannot call his NATO allies, and Japan and South Korea are also pretending not to hear and not participating in any military actions in the Middle East.

In addition, Japan’s recent move, initiating the Pearl Harbor financial incident, has further complicated matters for the United States.

Now the United States is essentially in a 1 against 3 situation, facing Iran, Russia, and China simultaneously. It’s a bit like a Russian matryoshka doll.

The key issue is that the United States must play its trump card now, but the Eastern powers have three trump cards left.

First, Iran has not directly entered the scene. Second, Russia has not directly entered the scene.

The third is the last trump card: China has not directly entered the scene. I estimate that at present, Western powers do not have the strength to force China to play its trump card. It will end the war in the Middle East after Iran or Russia enters the scene, or it will continue to consume the United States and Israel. Remember that in the end, what’s at stake is manufacturing and resources when both sides have roughly equal military capabilities.

Now, the United States wants to simultaneously defeat China and Russia by itself, which I personally believe is unrealistic. Any country in the world does not have the combat power to do so.

What this means is that the United States' military position is collapsing, as well as its financial hegemony. It forcibly needs to harvest his son and allies as a hard landing.

So, A-shares are absolutely safe now. Just don’t speculate, don’t chase after high prices, find a good company, and don’t make hasty moves. It’s truly a passive income. This is a dividend from the international situation and China’s rise.

Many friends say they haven’t enjoyed the benefits of reform and opening up. Isn’t the second wave of unprecedented benefits coming now?

Finally, there is a point made by an internet user recently that I would like to emphasize. When it comes to making money in the stock market, it means you need to pick good companies, have patience, and grow together with the company. If you have this ability, the stock market can help you make money. But if you treat it as a casino, then you are not a qualified citizen. Whether you make money or not depends on your own abilities. If you can’t make money, don’t blame others; otherwise, you might as well give money to everyone. - A patriotic individual with a standpoint

Wishing you all good luck, and looking forward to meeting at the peak.

There are no charts or data here; it’s all just speculation and opinions. That’s right, pure speculation and opinions.

(Repost with proper attribution.)

A Day in the Life of a Stock Investor

6:30 AM: Wake up and go for a run, rain or shine.

After the run, I drop my child off at school and return home to prepare breakfast. Usually, I finish breakfast around 8:50 AM.

9:00 AM: I turn on my computer and start my day. I begin by reviewing the previous day’s market performance, combined with today’s morning news updates. I evaluate my current positions and the overall market conditions to make short-term trades or small capital short-term investments to improve my market sense.

Closing Hours: I spend 3-4 hours at the end of the day reviewing and summarizing my trades and activities. This is the most important part of my day as I search for undervalued stocks. I also write an investment-related article for Zhihu (a Chinese Q&A platform), which serves as both a record of my stock trading life and a place for me to share my investment experiences and insights. I believe in helping others and myself.

Follow the public account “Fenghua1985” for guidance from an experienced trader skilled in short and medium-term trading arbitrage. I’ll be with you on this stock market journey, regardless of market conditions.

Today’s A-share Market:

The A-share market experienced a rebound after probing the bottom, with the Shanghai Composite Index quickly turning green under the influence of the securities sector’s rally. The afternoon session continued the upward trend, but the performance of the ChiNext (start-up board) was less impressive, and the new energy sector underwent an adjustment, reflecting market differentiation.

The food and beverage and financial sectors rebounded, making it easy for the Shanghai Composite Index to bounce back. The inflow of northbound funds increased significantly, and core assets once again formed a cluster. This indicates that the future A-share bull market will still be dominated by value and blue-chip stocks.

Retail Investors, Fasten Your Seatbelts!

The recent market has been characterized by repeated fluctuations. Just when everyone had cut their losses, it rebounded. Fasten your seatbelts, and the key to maximizing profits is not to obsessively monitor the market but to focus on the ultimate outcome. Investment is about the end result, not the process.

On the market front, the consumer and financial sectors rebounded, and stocks generally rose. However, the performance of the ChiNext was mediocre, and the new energy sector underwent an adjustment. The Northbound Stock Connect experienced a pullback, while Hong Kong stocks saw a significant rise. There were many daily limit up and down boards.

Trading volume saw a slight increase, but excluding the impact of northbound funds, the volume was shrinking. When no one is interested, it rebounds. With only two trading days left, most people will end the year 2023 with regrets, including myself, as I have reduced my A-share positions.

This year’s market has seen the Shanghai Composite Index without significant ups and downs, making it challenging for investors to participate. The influx of northbound funds is a positive signal. Some say foreign funds have exited, but a review of the data shows that overall positions have remained relatively unchanged compared to January.

A consolidation market with intensified fluctuations requires investors to fasten their seatbelts and prepare for market turbulence. Hold your positions and prepare for a dip. Sell high during rebounds, and repeat. A mature investor must be able to participate in sideways and bear market conditions.

A-share Market Outlook for Tomorrow (December 28th):

Tomorrow marks the last trading day of the year. I remain optimistic! Precise market predictions are not necessary; the key is profitability. It’s not about short-term speculation; it’s about having the correct overall direction. Left-side investing means earning profits in one bull market that last for ten years, with a low frequency of positions.

The direction is upward! As long as the annual line closes negatively, next year’s rebound is expected! The month in which the main uptrend occurs over the next three years is unknown, so the best approach is to cover all scenarios. Be present for every minute of the next three years, as it’s essential in trading.

Closing Remarks:

Don’t fear corrections; markets determine their direction through volatility and break out amid despair. Whether it’s valuation levels or stock prices, it’s not advisable to be bearish below 3000 points. A broad perspective is crucial!

However, for short-term speculators, it’s still not the time to participate. Wait until 2024 when the market warms up, and right-side investors can enter. Left-side investors need to bottom-fish, as time exchanges for space, and different styles, logics, and choices prevail.