How to view todays market as the three major indexes open lower on November 22nd, with the data element sector strengthening and the real estate development sector rising

Summary: Current Market Situation and Advice for Investors

Translation: Analysis of the Index and Recommendations for Investors Today’s trading volume contracted compared to yesterday morning, and it is difficult to reach trillion throughout the day, roughly around 900 billion.

When trading volume contracts, the profit effect will also decrease.

The Shanghai Composite Index is oscillating around 3050 again.

During this period, the market trend needs to be observed through the K-line trend, which shows a oscillating upward trend, with the bottom gradually increasing, albeit very slowly.

Every time it reaches above 3080, it hesitates. There is no need to compare it with the trend of the US stock market, as it is difficult to compare. They are almost reaching new highs.

It cannot be compared to indices like the 2000 Index and the Shenzhen Composite where the trends of some mediocre small and medium-sized stocks cannot match.

The Shanghai Composite Index is suppressed, with large-cap stocks and leading companies in various industries being suppressed.

These stocks can only be moved by large funds.

The global capital markets are warming up, and small and medium-sized stocks are lifted by speculative funds.

However, large funds still hesitate and exhibit a somewhat mysterious trend.

Do not panic, undervalued companies at the bottom do not need to be sold, and low Hang Seng 300 Index funds can continue to be held.

It depends on how to complete this round of rebound in the end. Do not chase to buy and manage your position well.

Small and medium-sized stocks have already rebounded very well, so there is no opportunity to buy high. There is a high probability of losing money.

If you are not interested in Hang Seng 300 Index funds, there are not many remaining opportunities.

Although the Shanghai Composite Index is weak, there is still expected upside potential.

This is more or less the situation, and the trend is indeed disheartening.

But if you can’t bear it, cut the large-cap stocks and sell the index funds, and then it starts to rise again.

The news will say that it is because of the surge in the US, the appreciation of the exchange rate, and the expectation of a rate cut in the US dollar, etc.

All these reasons will be presented to explain why the Shanghai Composite Index is rising.

But by then, it will be too late. It would be like realizing all these positives when it is already risky.

Currently, many positives have not been realized in the Hang Seng 300 Index, the CSI 50 Index, and the Shanghai Composite Index, so they can still be held and monitored.

Other small and medium-sized stocks and the Shenzhen Composite have already realized the positives and have emerged, so there is no opportunity left.

Large funds remain still, and if large-cap stocks do not rise, it is unknown what concerns they have. In any case, their valuations are very low, so holding on is still possible.

There are short-term opportunities, many speculative stocks, opportunities before 3000 points, when there were a lot of such opportunities during the rebound.

The individual stock opportunities and short-term opportunities have been fully explored from before and have exceeded expectations.

What remains is for the Shanghai Composite Index to start a wave. There is no place left in this market, so it will have to go back to a low position or a rest state.

Stay calm, continue to pay attention to how the Shanghai Composite Index moves in the oscillating trend behind.

Manage your position well and keep more cash on hand.

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Index Analysis

The Shanghai Composite Index is still expected within the range of 3050-3150. The current level is not high, so there is no need to be too bearish. Continue to anticipate a rebound.

The ChiNext board is the same. Its valuation is slightly higher, but is not expensive in the long run. A decline is also an opportunity.

At the index level, it is the large-cap stocks that the large funds are still slowly playing with.

Pay more attention to stocks with stagnant price movements, including those with relatively high dividend yields and undervalued quality.

There are still values worth observing in these stocks.

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Advice for novice investors

In this type of market, novice investors are more likely to give up on Hang Seng 300 Index funds, as well as some bottom index funds, and chase after small and medium-sized stocks and the 2000 Index funds.

Because novice investors tend to care too much about short-term gains, if something rises, they think it’s good, and if it doesn’t, they don’t want to hold onto it.

This short-term trading mindset is not necessarily bad, but it is not safe.

If there is a margin of safety, it is definitely possible to engage in some good and not overly speculative hot spots that have not risen too much yet.

But now, it has already risen far beyond expectations, so dealing with small and medium-sized stocks is quite troublesome.

It is uncertain whether large-cap stocks will catch up and whether the Shanghai Composite Index can approach 3150.

However, it can be determined that if they don’t rise, they are not expensive, and they can still be bought later. It’s only a matter of time before they make money.

With the valuations of small and medium-sized stocks like this, the situation can easily go from bad to worse, so the best strategy now is one of these two options:

Either stay out of the market, keep more cash, and avoid participating in this type of market directly.

Or continue to control your position and hold undervalued index funds, and play slowly.

There are no other safe opportunities worth chasing after these small and medium-sized stocks.

The equal-weighted A-share index has returned to the high points of the past few years, just like the US stock market, lingering near new highs.

This clearly indicates that most small and medium-sized stocks are already highly valued, and when the time comes, they will all fall together. A drop of 30% is just the beginning, and a 50% drop is normal, so it is definitely not worth touching.

If you look down on large-cap stocks, believe that the Shanghai Composite Index has no hope of rebounding, you can hold onto cash with peace of mind and wait for opportunities in the future.

But under no circumstances should you touch high-valued and overly speculative stocks, as they will bring significant losses.

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Thank you for the likes

It is really not easy to persist in doing the same thing year after year. It is difficult to maintain enthusiasm for creating without your support.

Wishing everyone success! Have a happy life!

Let’s take a break here for now and continue the discussion later.

Today is the 1020th day of writing daily review notes [Daily Check-in].

I hope to meet more like-minded friends here and learn and grow together every day.

Remember: When greed arises, desperate thoughts follow!

Control the risk, and profits will follow.

Risk Reminder: Investment involves risks, and caution should be exercised when entering the market!

Do not blindly invest or make impulsive investments.

Please make scientific and rational investment judgments based on your own comprehensive situation and specific market conditions.

Study more to enrich your investment knowledge.

Wishing you health, happiness, freedom, and profitability.

01

Why did the BeiZheng 50 index rise sharply?

02 How should we view the sharp rise of the BeiZheng 50 index?

03 How should we view the current A-share market? Yesterday, the Beijiao Exchange experienced a bull and bear cycle in just one day. The index reached a high of 12% before closing at a mere 4.5% increase at the end of the day. The stock market turned into a casino in a second, causing an exhilarating frenzy.

9:30 AM: The Beijiao Exchange opened high, indicating a possible rebound as the market hit bottom.

9:40 AM: The index continued to surge as funds aggressively entered the market, pointing towards a significant rebound.

9:50 AM: The highest single-day increase in nearly two years. This is not just a rebound, but the start of a new bull market.

10:00 AM: The market suddenly surged as domestic funds eagerly entered, triggering a wave of limit-up trading. This is the bull market moment!!!

11:00 AM: The index rose by 8%, reaching a record high since the market opened. Funds frantically chased after stocks, with screens full of stocks hitting their limit-up levels. The Chinese economy has completely reversed, with the Renminbi skyrocketing last night, while the U.S. economy is predicted to start declining in 2024. The Beijiao Exchange is about to welcome the strongest bull market in history!

11:30 AM: A century-long bull market is within reach. By the end of the morning session, the Beijiao 50 Index rose by 9% and individual stocks were hitting limit-up levels. All funds were making huge profits. If you don’t enter now, you will be left behind by the bull market train. The biggest nationwide wealth boom of the 21st century is just around the corner. Let’s go!

1:00 PM: Let’s go! The index is about to surge by 30%. It will only take two days for the Beijiao 50 Index to regain its historical high. A stock market miracle will unfold in the A-share market. Charge!!!

1:30 PM: Don’t be afraid. This is just a brief correction to allow us to get on board. China’s bullish sentiment towards the stock market is firm. Evergrande’s overseas restructuring has been successful, and the black swan of the real estate sector has been eliminated. Don’t be afraid, keep charging!

2:00 PM: Don’t be afraid. It’s just a technical adjustment. Don’t be afraid!

3:00 PM: It’s a free fall!!!

Of course, jokes aside, after laughing, we still need to understand what is really going on. Why did the Beijiao Exchange suddenly surge? Will this kind of market continue? What are the current characteristics of the A-share market, and how should we operate in the future?

01

Why did the Beijiao 50 Index rise sharply?

How strong were the stocks on the Beijiao Exchange today? Let me give you some data. As of today, there are a total of 231 stocks listed on the Beijiao Exchange. Today, 213 of them had gains exceeding 5 percentage points, 100 of them had gains exceeding 10 percentage points, and 30 of them had gains exceeding 20%. In other words, if you buy stocks on the Beijiao Exchange, there is almost a 50% chance of gaining 10%. By getting in, you can make a killing!

Last week, I wrote an article titled “Attention! A Historic Turning Point in A-shares is Coming!” After a long time, I am bullish on A-shares. But unexpectedly, the Beijiao Exchange took the lead in the market. Currently, the individual stock account threshold for the Beijiao Exchange is very high, requiring a capital of 500,000 yuan and two years of trading experience. This is destined to be a celebration for a few people.

As for the fundamental reasons for the recent surge in the Beijiao Exchange, there are two:

First, policy support. Over the past year, the regulatory authorities have introduced a lot of positive measures from the trading, investment, and financing aspects. Recently, they even plan to include Beijiao Exchange stocks in the main index and launch thematic funds and ETFs. In particular, the reduction of the account opening threshold from 1 million yuan to 500,000 yuan is a significant positive development for the Beijiao Exchange.

Second, capital inflows. As we all know, policies alone are not enough to determine whether the stock market is good or not. It also depends on whether there is money in the market. Rumor has it that major securities firms have received guidance to increase the account opening rate for the Beijiao Exchange to 80% in the near future, encouraging more investors to trade on the Beijiao Exchange. This has directly ignited the market for Beijiao Exchange stocks, leading to a rapid surge.

02

How should we view the sharp rise of the Beijiao 50 Index?

Now that the pleasantries are over, let’s dive deeper into how we should view the sharp rise of the Beijiao Exchange and the current A-share market.

First and foremost, I want to clarify that although my long-term view on Beijiao Exchange stocks is bearish, I am not pessimistic about the short-term perspective. From a macro perspective and the ecology of the A-share market, the current market needs a powerful index, a wealth-generating effect, and an index that can drive more people to invest in A-shares.

Currently, there is a major problem in the A-share market - lack of funds. Looking at today’s market, aside from the rise in the Beijiao Index, the three major indexes all fell. The Shanghai Composite Index fell by 0.79%, the Shenzhen Component Index fell by 1.4%, and the ChiNext Index fell by 1.7%. The trading volume of the entire market decreased by 122.6 billion compared to yesterday. All the funds and enthusiasm of the market were attracted by the Beijiao Exchange.

The reason why funds and enthusiasm are so easily drawn to the Beijiao Exchange is due to another important background: the current market lacks stable speculative opportunities. It’s all about individual investors chasing ups and downs. Why have stocks with the words “dragon” or “phoenix” in their names been hyped recently? Why has the drama about a business tycoon become a major market theme?

The underlying reason is that almost all companies in the current market have not shown growth in their fundamentals. The lack of value investment opportunities and the absence of institutional funds entering the market have allowed speculators to dominate the pricing power. They buy stocks based on which ones have the highest gains and fastest growth. As a result, funds flow quickly based on where the hotspots are. Currently, the hotspot is the Beijiao Exchange, and the speculation and manipulation of the entire sector will continue. It won’t die down easily in the short term.

Regarding the current market situation, I believe there is no need to be pessimistic. Having an index that rises sharply is always better than everyone falling. In my previous article, I believe that A-shares are about to turn around, and the Beijiao 50 Index is the first to reverse. When its speculation is over, funds will quickly flow back to the main board. The Renminbi has already started to appreciate, and leading themes are gradually emerging. The speed of foreign capital outflows is slowing down, and more good news is starting to emerge. The end-of-year market outlook is promising!

Other exceptional content by Ling Le

Ling Le: The most comprehensive guide to opening a stock account in 2023, teaching you how to open a Huatai Securities super VIP commission account! Why is saving money the key to enlightenment? How should we interpret the performance of the A-share market on November 16, 2023?

Market Summary: A-share market oscillates around MA5, with decreasing trading volume. Short-term speculations are risky.

市场总结：A股围绕五日线震荡，成交量下降，短期投机风险高。 There is no need to wait until the closing, the plot of the A-share market has long been seen through! The index did indeed fluctuate around the 5-day moving average in the afternoon, and my prediction was once again correct! Today, the market volume contracted by billions, will tomorrow be a black Thursday? How will retail investors respond? By the time you come across this article, the answer has already been determined.

Next, let’s talk about speculation and trading. Many stock market friends cannot grasp the short-term sentiment and cannot reap benefits without more than ten years of practical experience. In order to accommodate more fans, I will try my best to use plain language to help everyone understand. This is the area I am best at!

First, let’s go over the overall market situation as usual. We are in a stage of horizontal oscillation. There is neither new money entering the market to break the deadlock, nor any major negative factors to drag down the market. Tomorrow’s Thursday will still revolve around the short-term moving average, and the volatility will not be too significant. The trading volume can maintain around 900 billion, which is considered normal. Once it shrinks below 850 billion, attention should be paid to the short-term breakout risk, with support at the 20-day moving average.

Next, let’s talk about speculation and trading. Many stock market friends cannot grasp the short-term sentiment and cannot reap benefits without more than ten years of practical experience. In order to accommodate more fans, I will try my best to use plain language to help everyone understand.

First, at present, market speculation sentiment is becoming crazy. Veterans know that there will be one or two rounds of such frenzy every year. At this time, it’s a test of courage, detached from the fundamentals. The most active funds in the A-share market have nowhere else to go, except for speculative trading. Everything else leads to losses. Therefore, we have entered the phase of reckless speculation, passing the buck, as long as we are not the last, there is a high probability of making profits.

Second, when dealing with sentiment-driven speculation, it is essential to understand who the leader is and who is just following the trend. It is crucial to choose the hottest and most impressive leader in the market. Emotion is a double-edged sword, either you don’t play with it, or you go for the strongest.

In conclusion, do not touch short-term trading without sufficient awareness. Many bitter experiences cannot be understood without personal experience, which is not enough for outsiders to comprehend. But given the current market situation, you are forced to speculate and join a group. This is also a tough phase for retail investors; there is unfortunately no other way, A-shares are just that cruel.

But since you are paying attention to me, it means you trust me. In last night’s lengthy article, I also provided a train of thought, “The main bullish period of market sentiment has arrived.” One particular sentence is worth pondering, “The different stages of the market environment are bound to create different style preferences.” Understanding this sentence correctly already puts you among the best in A-shares!

Similarly, in the thorough analysis provided in the lengthy article, all that’s left is to serve the beef stew to everyone. Friends who haven’t found their direction yet, do not take the wrong path again! If you don’t understand anything, let’s help and support each other in the comments section. I don’t want to see anyone left behind!

Lastly, there are things that are hard to comprehend if I don’t mention them. Whether you are a hardcore supporter, a critic, or just passing through, I hope everyone can gain something here, in the lengthy article. Learn first, then surpass! I’m not afraid of teaching my disciples and leaving the master hungry. Opportunities are everywhere, and it’s more enjoyable to share them!

The rest needs not be said. If you give a thumbs-up, I will live up to the expectations! With such accurate stock analysis, with my strong abilities, I am worthy of everyone’s trust!

Uncle Hua has been trading stocks for over ten years, focusing on short-term swings and top and bottom trends. If you also want to choose the right mainstream topics, follow Uncle Hua’s official account (Seeking Golden Sergeant), where I will teach you how to grasp market trends and reveal the truth behind major financial events. Follow me, and time will give you the most authentic answers!

No loss, no gain.

Losing money is acceptable, but there is no need to lose money like yesterday and today.

Welcome to follow my knowledge planet, “AStock Trends,” where risks are forecasted early and opportunities are seized in advance: A股趋势.

Hot Sectors: Consumer electronics, robotics, Huawei concept, investment banking.

Thank you for inviting me. Yesterday, the A-share market rose and then fell, which can be interpreted as a reaction to negative news. At the opening today, the A-share market had a slight downward trend. Overall, there is not much concern about the A-share market.

Recently, it is advisable to have a slightly larger risk appetite and chase after some hotspots.

The recent hotspots include consumer electronics, robotics, Huawei concept, and investment banks.

Other sectors, such as pig breeding, liquor, and real estate, may also experience some rebound, but they are not the hottest sectors and may not show the strongest upward momentum.

The Power of Stock Concepts: A Summary

I don’t know if you’ve noticed, but there is a mysterious force at work in the A-share market these days.

I could understand the hype around dragons and phoenixes before. At least there was some traceable basis for it, and we all had some fun with it. It was reasonable to associate it with the Chinese cultural elements.

But why are we now seeing the hype around “number concepts”?

These number concepts are not about technology or digitization in stocks, but rather about stocks with numbers in their names.

One, three, six, seven, nine, one hundred, one thousand, and so on.

Impressive!

When it comes to creating hype, it’s always our A-share market leading the way! There’s no logic to it, no fundamental basis. But they all align and act collectively around 10:20, regardless of the industry or whether the company is profitable or has investment value. As long as the company name has a number in it, people buy, buy, buy!

Even technical analysts are dumbfounded. Is this really a financial market worth analyzing and researching? It’s clearly the era of the creator of capital; it will back whoever it chooses. There is also a large group of loyal followers in the market, with coordinated actions and high levels of discipline and tacit understanding.

When there are no concepts to hype in the market, the “leeks” (retail investors) start creating their own concepts to hype.

As Lu Xun said: “There is no road in the world; when enough people pass, a road is formed.”

In the past, we were led by capital, and now we tread the path of capital, leaving them with no options.

Furthermore, you might have noticed that Beijing Stock Exchange had an astonishing surge yesterday. On November 21st, the Beijing Stock Exchange experienced a “big explosion” in its market, with the Beixinsan Index rising as high as 11.76%, and nearly 10 stocks in the morning hitting the daily limit of 30% increase. A total of 231 stocks in the Beijing Stock Exchange showed gains. Today, it continues to demonstrate its strength. According to the official response, the reasons for the sharp rise are attributed to factors such as the Beijing Stock Exchange’s deep reform measures, Beijing State-owned Assets Fund entering the market, new securities codes starting with “920,” and the inclusion of Beijing Stock Exchange stocks in the CSI Index, as well as the expansion of market makers.

Here, I want to say that the sentiment now ignites the restless hearts of retail investors. Stocks with small market capitalization are being heavily hyped, so I urge you not to disrupt your own trading pace. Storms come and go quickly.

But I still enjoy watching the drama of retail investors defying big capital. The idea of underdogs making a comeback sounds very exciting.

However!

Beware of risking your capital. If you don’t understand, I suggest you refrain from getting involved lightly.

Finally, let’s talk about the basic logic of investing in the financial market. Before discussing the stock market, let’s talk about lottery tickets! Everyone knows that there are lottery stations all over the country where you can buy a ticket for just two yuan. The tickets bought from various stations are then uniformly drawn by lottery organizations. If you win a big prize, you won’t have to worry about food and clothing (you deserve to get rich overnight). This is an earlier form of fundraising recognized by the state! By distributing the big winnings to a few people, some individuals gain funds to become bosses, which boosts economic development and creates job opportunities, while a few people benefit from it at the same time. The most important thing is to make national capital flow and circulate. After all, combining the two yuan from individual people yields a astronomical number. It can be used for many things, such as supporting sports and disability assistance. The stock market works in the same way. Individuals and institutions with certain assets subscribe to shares of listed companies. The purpose is to raise funds for the companies, and if the company has good prospects and everyone has confidence in it, there will be more financing opportunities, resulting in better development and a faster market share acquisition. In the 1980s and 1990s, China’s economic special zones and many individual investors took off. Just think about how many people became wealthy. The commonality among them is that they all operated based on the national background and the core idea of social progress and economic development. But there are always people looking for loopholes and making huge profits!

In the present circumstances, protecting your capital is more important than anything else!

Market Review on November 22, 2023

01 Market Status: The market showed narrow range fluctuations and lacked analysis significance. The focus was on North Exchange’s activity, suggesting avoiding short-term speculation.

02 Sectors: Besides North Exchange’s micro-cap stocks, media and real estate sectors were relatively active. Overall, trading opportunities were limited.

03 Recommendations: Stick to regular investment rules for long-term holdings. Avoid being swayed by short-term market behavior. No significant trading opportunities observed for speculative trades. Review of November 22, 2023

Market Overview:

The overall market trend today is not very clear. The intraday chart shows narrow fluctuations without much technical significance. There is a slight overlap between the long and short positions. The highlight of today’s volatility is still in the Northern Exchange. It can be seen as an advertisement for liquidity, so if you have invested in fund positions before, it is recommended to continue redeeming. Short-term speculation is not recommended. The Shanghai and Shenzhen markets still need time to consolidate, and there is no need for excessive interpretation of other factors.

Sector Analysis:

In terms of sector performance, besides the micro-cap stocks on the Northern Exchange, media and real estate sectors are relatively active. The heavyweight sectors are also slightly active, with minor gains and losses. Overall, there are not many trading opportunities in other sectors.

Originally, it was expected that the heavyweight sectors would take the lead in performance. However, after yesterday’s surge and subsequent pullback, the probability of sector rotation is relatively small. It is possible that when small-cap stocks adjust, large-cap stocks will follow suit instead of rotating. It is even possible that the Shanghai 50 Index may break the low point at the end of October when adjusting along with small-cap stocks. But don’t panic about the change in the bottom area. Just look at the trading volume. If it no longer piles up and its price fluctuations are mainly in a shrinking volume trend, there is no need to fear. The recent rebound was mainly led by niche sectors, not mainstream sectors like Xingquan Trend or Boshi Theme. This is a bias created by the bottom area of a bear market. Therefore, if you see large-cap stocks adjusting along with small-cap stocks, especially the comparison between the Shanghai 50 Index and the CSI 1000 Index, and if the Shanghai 50 Index breaks the low point at the end of October while the CSI 1000 Index does not, it is highly likely the last wave of the weight sector searching for a bottom. Of course, if the heavyweight sector takes over the small-cap stocks and shows strong trading volume, the downward expectation should be cancelled.

Recommendations:

For regular investment plans, continue as usual according to the rules, no need to stop. However, if the market in the next month or even the next one or two months shows a decline in the heavyweight sector greater than that of small-cap stocks, you need to have the courage to increase the investment amount, and don’t be confused by the nature of the market.

As for speculative trades, it was difficult today due to the chaotic market trend, somewhat resembling a zigzag pattern. The advertisement effect of the Northern Exchange has indeed attracted some authorized participants, large and small institutions, or even individual investors to join in. My personal advice is to refrain from participating in the Northern Exchange in this way, as it is not advantageous to engage in short-term speculation in the on-exchange funds and stock liquidity. As for speculative trades outside the exchange, there were no trading opportunities today. The adjustment in all sectors was not smooth, and the rebound was not strong enough. The market did not have much follow-up premium.

My analysis on November 15th remains unchanged.

My analysis on November 15th remains unchanged.

It is possible that in the next few days, the National Team may buy a bit more, or some unexpected positive news may emerge, and there may be higher points ahead…

However, it is difficult to grasp, and it is wise to remain in a cash position.

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My past analysis

中国股市未来上升潜力有限 China’s Stock Market Growth Potential Limited

Report from the Financial Times:

More than three quarters of the foreign funds that flowed into the Chinese stock market in the first seven months of this year have been withdrawn, with global investors selling over $25 billion worth of Chinese stocks.

Goldman Sachs analysts recently predicted that, against the backdrop of increasing profits and valuations of Chinese companies, the Shanghai Composite Index is expected to rise by about 17% by the end of next year.

Morgan Stanley strategists predict that the Chinese stock market will rise by 7.5% over the next 12 months, but they warned that if policymakers do not take more proactive measures to support economic growth, “we cannot rule out the possibility of further reducing allocations and transitioning investments from China structurally”.

Options Risk and Market Outlook

The expiration day was crushed at the end, unfortunately, the out-of-the-money level of the position options still returned to zero by the closing bell, even though it was at 0.27% at the end. Fortunately, I took some profits when it doubled before, so this time is just playing around.

After reviewing, this trade was still too greedy. I should have been prepared for the out-of-the-money options with over 400 times leverage to return to zero. If I had chosen options with a higher level, today’s closing could have still yielded a 100% return. So, this is the risk of options. Even if the direction is somewhat correct, the outcome can still return to zero due to an incorrect price prediction. After all, high returns come with high risks. If this out-of-the-money option becomes in-the-money, the profit would multiply several times, but if it doesn’t, it will expire worthless!

After the expiration day, it is difficult to determine the clear direction for now. If this time’s rotation was triggered by a one-sided market decline, there is often a good rebound after the expiration day. However, this month has not shown a one-sided market. Citic Securities still holds so many short positions in the December contract of the stock index futures market, so it is difficult to make a judgment for now. It would be better to stay out of the market for a while.