Important reminder before tomorrow's market opening: good news has landed, retail investors please stay calm, don't fall before dawn!
Tomorrow the A-shares will open, and the weekend market has finally welcomed a key positive signal. Here, I urgently remind all retail investors to remain rational and absolutely avoid blindly cutting losses in the darkness before dawn. Please carefully read the following four core recommendations:
1. The market sentiment over the weekend has reached an extreme bearish point. Regardless of whether one was bullish or bearish before, nearly all investors have lost confidence in the market. In the stock market, sentiment often reverses when extreme despair is reached; when everyone is desperate to cut losses, it often signals that the market is about to bottom out and rebound.
2. Looking back at this round of market, the index fell from 4197 points to 3955 points, and in March, before the month has ended, it has already retraced over 200 points. If it weren't for the unexpected black swan event of the Middle East conflict, no one would have expected the index to easily fall below 4000 points. At the beginning of the month, everyone was still looking forward to a slow bull market and a continuation of the spring market, but the US-Iran conflict directly shattered market expectations, triggering a comprehensive shock and adjustment in the Asia-Pacific and European-American stock markets.
Now the vast majority of people have turned bearish, not based on fundamental judgments, but rather influenced by external circumstances and deteriorating technical patterns. This mindset of chasing highs and cutting losses, swayed by emotions, is most easily harvested by institutional funds. If you also feel unable to hold on at this moment, you must first calm yourself down.
3. In March, global stock markets weakened, with the core reason being external geopolitical conflicts, compounded by domestic capital taking the opportunity to sell off and quantitative funds amplifying the downward effect in panic, causing A-shares to completely deviate from their own operating rhythm, resulting in obvious mispricing and emotional panic.
Right before tomorrow's opening, the market welcomes two substantial pieces of positive news:
First, Iran has officially announced that it will allow non-enemy vessels to pass safely through the Strait of Hormuz and will cooperate with the International Maritime Organization to enhance navigation safety, meaning that the strait is expected to restore normal passage in the true sense;
Second, there are reports that the Trump team has initiated preparations for talks with Iran, seeking preliminary communications through a third party.
These two signals directly indicate a clear easing of geopolitical tensions, which is a significant positive for the global financial market. The core negative factor for this round of market decline is the Middle East conflict; now that the risks are gradually cooling down, the suppressed market elasticity will surely be released quickly, and sentiment will also see a significant repair.
4. Tomorrow's opening will be generally warm in terms of news, providing clear support for A-shares. The panic sentiment over the weekend continues to ferment, and many plan to cut losses as soon as the market opens on Monday; at this moment, it is even more important to maintain composure and not easily give up your chips.
As external circumstances ease, the market sectors will also show clear differentiation:
Technology stocks are expected to see a rapid recovery in risk appetite and may usher in a collective rebound;
Precious metals and non-ferrous metals have opportunities for rebound after being oversold, while falling oil prices and a weakening dollar will further benefit this sector;
Energy stocks are likely to see fund outflows and short-term corrections, so do not blindly chase high prices in hopes of a one-sided rise.
From the perspective of the overall market, the index is approaching the key point of 3900; regardless of how the external environment changes, next week the market will enter a stabilization range. Panic and despair have reached an extreme, so it may be wise to patiently wait for the market to self-repair. After all, having held on for so long, the time spent waiting for space is completely worthwhile.
The pits created by the current market, when looking back, will be seen as quality low-entry positions, and there is no need to be overly pessimistic; if you hold on, you will be able to wait for the market to warm up.