Tomorrow the A-shares will open, and tonight 250 million investors are losing sleep over the rise and fall of tomorrow's A-shares! On Friday evening, the three major U.S. stock indices plunged sharply, with oil prices soaring more than 7%, and the fear index futures rising over 7%. How will the A-shares perform tomorrow? How should we retail investors respond? Tonight's content is crucial, so let me share it with you in three minutes!
On Friday evening, the three major U.S. stock indices plunged again, setting new lows for the adjustment, with the Nasdaq index dropping over 2%, the S&P 500 down 1.67%, and the Dow Jones index falling 1.73%. The reasons behind this plunge are well-known; there's no need to delve deeper into it. They are insiders, and it is only natural for the indices to continue to drop!
At the same time, oil prices surged over 7%, and the fear index futures also rose more than 7%. Our FTSE China A50 futures index dropped 0.9%, which will inevitably put pressure on the opening of tomorrow's A-shares. However, gold rebounded by 2.59%, and silver rose by 2.7%, indicating that precious metals and minor metals sectors will have positive feedback trends tomorrow.
From the weekend news, there are both good and bad aspects. Regardless of whether the external news is good or bad, we have now entered the fifth week. For us outsiders in the stock market, the influence will gradually diminish. Tomorrow, the A-shares are expected to open lower. As for how much lower? By observing the decline of the Japan and South Korea stock markets at 8 AM tomorrow in the Asia-Pacific region, we can roughly gauge whether the A-shares will open down by 0.9% or 0.5%. However, the most likely impact will be within the first half hour of trading or the morning session!
The plunge in the external stock markets is just an external factor affecting our A-shares. The actual rise and fall ultimately depend on internal factors. In fact, this week the A-shares have already formed three days of gains and two days of losses, showing a rebound after hitting a weekly low, with a minimum of 3794 and a closing rebound to 3913. It can be said that the 3800-point level is more opportunity than risk, and this has not changed up to now! Among them, the strongest remains the Growth Enterprise Market Index, which has returned to the vicinity of the 5-day moving average this week after a rebound.
From a technical perspective, the A-shares' pullback to 3080 is a key support level for the quarterly line, as well as the white line support for the monthly EXP trend line and the yellow line support for the weekly EXP trend line. The daily level has returned to the vicinity of previous lows. Simultaneously, from 4197, there has been a 15-trading-day adjustment of 400 points. The 3800-point level is also a dense trading zone since last August. Therefore, 3800 points is an important key support level. If the adjustment after the Qingming Festival last year were to initiate a full-year rebound, then currently, any pullback near 3800 points represents an opportunity greater than risk for the mid-year upward trend!
From the market characteristics, recently, sectors that have been continuously adjusted and oversold, such as pharmaceuticals, ground weapons, food processing, biological products, etc., have all shown signs of a rebound. At the same time, over the past month, the three major sectors that have been significantly selling off are securities, semiconductors, and insurance. Among them, the semiconductor sector has already formed a double-bottom pattern this week, securities rebounded with reduced volume on Friday, and the insurance sector has very limited adjustment space, ready for a rebound. This indicates that previously oversold sectors have rebounded, and the continuously declining heavyweight sectors have also basically adjusted in place. Previously underperforming sectors, such as precious metals and industrial metals, have also rebounded. Therefore, those who were still reducing positions on Friday and this week, I really don't understand whether these people have an investment system or are just used to cutting losses without having ever made a profit.
Meanwhile, although the main index has continuously adjusted by 400 points over the past four weeks, and many sectors have incurred losses during this adjustment, it must also be said that there has still been some profitable effect in the recent five-week market. Among them, it is clear to see that there are sectors with continuous gains. Those who are truly skilled and can identify the main lines of the A-share market have basically been enjoying the “hot pot while singing” in the electric power sector every day during these five weeks. The fluctuations of the main index have had little correlation with the electric power sector. Therefore, we cannot only focus on the main index and complain; it is useless. We must adapt to the market, strive to improve our capabilities, and grasp the main opportunities in market trends. The electric power sector in the last five weeks is the best evidence. Fortunately, I and all my friends in the electric power sector have been enjoying the benefits during these five weeks!
So next, which sectors will lead the index to stabilize and rebound first? The battery sector announced performance increases three weeks ago, resulting in a reversal and upward trend. The battery sector is the largest weight in the Growth Enterprise Market, and this week it has seen the highest capital inflow, continuing to increase in volume on Friday and maintaining an upward trend without change. The battery sector will continue to hold its position in the auxiliary trend! Meanwhile, due to the rise in oil prices, global supplies of oil and diesel are tight, and the supply of diesel from mines in Australia is also tightening, bringing new disturbances to the lithium mine fundamentals. Lithium carbonate prices continue to break through 180,000 yuan, and the end of AI computing power is electricity, which adds fuel to the demand for energy storage. Thus, it once again brings a dual drive of supply and demand for upstream energy metals and lithium, with continuous capital inflows. Therefore, the battery sector along with its upstream energy metals and lithium is expected to continue its trend of rising prices, and tomorrow's low opening actually provides a good opportunity for buying on dips rather than chasing highs!
In summary, this weekend, 250 million investors are worrying about the rise and fall of tomorrow's A-shares due to the major drop in the external market and the surge in oil prices. This shows an excessive concern for external factors while neglecting internal factors. After a series of continuous declines, the A-shares have experienced a decline adjustment of 400 points over four weeks. The 3800-point level is a good opportunity to buy cheaply. This round of downward movement is reminiscent of last year's Qingming Festival decline. Therefore, continuing to open low should not cause panic; a little more patience and confidence are needed to wait for the rebound! Just as pessimists have been lamenting every day about the falling sectors, optimistic individuals have been enjoying their time in the electric power sector over the past five weeks, while the index can continue to hold out through these difficult days. The dawn will be beautiful after the dark nights!