Mid-term decline, should I run away?

Today’s market opened slightly higher in the morning, reached a new high, then fluctuated back and forth. In the afternoon, it suddenly plunged, forming a large bearish candle. Safe-haven sectors like oil and gas continued to lead the gains, but precious metals and military industries fell sharply, with many hitting their daily limit down! The divergence in safe-haven assets indicates that the market’s decline isn’t solely due to risk aversion; it’s likely that a decline was already expected.

Technically, the overall trend remains upward. The trend hasn’t changed, but in the short term, with an important meeting approaching and unclear policy support, funds lack a clear direction. The recent sell-off is likely to be a temporary move to free up capital in preparation for a market rebound. The market was already struggling to move higher, and the sudden event was just a coincidence.

Last week, when there was no conflict in the external environment, I mentioned that the market wouldn’t perform well this week and advised everyone to be defensive and reduce positions. The market didn’t follow my advice yesterday, but today it declined. It’s not because I predicted the market would fall; I anticipated that the market wouldn’t do well this week.

Today, the entire Asia-Pacific market experienced a sharp decline. Japan’s stock market dropped over 2,000 points, and South Korea’s market hit the circuit breaker. A-shares also fell, which is normal—markets go up and down. There’s no market that only rises without falling, nor one that never stops declining. After a big rise, a correction is natural; after a fall, a rebound is expected.

Markets are never smooth sailing; they are inherently turbulent, as shown in the chart below:

If you believe that a bull market should look like the chart above, then you’re not suited for stock trading. You should sell and exit now. The real bull market looks like the picture below—sometimes soaring, sometimes plunging. Only then can the market reach the other side of success.

Of course, when the market and individual stocks fall, it’s understandable that everyone feels uncomfortable. I get it, but feeling bad doesn’t change anything. Even the major players aren’t happy because they can’t make money when prices fall; they need the market to rise to profit. So, how can they profit when the market goes up? I won’t say more.

Overall, this week might continue to be tough, though perhaps slightly better than today. But it’s still not the right time for a market rally. We need more patience, waiting for the right timing. That said, today is Lantern Festival, and the stock market isn’t giving out red envelopes, so I can only send my blessings. Happy Lantern Festival! May your wallet grow thicker soon!