3.13 Review: High Standards Brutal Sweep Electrical Grid Dream Shattered, Quantitative Chaos Dance Cycle Ending and Beginning of Disorder

The market has once again taught a harsh lesson with cold reality. This is not just a simple correction but a dual retreat of emotions and funds. Power grids, optical communications, computing power—all the previously hot stocks have almost completely failed. When the old speculative stocks that serve as safe havens hit the daily limit again, the signal is very clear: a tide of retreat is coming, shrinking defenses, waiting for the next cycle’s dawn. [Taogu Ba]

Following the Trend
After the indices surged and then pulled back in the morning, they failed to rebound V-shaped in the afternoon and continued to decline, ultimately closing lower across the three major indices and revisiting previous lows. Trading volume was 24.003 billion, with a slight decrease of 416 million. From the structure of the average stock price, the three days of adjustment have basically wiped out the previous rebound gains. However, the box pattern remains intact, and the weekly chart still points upward. The overall expectation remains to continue observing sideways movement.

Compared to the indices, the thematic stocks are even weaker. Today, disagreements within the power grid sector widened, and a loss-making effect began to appear. The sectors with rising stocks are mainly driven by rotation of quantitative trading themes.
The first is chemicals, especially fertilizer supply chains, mainly impacted by Middle Eastern geopolitical conflicts. Thirteen stocks hit the daily limit today, with a total increase of 12.123 billion. Golden Bull Chemical hit three limits, with two more stocks hitting two limits, and nine stocks opening at the limit. Compared to yesterday, which focused on coal chemical industry, today shows signs of rotation and switching, with some divergence expected after continuous gains.
The second is wind power. News yesterday announced that the UK will cancel 33 wind power component import tariffs starting April 1. Today, nine stocks hit the limit, with a total increase of 12.294 billion. Jindian Heavy Industry hit two limits, with seven stocks opening at the limit. Both logic and momentum suggest limited expectations, mainly rotation.
The last is energy storage, with seven stocks hitting the limit, totaling 15.632 billion, all at the first limit, unlikely to sustain.
The more important focus today remains on disagreements within the power grid sector. Of the eleven stocks that hit the limit yesterday, only Huadian Energy survived, while others all declined, especially those with high popularity and recognition like Meili Cloud, Shun Na Shares, Yunnan Energy Holdings, and Hanlan Cable, which was close to hitting the limit yesterday. The sector clearly shows a loss-making effect. Coupled with the fact that optical communications led the decline yesterday, the main hot spots are now shifting into correction, leading to greater chaos in thematic layers.

Emotional Fluctuations
Market sentiment continues to weaken, with widespread declines—over 3,600 stocks fell today. Although the banking sector tried to support in the morning, the indices continued to slide in the afternoon without pause.
The speculative sentiment that warmed earlier than the indices has been constrained by the overall trend, turning into divergence. Today, the number of stocks hitting the limit increased to 13. Most notably, the recent hot stocks with high targets are experiencing widespread declines: power grid stocks like Yunnan Energy, Shun Na, Hanlan; optical communication stocks like Guangxun and Huagong; computing power stocks like Huasheng and Tuowei—all suffering, which is a very typical sign of retreat. The loss-making effect is emerging, causing market funds to become more cautious and shrink.
Today’s risk-averse signals also appeared, with previous limit-up stocks like Jiamei Packaging, Zhenai Meijia, and Fenglong Shares also showing signs of retreat.
Tomorrow’s Reflection
Yesterday, I felt that the power grid sector was somewhat lacking as a pure main theme, and worried it might be the last glory. Today, it chose to retreat directly. Since the market has chosen its direction, we should respect the market and stop imagining further glory. Unless the concept index fully recovers and volume surges to new highs, it’s not worth paying further attention. Otherwise, subsequent rebounds are more likely to be opportunities to exit.
The bigger possibility ahead is facing a chaotic situation of warlord battles. On one hand, previous hot spots may see repeated rebounds, but mostly individual stocks will play out, and the difficulty is high. Whether it’s power grids, optical communications, or chemicals, all could be affected. On the other hand, thematic rotation will become faster and more frequent. Under news stimulation, one-day trading opportunities will increase, making chasing impossible for quantitative strategies, and lurking ineffective due to unpredictability.
Therefore, if yesterday’s idea was to continue holding and wait for a breakout point, now it’s even more important to shrink further. Being fully in cash is best; if not, entertainment-focused trading is the only option. Be patient and wait for market signals rather than speculating. During the last oil and gas retreat, some believed conflicts would continue and oil prices would keep rising, and themes might return. But after continuous declines, everything returned to dust and earth.
From a cyclical perspective, after chaos, new growth will emerge. Cycles remain unchanged, and the cycle of rebirth continues. Just wait for the restart!

Trading Insights
Today, I reduced my holdings. GCL System Integration was cut in half; the remaining position is being held for potential support, to observe on Monday.
Yesterday’s low buy in Shun Na was sold off today as it weakened proactively.
Yunnan Energy Holdings was too subjective today; I tried to do a T on the low in the morning but sold out after weakness in the afternoon.
No new positions were opened all day.

Post-market holdings: Yunnan Energy Holdings, GCL System Integration.

Data Summary

☑ Disclaimer: The above is only my personal review notes. Any opinions or individual stocks mentioned are for illustration purposes only and do not constitute any investment advice. Please do not blindly follow. Trading involves risks; invest cautiously!
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