Has the SSE Composite Index's third-largest single-day decline since the "924" market event occurred, and is the bull market still ongoing?

Ask AI · How do the current bull market and historical cycles differ and resemble each other?

September 24, 2024, marks an important starting point for this round of the A-share bull market. Since the “924” rally began, this bull market has been running for a year and a half. However, during this period, the A-share bull market has not been smooth sailing; it has experienced multiple sharp rises and falls.

Since the “924” rally, the A-share market has experienced 10 days with declines of more than 2%. On April 7, 2025, the market even saw a single-day drop of over 7%, with the index returning to around 3,000 points.

On March 23, this year, the A-share market again saw a major decline in a single day, with a drop of 3.63%. Based on this single-day decline, it ranks as the third-largest drop since the “924” rally. The largest and second-largest declines occurred on April 7, 2025, and October 9, 2024, with drops of 7.34% and 6.62%, respectively.

The Shanghai Composite Index fell 3.63% in a single day, temporarily breaking below the 3,800-point mark. On that day, the trading volume increased by 145.4 billion yuan compared to the previous trading day, reflecting rising market anxiety. The increased volume during the decline can be seen as the start of a new downward trend or as the “final drop,” depending on whether the current market index remains in a bull phase.

According to the definition of a technical bear market, a decline of 20% from a high indicates a bear market. Taking the Shanghai Composite Index as an example, the recent high was 4,197 points. A 20% decline would be about 3,357 points. This means that if the index effectively falls below 3,357 points, a technical bear market would be confirmed.

In addition, the current market position can also be judged by the half-year or yearly moving averages.

For the Shanghai Composite Index, the current yearly moving average is approximately 3,728.85 points, indicating that above this level is a bull market, and below it is a bear market. The 3,728.85-point level will be a key dividing line between bull and bear markets.

Taking the Shenzhen Component Index as an example, its current yearly moving average is about 12,146.32 points. The Shenzhen market still has over a thousand points of space below the moving average, so it may be more difficult for the Shenzhen market to enter a bear phase compared to the Shanghai market.

Based on these two methods, the Shanghai index remains in a bull market environment. As the index fell below the 3,800-point threshold during trading, it indicates that the index is getting closer to the support level of the yearly moving average. If the index ultimately falls below this level, it would mark the official end of the “924” rally.

Over the past twenty years, the A-share market has generally experienced a “short bull, long bear” pattern. Moreover, the duration of bull markets in A-shares typically does not exceed three years, usually lasting one to two years.

For example, during the major bull run from 2006 to 2007, the A-share market lasted about two years, rising from 998 points to 6,124 points, achieving several times the initial value within that period.

Similarly, during the leveraged bull market from 2014 to 2015, the bull run lasted less than a year—about ten months—but still doubled the market index.

In the current bull market, since its start on September 24, 2024, it has lasted only about a year and a half. Based on the analysis of the past twenty years of bull run cycles, this bull market is now in the mid or late stage. When the market effectively breaks below the half-year and yearly moving averages, it will be a key indicator that the bull market is ending.

The third-largest single-day decline since the “924” rally is related to multiple factors.

Among them, the strong resurgence of the US dollar has accelerated global capital flows, leading to capital outflows from gold and emerging markets. Additionally, ongoing geopolitical tensions in the Middle East have heightened market concerns. Furthermore, high oil prices have raised fears of imported inflation and may impact future monetary easing expectations.

However, market conditions are always changing, and both internal and external environments are in flux. When tensions in the Middle East ease and oil prices stabilize, the stock market may experience a short-term rebound.

Compared to mature markets in Europe and America, the valuation of A-shares is relatively low. After recent sharp declines, the valuation of A-shares has fallen back to the lower end of the reasonable range, reflecting an increased attractiveness for investors. The vicinity of the yearly moving average may become a “golden pit” for A-share investments.

Author’s note: These are personal opinions and for reference only.