[Red Envelope] Alerts two days in advance that the index will experience a pullback for confirmation, allowing precise control of the market's small rhythm.

Short-term trading is an art. It uses the ever-changing market as a canvas, keen insight as a brush, and decisive execution as the paint. A true masterpiece is not born from the chase of random fluctuations but is completed through the precise capture and resonance of the market’s core “strength”—drawing direction at the boiling point of emotions, structuring layouts amid sector rotations, and finally adding the finishing touch at the moment when individual stocks lead the charge. ————The Compounding Artist[Taoguba]

**Artist’s Review: **

Thank you for your support, dear family! Since I can’t make the Rising Stars list right now, I’m not getting as much exposure as before, so I kindly ask everyone to use your lovely little hands to like, comment, cheer, and tip to help boost some popularity. Writing review posts every day requires persistence and a source of motivation, which you all can provide. Thank you, family!

Wasn’t yesterday’s index rehearsal extremely accurate? I directly stated that the index would continue showing divergence, and if the divergence was clear-cut, it would be corrected during the session. Isn’t the timing precise? The early market auction directly opened lower to around 3850. Observant friends might have noticed that this position was exactly where the market opened on Tuesday. Seeing the index open low at this point indicated support. If one grasped the timing well, adding a position at this level would have allowed for intraday T trading. In this low-volume market, especially with the recent continuous declines in the index, many people are like startled birds, becoming anxious whenever the index drops, which is completely unnecessary. By looking through the numbers, one can see the essence and grasp the inherent logic of the index’s movement, capturing some small fluctuations in the index under the current market conditions, hitting the right timing, standing in a safer position, stepping ahead of others to make the correct moves, and leaving the risks to others.

On Wednesday, when the index surged, my review post reminded everyone that a pullback confirmation would occur later. From the movements on Thursday and Friday, the index’s trajectory mirrored what was mentioned in that day’s review. I timely informed everyone that a pullback confirmation was on the way, having already foreshadowed Friday’s index script two days in advance; the advance notice was ample. You can check Wednesday’s review post to see that it clearly stated the need for a pullback confirmation, and this wave of index projection was spot on, without any errors!

Regarding commercial aerospace, didn’t yesterday’s review also indicate that when attempting to card power divergences, one should pay more attention to those with stronger initiative? Those who are clearly at an advantage yet hesitate to board, needing others to lead, are relatively lacking in comparison. For example, in yesterday’s fluctuations, Shenjian Co. was the first to board, while others with positions waited until someone else boarded before timidly following. Today, in a sector without strength, only Shenjian ultimately succeeded in boarding, while the following stocks underperformed significantly.

The index has shown extreme contraction for two consecutive days. Against the backdrop of previous rapid declines, yesterday’s index experienced a significant pullback after a rebound, but the volume showed a clear contraction, reflecting that the current market funds are in a state of lying flat, and panic selling cannot be triggered momentarily. This also serves as a reminder that the current index is relatively safe. After opening low near 3850 this morning, it maintained an upward trend throughout the day, and the intraday index showed notable resistance around 3900, also exhibiting extreme volume contraction. From the volume over the past two days, it is clear that market funds are primarily guiding the sentiment, while cautious funds have not dared to step in, largely due to the unpredictable changes in outside circumstances. Since there has been no behavior of rushing out among market funds during the recent big ups and downs, we also have no reason to fret about the index continuing to undergo significant pullbacks unless the situation truly turns sharply downwards. As for the situation over the weekend, there haven’t been any unexpected developments so far. As long as there isn’t a major deterioration, even if the index is impacted by the situation when it opens on Monday, it can quickly digest the news impact shortly after opening and will subsequently return to its inherent trend. Currently, the index shows a clear trend of stock game-playing, characterized by the inability to sustain high intensity continuously. Themes tend to rotate quickly, so while keeping an eye on the index, one must also grasp the rhythm of individual stocks. In such times, some settings become unnecessary, and when a surge occurs, it is more appropriate to take profits in a timely manner, especially since there are gaps above the index that need to be noted for pressure at those gap positions.

**Today’s Market Analysis: **

From the index perspective, the external market shows a continued downward trend, yet the pre-market Japanese and Korean markets did not exhibit excessive panic, unlike before when a direct circuit breaker occurred. Therefore, our current situation is relatively safe. The index opened low around 3850, then directly opened lower and rose higher, oscillating upward, with multiple pullbacks around 3900 that did not break. In the afternoon, several battery sectors resonated and strengthened, leading to an overall index increase, ultimately closing at 3913.72. In terms of volume, the two markets saw a transaction of 1.85 trillion, a decrease of 4.65% from yesterday, totaling 903 billion, showing two consecutive days of shrinking volume. At one point during the session, the estimated volume was only about 1.7 trillion, indicating a significant contraction in volume. From the sentiment perspective, there were 78 stocks hitting the limit up, 2 hitting the limit down, with 4156 stocks rising and 957 falling. Yesterday’s limit-up stocks averaged a 2.1% increase today, showing a clear profit effect, and there generally exists a premium in the short-term relay direction, although the mid-cap stocks saw a notable pullback.

From the sector perspective, the sector themes rotated quickly, maintaining good strength. The lithium battery sector was strong throughout the day, with a complete echelon, with Rongjie Co. hitting the limit up four times, Shida Shenghua twice, and multiple first-time boards as well. The pharmaceutical sector also maintained its strength, with Meinuohua hitting the limit up four times, and several stocks recently showing multiple boards. The power sector faced a divergence pullback, with mid-cap stocks experiencing widespread declines, while low-priced rebound and high-priced core stocks continued to maintain some strength. The chemical sector, computing power concept, AI hardware, and commercial aerospace themes also maintained rapid rotations, with core stocks in the front row boarding. Overall, the day saw rapid strong rotations among themes.

**Artist Talks Sectors: **

1. Pharmaceuticals
The pharmaceutical sector has been performing strongly recently, consistently resonating with the index during its rebound. Currently, the sector’s top stock is Meinuohua with four boards, followed by Wanbangde and Laolong Shutaishen, while the elastic arbitrage stock Huo Jing Biology also successfully boarded today. Another stock, Laolong Ji’an Medical, has been following a trend style and is gradually climbing. Overall, the sector is still in the category of a rebound from oversold conditions, with many of the active stocks being recognizable old varieties. The need for divergence realization is significant, especially with the index shrinking and in a stock game-playing situation; it carries substantial risks to directly engage with a strongly consensus sector. Here, one can wait to see if the sector can show a good divergence before considering involvement.

2. Power
Yesterday, Huadian Liaoning Energy crashed at the end of the day, so today’s normal expectation is for it to open underwater. The morning auction was also briefly pressed down, but then capital directly pulled it up, opening high. Huadian Energy also opened underwater and continued to rise after the opening. Although Huadian Liaoning Energy did not show significant negative feedback, the sector faced divergence, leading to basic declines among mid-cap stocks. Hence, I have always emphasized the need to be cautious about mid-cap stock risks. For Huadian Liaoning Energy, this was a critical point for breaking the board. Yesterday, Guangxi Energy led the rise and boarding during the divergence of the sector, so normally today’s expectation was for it to hit a limit up. Jinkong is a handover upgrade under the same position, while at the end of the day, YN Holdings successfully boarded after experiencing two consecutive days of pullbacks, bringing back some activity to the power sector. However, mid-cap stocks overwhelmingly faced significant declines, indicating that the returning strength is not very strong. Given that Huadian Liaoning Energy, Huadian Energy, and YN Holdings did not provide significant negative feedback, the low-priced rebounds still possess some strength, while other sectors generally only dared to attempt switches during the power divergence. Therefore, the power sector likely has some expectations moving forward. The focus should remain on low-priced rebounds, with the normal expectation for repairs next Monday due to the continuous divergence in the sector, anchored primarily on the three core stocks in the front row, while the low-priced rebounds mainly depend on whether Guangxi Energy can continue to provide some strength.

3. Batteries
The battery sector has also emerged multiple times attempting to perform recently. Yesterday, when Huadian led the power sector’s divergence, the battery sector began to show movements, particularly in the materials and lithium mining directions. On one hand, the lithium mining sector has a recent price increase logic, with prices continuously rising. On the other hand, the annual report forecast time is approaching, and for the battery sector, there are basically no issues with the annual reports, ensuring performance. Today, while the power sector continued to show divergence, the battery sector showed signs of capital inflow again, with the high-profile Rongjie Co. hitting the limit up four times, and Shida Shenghua hitting it twice, while the weight stock Ganfeng Lithium also successfully boarded. Recently, during the power sector’s divergence, several directions have already shown capital inflow behaviors, which may serve as potential new directions to replace the power sector. Capital is continuously trying out different themes during the power divergence. Currently, the battery sector’s performance appears the strongest and most promising. However, last Friday, the battery sector also saw a concentrated breakout, showing somewhat of a consensus character. Rongjie Co. with four boards is in competitive relations with Meinuohua in the medical sector under the same position, both emerging as new directions during the power divergence. Moving forward, it is uncertain whether the battery sector can maintain its strength during future power divergences. If participating in the battery sector, one should also wait for divergences and observe how the power sector’s repair strength behaves. If the repair strength of the power sector does not meet expectations, capital may return to the battery sector. Focus on stocks in the battery direction that have shown strong recent performance, especially those outperforming the index.

4. Computing Power
The computing power sector had an overall average performance in the morning auction. Yesterday, the stock Aoride that exploded was briefly pressed down to the limit down. However, Gui Guang Network opened directly on a limit up due to news, which also affected Aoride, leading it to surge directly and quickly board. At the end of the day, quant funds began to aggressively acquire Huawei-related computing power stocks, such as Liquid Cooling Chuanrun Co. being directly seized to hit the limit up. The computing power stocks Tuowei Information and Huasheng Tiancheng also saw significant buying, likely due to the search for news related to Huawei. This opportunity is quite challenging to grasp. From the overall performance of computing power, it reflects more of a choice under market rotations, lacking certain sustainability. Most stocks within the sector are in the realm of oversold conditions, likely showing some demand for a rebound. The leading stock Aoride lacks the ability to drive the sector, making it hard to set the rhythm of the sector. Moving forward, it can be observed mainly with a focus on buying the dips in oversold conditions.

5. Commercial Aerospace
During the morning auction, Shenjian Co., which boarded yesterday, opened low, as did Zaiseng Technology and Western Materials, which had positional advantages. The auction indicated that the strength of today’s commercial aerospace sector was below expectations, and it could be seen as a divergence opening in the morning. The pre-market thought was to consider the front-row core after the intraday divergence, like yesterday’s most proactive Shenjian, which was given ample time and a good position to board. Western Materials, which surged at the end of the day, was still hit down, while Zaiseng Technology oscillated underwater throughout the day. Currently, commercial aerospace mainly attempts to make movements amid the divergence of the power sector. Over the past two days, the strength of the sector is evidently insufficient, with only some stocks within the sector showing fluctuations, overall leaning towards rebounds after oversold conditions, lacking much certainty. Dips are a relatively suitable point for entry, and the sector’s divergence force can be continuously observed to see if it can break away from the power direction and lead to a good rebound.

Every morning there are news insights and core stock selections. Family members, pay attention to the artist, keep up, and avoid getting lost. The morning content is basically what I’ve organized regarding the expected sectors in the market!! Please like the posts, and you can also reward points or cheer!

**Having heard too many grand theories and market theories, many people still do not know how to implement them. Therefore, I share my “Strength Pyramid System,” which can bring you growth and is worth your serious consideration. Those who always want to exploit without cost can only remain on the surface of trading. My original intention is to hope that those who are destined to read this post will no longer be confused. However, the market will eventually evolve. Likewise, our “Strength Pyramid” system will also evolve. In the future dynamic market, I will also add new “dimensions” based on different market conditions to make it more adaptable to different market cycles. **