[Red Envelope] 4.7 Thinking for Twice the Results with Half the Effort

At this point in the market’s operation phase, reviewing things is already not very meaningful to me. It is also not very meaningful to my classmates in front of the screens. A simple post to record my intraday thoughts might be more suitable for what’s going on right now! It doesn’t necessarily mean everything is correct—just look at it objectively. Also, remember to discuss intraday ideas, not to hype up ticket prices, and so on. The market will validate it afterward~[TaoGuba]

Today, the most prominent order-book signals in the market are that the “micro-cap stocks” index first completed a second bottoming and then repaired and stabilized, while at the same time the “ChiNext Index,” which represents institutional trend-cap capacity stocks, still has not finished its second bottoming—up to the close it’s still an indecisive negative candle (yin K) and there is no sign of a stop to the downtrend.

It may seem like a small sentence, but it is actually the most core guidance today, because every choice we make intraday is built around this!

We know micro-cap stocks represent more of the market’s sentiment. So starting from sentiment, it’s easier to get twice the result with half the effort. For example, at the open, micro-cap stocks clearly repaired while the ChiNext Index dipped—then it’s directly better to go find the corresponding underlying to do it today, which is also easier to resonate with the market.

So, who are the recent sentiment directions?

Actually, if we look at abnormal trading (price spikes), it’s very clear: one, Farsun Sheng? last week bypassed the abnormality then surged today; Xinghui Huaneng challenged the abnormality, and even intraday there was still premium and it managed to hold steady at a high level. The “chemical” direction jointly boosted by these two is the strongest today. If you understand it, you need to chase strong stocks and do limit-up/board-catching;

Two, the “medicine” direction pointed to by the abnormality-challenging Tianyao Yao? (Jin Yao?), which is prioritized intraday. Last week during the disputes it should have been weak but wasn’t weak—today’s intraday time-and-sales show proactive strength first, so the divergence low-buy opportunity is Wanfangde? (Wanbangde). After the close, I统计了一下 and found that quite a few hardcore fans realized this, so it wasn’t in vain learning;

Three, to untie the bell, you need whoever tied it. This wave of the rebound-sentiment that makes the “main decliners” (or the primary fallers) are “electric power.” Why was the market so hard to trade last week? Why did we take eight days off within the mode and avoided for seven days? Because electric power kept failing to stop falling. Every time it dragged down, it set the lower bound for making mistakes when pulling up themes. That resulted in too low a tolerance and liquidity exhaustion. This is also the culprit behind many teachers being buried with consecutive limit-downs last week. Of course, if you don’t realize this and still go out to learn Sun Ce’s “sail out and charge hard,” then that needs verification.

So today the electric-power short-side “dragon”—Guangxi Energy—has stabilized and repaired since last Friday’s four straight limit-downs; electric-power’s older core “Hua Dian LiaoNeng” has stabilized and stopped falling with the 20-day line. The repair in older electric-power cycle stocks like Tongxing Energy Ke? (G鑫能科?) also shows that the short side in sentiment has signs of exhaustion. Therefore, if you have to choose something intraday, personally I would choose the intraday acute-stop attention to “Hua Dian LiaoNeng.”

These are today’s main three sources of money-making effects. As for why the choice is Hua Dian LiaoNeng—it’s actually pretty straightforward. Today I’ll keep it simple for the classmates:

Within my system, there’s a method to improve stability and certainty called “capital consensus memory.”
For example, today Tianyao Yao? actively broke through the abnormality via consecutive boards. Will the capital then think of the older big leader from the previous wave that also actively broke through the abnormality—“Hua Dian LiaoNeng”? Obviously you can’t avoid it. Even as long as it hasn’t broken Hua Dian LiaoNeng’s recent high, the play is still within the height space that Hua Dian LiaoNeng provided in the short term. When there is capital consensus, there will be off-exchange buy orders and liquidity—liquidity is the first point. It’s like when you see Tianlong Shares with a 10-lot consecutive board run, you’ll think of the previous Shenglong Shares 14-lot consecutive boards—the same logic. Then you can reverse-think: the latter can go on to create a second wave (or short-term gains);

Second is capital’s true willingness.
Like why on Tuesday of last week many teachers tried to reverse-nuclear (counter-sentiment buy after a selloff) in electric power but failed—and then in the following three days they were consecutively buried? And why I also knew that on Tuesday of last week there might be a collective reverse-nuclear, but I didn’t participate? The most core point was always overlooked by many traders:
We can go back and think—on Tuesday of last week, the reverse-nuclear was first against Hua Dian Energy, and then it drove Hua Dian LiaoNeng. The reason is that Hua Dian Energy had no abnormality, while Hua Dian LiaoNeng did. That reflects capital’s first point of insecurity: “Attacking in the direction with the least resistance.”

Keep looking further—within the previous electric-power cycle, who was higher status between Hua Dian LiaoNeng and Hua Dian Energy?

The one that actively broke the abnormality first, and had the highest height and the strongest initiative, was “Hua Dian LiaoNeng.” Hua Dian Energy, on the other hand, was the one that followed along the sentiment premium from Hua Dian LiaoNeng and got pulled back. So if you don’t reverse-nuclear the big brother Hua Dian LiaoNeng but instead reverse-nuclear the little brother that’s just riding along first—doesn’t that make it seem like the big brother lost initiative? Aren’t you not worried that the little brother will betray? So this is the capital’s second point of insecurity: “The wrong carrier for reverse-nuclear.”

Finally, there’s the issue of the timing/node. On Tuesday of last week, the electric-power second supplement selloff—whether it was the micro-cap stocks index or the index itself—was still at a relatively high position. When adjusting downward, there was no sign of stopping the fall. And electric power is a resonance with the index and resonance with the micro-cap stocks index. So on Tuesday of last week, when the index was at a high level and the micro-cap stocks index began to fall in the middle of its downtrend continuation, the reverse-nuclear node itself was basically fake. Trading needs to go with the node and the trend. If you go against the current, you can only be drowned.

So the reverse-nuclear in electric power last Tuesday was the “risk window” within the model.
Even if the night before on Monday I predicted that there would be capital reverse-nuclear after the second supplement selloff, I still didn’t consider participating. Those decisions must be made at the very first moment when you’re on-site/at the screen. Otherwise, the limit-downs on Wednesday, Thursday, and Friday could instantly bury your account.

Looking at it the other way around, today is exactly why I chose electric power today:

One, in the chemical-electric power same-stage products, there’s capital linkage memory; when chemical is high, electric power often has a low risk-reward ratio and fewer “low-level opportunity” setups;
Two, after Xinghui Huaneng showed abnormal trading and still had premium without following through with a selloff, Tianyao Yao? actively challenged the abnormality; stubborn funds in the market are all positive feedback. Capital memory maps to “Hua Dian LiaoNeng”;
Three, the timing is correct. The micro-cap stocks stop falling and repair, the short-side dragon Guangxi Energy stops falling and stabilizes. It dared to reverse and wrap Hua Dian LiaoNeng with initiative rather than other Hua Dian Energy names, etc.;
Four, within our “Tutu” system, the old mode of “playing before the abnormality” provides relatively short-term liquidity. And in this sustained shrinking-volume market nearing 1.5T in trading volume, relatively abundant liquidity is the most valuable resource. This is also why in weak markets you should group up—because when you group up, there are both money inflows/outflows and liquidity. In other directions, liquidity is easily sucked dry by the group. And in the end, it exhausts!

So within the model today, the aesthetic choice was that Hua Dian LiaoNeng opening at a good low position—that’s a solid selection. After the close, it also resonated with the market.

Next, let me talk about some views on themes:

Innovative drugs
Maintain the main pre-market view. Before Tianyao Yao? has a major divergence, there are expectations for repeated capital arbitrage. It’s similar to back then when electric power could be played repeatedly even before Hua Dian LiaoNeng’s Thursday board break—when there are stronger board-break + major divergence expectations, it’s easier to get trapped in the middle and back ranks. But as of today, Tianyao Yao? has already reached a seven-board height. In the future, major divergence expectations are getting closer and closer. Therefore, over these past few days, the strength of “wrapping back with strength” in medicine has started to be less than expected. So going forward, be more careful. Like today, many classmates saw Tianyao Yao? actively break through the abnormality and switch into Wanfangde intraday—there’s no issue with that, similar to how Hua Dian LiaoNeng breaks through to switch into Hua Dian Energy, just like Yuen? Holding. But today Wanfangde at high levels surged with large volume to grab the late-session. Overlay that with Tianyao Yao? nearing a major divergence board break—after that, the medicine sector’s risk-reward ratio decreases. So you can only consider fast in and fast out.

Fiber optics, technology
This wave of resonance market bottom rebound has the best-performing stocks. Today still looks healthy: no nasty follow-through selloff, and no high-level explosive volume. In the short term, I have to be very objective and say: “Maybe it hasn’t finished yet.” But the problem is also obvious right now: “It has risen too much and too high in the short term.” That causes off-exchange demand to shift from mindless low buys to a stance of “If it rises more, I still don’t believe it.” So today, when the index repairs, it actually starts to lag behind repair initiative. Even several moves have been tech adjusting first to create divergence for the index, and most of the core money also began to shrink-volume routes. So overall, the risk-reward ratio is just average. It suits trend players who already have profit cushions to repeatedly low-buy support lines—until the next day when you can’t reverse-nuclear anymore and the opportunity is declared over, then you exit. For latecomers it’s awkward: if it’s right, maybe you only get a small upside space; if it’s wrong, you get hung up on the top of the mountain.

Electric power
This old cycle is gradually stopping the fall and repairing. After a short-term oversold bounce, the short side has become exhausted. There exists a 1-3 day oversold repair micro-cycle. The overall risk-reward ratio is quite good. At least this environment gives downside low-buy opportunities, and the expectations gap is also sufficient. In stock selection, try to choose names you can’t really avoid. But note: since today Hua Dian LiaoNeng has initiative, when will sentiment cool down in the future—specifically when electric power will diverge. At this moment, Hua Dian LiaoNeng is playing the role that Yu Nang? Holding played last week. For example, two weeks ago Friday, Yu Nang? Holding’s abnormality day ended with a last-day limit-up that couldn’t be held back. The weekend continued to “top off the cup.” Last week sentiment collectively sold off and dragged down; electric power also supplemented the selloff. And Hua Dian LiaoNeng is also the last-day abnormality for this week Friday. So within electric power, “Hua Dian LiaoNeng” is still only suitable for gaming under the premise that before the abnormality it hadn’t “grabbed too high consistency,” and it hadn’t “grabbed limit-up” hard enough to suppress the abnormality. The same applies to the high-level one-body group like Tianyao Yao?, Xinghui Huaneng—only under the premise that it hasn’t “cooled down” enough. For the short term, if it turns into consecutive positive days, it leans toward building a double-top expectation and is a playground for the do-T crowd, until the “expectation is realized” for the 4.10 abnormality breakout starts to appear—when high consistency can’t suppress the abnormality. Then pay attention: when you’re trading expectations, don’t chase expectations into expectations. Keep doing fast in, fast out. In terms of positioning, it’s more like a transition-week arbitrage rather than a continuous second-wave persistence.

Chemical
The strongest intraday and the whole day fermentation. If the market were a bit better, you could hype it up. But in this weak-market environment, everything that can think of full limit-ups and big gains is what’s already run. Tomorrow can only accelerate. And recently, the market’s biggest fear is acceleration. Plus today’s strongest theme is likely to補跌 the next day in a weak setting. So overall the risk-reward ratio is the lowest. It’s not a “one-day tour” full run—if the backhand wants to play, they have to wait for divergence first and only then look delayed. Firsthand party gets the feast. In this environment, chasing acceleration is like being killed: once you rush in, the guard’s ban-station would wrap your neck and you get stuck on the spot, and you’ve already entered the job.

It’s only been two days since the break—you’re not even at full break yet. Many hardcore fans who miss it a bit too much are asking me to come back, like you might be a little tempted by my body? But since I’m a fan-focused host, I’ll keep using my phone to casually talk and blow a bit of talk for the classmates on the route while playing around outside. It only represents personal viewpoints. Market validation afterward, not a recommendation.

Also, over the short term, the index hasn’t dropped to probe 3974 and show a second support; before that happens, it’s mainly small-scale hedging/arbitrage as a transition. Keep the pattern: less holding/grandeur, less chasing limit-up boards, and more low-buys on the left-side trading principle. Keep your position size controlled too. After all, the situation with the U.S.-Yi? (Meiyi) is changing a lot, and that’s pretty bothersome. As for future market performance, the review afterward might not necessarily replicate what happens. I’ll just talk about ideas for intraday offense or defense each day—maybe it’s more helpful for everyone’s growth in a weak market.

Wishing you all the best