[Red Envelope] Four milestone lessons—can everyone understand them? Today, a slightly different signal has appeared!

Today, the market rebounded as expected, bringing a corrective recovery. The last day before the holiday clearly pointed out, “A second ice point is a bearish-market moment to catch the rebound.” Today’s tape validated that call. This isn’t luck—purely the market’s reward after you nail the “timing” node. There’s nothing to brag about. Since this period, ongoing external conflicts have kept disrupting things, and the market’s difficulty is visibly increasing. For a trader like me, who has spent years not expecting anything from a bull market, lowering expectations and respecting the market—no matter what the chart looks like—keeps optimism intact. During this period, my cognition has steadily improved in real trading practice—that’s enough!!! [Taoguba]

Recently, I’ve seen a lot of people complaining about the quant trading era, obsessively reminiscing about the traders of the “rocket launcher” and the “nuke button” from the prop-trading days. As someone who got results back then, I’ve always been puzzled: why do traders always get stuck in the past? If you really return to that rhythm, most people will only lose even more badly—not at all like the fantasy of sailing smoothly. Mature traders never dwell on the past; they always focus on what’s in front of them and live in the present. Adapting flexibly to the market’s ecosystem is the very foundation of survival. Some people also talk a lot about “low-frequency focus,” but most people understand it the wrong way. Real low-frequency focus is absolutely not about putting up “low-frequency focus” opinions after you’ve made money. Instead, it means waiting until the main trend is clear, then staying fully committed to the main trend for the entire time; the rest of the time, you firmly stay in cash. Right now, with no main trend and the index weakly chopping, the ability to perfect position management—only taking trades for small-node arbitrage, honing your skills and upgrading your cognition in practice—is also a benchmark of a real expert!!!

Looking back at the recent market, every turning point in the index—we accurately hit the nodes. This is the power of timing, and also the victory of the system!
1）On March 24, the market had an oversold rebound. The day before, I clearly predicted that the next day would start an index rebound cycle, which was the first rebound node to be heavily positioned. At that time, the index had already formed a stage bottom structure and hasn’t broken down since—perfectly validating the judgment. This is the starting point of the rebound cycle and also the key window for the first time to take a heavy position.

2）On March 27, the market’s divergence continued, and again I gave the key signal: the rebound cycle was officially established, but you need to start reducing positions! The rebound’s initial stage after a violent drop is the strongest. As time passes, profit-taking accumulates, and the rebound strength will inevitably decline step by step. If you don’t reduce positions here and the rhythm flips against you, it’s very easy to turn from profit to loss. This step of reducing positions is what keeps your profits.

3）On April 2, the market shrank to 1.8 trillion in volume. The emotional carrier weakened, and I decisively judged: the rebound cycle has ended, and the market has entered the pullback/withdrawal phase! Then last Thursday and Friday, the market kept falling continuously, fully matching the selloff characteristics of a withdrawal period. The early warning allowed the family to avoid the risk of a big drop.

4）Last Friday, I again made an accurate prediction: today (April 7), the market must repair/rebound. Friday was the golden node for front-running the game. Today the market did a conforming “bullish reaction/pro- rebound” as expected; the withdrawal period officially ended, and the rhythm closed perfectly again.

In today’s review, I fully sorted out and shared all the recent key nodes for everyone. The core purpose is only twofold: first, to let everyone deeply realize how important the “timing” system is—once you can time precisely and strictly control your position sizing, even the hardest markets can be handled calmly; second, to manage expectations for what comes next, so everyone finds the right rhythm and avoids stepping into traps or missing opportunities.
1）First, look at the signals of emotion warming up: last week’s rebound node had a continuously decreasing number of limit-up stocks. On March 25, it was 84; on March 27, 78; on April 1, 56. It perfectly validated my earlier view—during a rebound cycle, the profitability effect declines step by step, and you must reduce positions the more the rebound happens. And today I predicted the number of limit-up stocks would break 85; the close at 93 directly delivered that result. This shows that after the market’s withdrawal and consolidation, sentiment has moved into a phase of gradually strengthening, which is also the core logic for adding positions moderately today.

2）Next, look at the “low-volume” signal: today, the overseas market is closed, and Northbound capital is absent. By normal standards, Northbound typically contributes 200–400 billion of liquidity. It looks like volume shrank by 40 billion, but in reality it’s an implicit increase—on the left side, I already anticipated that the market had already seen a low-volume level. Low volume means the intensity of divergence drops sharply. Even if the index probes lower again, it won’t easily show extreme money-losing effects. More likely it’s just consolidation; at most, it’s the last “cut,” providing a safe buffer for short-term trading and tactical games.
3）Finally, I’ll talk about the strategy for a market driven by existing liquidity (a stock-quantity limited market): right now it’s a typical liquidity game. When selling is overdone, a rebound is inevitable; when a rebound is too strong, it must pull back. Last Friday’s front-running game and today’s repair rebound are both precise timing entry points. Tomorrow, Northbound capital returns and the market may have expectations to spike higher. But in a liquidity market, the two days of rebound have already accumulated profit-taking positions; short-side strength will gradually gain the upper hand. Therefore, tomorrow’s core strategy is to realize profits on the spike from today’s positions—don’t linger and don’t chase highs. Just wait patiently for the next divergence-continuation node to enter again. Of course, if you’re good at spotting the “right lows,” those babies can still continue switching into strong core setups.

Themes:
1）Chemicals: event-driven, oversold arbitrage expectations. Today, the chemicals sector performed strongly. The core catalyst is the explosion at the Saudi industrial area, with expectations for global petrochemical supply contraction pushed to the limit. But objectively, this is a typical oversold rebound driven by a specific event; the continuity is doubtful. In essence, it’s an oversold arbitrage logic that isn’t capable of sustained main-line level persistence. For short-term, quick in and quick out is enough—don’t get attached to it.

2）Pharmaceuticals: lifting the small ones to outperform, and high-position arbitrage. Pharmaceuticals right now is a “smaller-scale version of power.” High-level stocks like Jin药药业 and the trend of Wanfangde, mapped against the power Huadian system. Today, Jin药药业 surged again as it had another anomaly. As long as there’s no unseen hand intervention, tomorrow the high-level names still have expectations to spike higher. Tactically, do arbitrage around Minovo’s convertible bond (Mei诺华转债); the cost-effectiveness is better, with a preference for steadiness.

3）Optical communications: the trend is strongest, and the rotation is clear between high and low. Optical communications is still the direction with the least funding resistance. Today, the rotation between high and low within the sector intensified. Fal Sheng opened very high and flashed to a quick limit-up but couldn’t drag the high-level stocks; instead, a batch of first-limit-up boards emerged. This clearly signals the rotation. Tomorrow, the focus is to anchor on the strength of the one-price board (single-tick limit-up) of Huiyuan Communication, judge how strong the sector’s divergence is, and for selection you either buy on the low pull-in the best you can, or choose the very lowest.

4）Electric power: last night’s recap and this morning’s early wrap-up both clearly said that as long as Huadian Liaoneng breaks yesterday’s low point, it’s easy to rebound. If you understood and believed in it, and the things you should be watching—most of the intraday positive feedback were fairly large. The best seasonal timing to act is when the setup appears; a rebound (i.e., repulse) objectively doesn’t consider expectations for making new highs. More likely we temporarily look for a double-top shape. Meanwhile, Jin药药业 keeps showing rising heights, which is also supportive for it—so it’s essentially “walk and watch.”

Profit-making effect:
10cm: anomalies and sudden surges; and stocks around the anomaly that form repeated group trades, for example, Fal Sheng, Wanfangde, Dashengda, XinentaiShan types;
10cm: regulatory-targeted stocks where the pre-gaming starts early, for example, Huadian Liaoneng types;

Today, everyone got an open-door green day. If you finished watching, please help with cheering, tipping, and the triple likes—thank you, everyone!!!

Thanks to the babies who cheer and tip
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