[Red packet] The market continues to ebb, when will the dawn come?

Foreword [Taoguba]

"Understanding the Way 2"

Trading is never about blind hard work.
Only by reaching the extreme can you break through.

Either stick to a set of ultra-simple trading system, be stubborn to the extreme, and strictly follow the rules;
Or act decisively, strike swiftly, and be fast to the extreme.

Ordinary hesitation and entanglement will only be reaped by the market. You must have clear model rules for whether to stay or leave.

I. Market Interpretation:

Currently, the overall loss-making effect continues to spread, and market sentiment has yet to see a stop-loss signal. Market data is weak, with nearly 3,800 stocks falling across the market. The number of limit-down stocks increased to 41, up from 30 yesterday, indicating escalating panic. Short-term capital is fleeing noticeably, and the willingness to go long is extremely low.

Index-wise, trading volume has shrunk for two consecutive days, market activity continues to decline, incremental capital has yet to enter, and under the stock-based game, the market's center of gravity keeps moving downward, further solidifying the weak pattern. Currently, the market is in a dual cycle of post-super-main-line market retreat and chaos, which is a typical characteristic of the end of a major main line.

This kind of dual adjustment cycle is different from ordinary short-term fluctuations. It often lasts longer, with no sustained main line during the period. Hot sectors rotate chaotically and quickly, with spikes pulling back and next-day compensatory declines becoming the norm. Counter-trend operations carry extremely high risks. Therefore, the best trading strategy at present is to watch more and act less, strictly control positions, and resolutely avoid emotional follow-up operations.

At the trading level, there is no need to rush into bottom-fishing for a bounce. Patiently wait for the market to self-repair. Only wait for the market to panic-clear, for the index to stabilize with volume, and for the number of limit-down stocks to drop significantly. When the market shows clear stop-loss reversal signals and sentiment fully warms up, then based on a mature trading model, seize stable entry opportunities.

Looking at popular themes, the previously strong humanoid robot sector continues to weaken, extending its adjustment trend. Among them, the core stock Estun Automation, after holding up against the decline for two consecutive days, gapped down and hit the limit-down in early trading today.

The sector's movement is highly cyclical: after a continuous pullback, the humanoid robot index has completely erased all of last week's gains, showing an extreme retracement pattern of "four days of rise, three days of fall back to the starting point." The accumulated short-term profits have been largely cleared, highlighting the sector's short-term weak pattern.

II. Index Breakdown:

(I) Index Understanding:

In terms of market structure, hot sector rotation is extremely fast, with themes switching repeatedly. Under shrinking volume, the entire market leans more chaotic and disorderly. The Shanghai Composite Index gradually declined throughout the day, closing lower and losing a key threshold. The Shenzhen Component Index and ChiNext also weakened, while only the STAR 50 was relatively resilient, forming a clear divergence among indices. Multiple intraday impulse rebounds lacked capital absorption; the rebounds were volume-less, with selling on every rally. The market's center of gravity kept moving down throughout the day. Two-market trading volume continued to shrink compared to the previous day, activity declined, and capital adopted a wait-and-see attitude.

(II) Consecutive Limit-up Ladder:

The consecutive limit-up ecology in the market has remained weak recently. In the past month, the highest board has never broken through the 5-board pressure level with healthy turnover. The height is firmly suppressed, and the overall profit-making effect of short-term consecutive limit-ups is low. Currently, emotional capital has changed its approach, no longer blindly chasing limit-ups, but focusing on anti-encirclement structures after breakouts. The highest board today is 7 boards, but it came up via one-character limit-up, having limited impact on market sentiment. The second-highest board remains at 3 boards, and the overall trading atmosphere is poor.

For example, today's anti-encirclement second consecutive limit-up stock Tianhai Electronics (secondary listing):

III. Sector Understanding:

(I) Rising Main Line (Contrarian Hugging Capital)

1. Computing Power Leasing (Strongest Intraday Theme)
   Catalyst: Continued expectation of AI computing power demand; capital hugs the low-position data elements and IDC direction.
   Limit-up stocks: Shanghai Yunque Digital, Shanghai Data Port, Wangsu Technology, Nanxing Machinery, Net263 collectively hit limit-up, making the sector the top safe haven for funds that day.

2. AI Servers
   Catalyst: Upstream order prosperity maintained; institutional capital hugs core hardware.
   Core: Inspur Information hit a one-character limit-up; the sector's intraday strength is second only to computing power leasing.

3. Gold and Precious Metals
   Catalyst: Risk aversion sentiment rises; as the market weakens overall, capital allocates to defensive assets.
   Core: Zhaojin Gold hit a anti-encirclement limit-up, showing contrarian repair.

4. Network Information Security
   Catalyst: Low-position sector rotation; short-term hot money for a surprise attack.
   Core: NSFOCUS hit a 20cm big limit-up; Zhongcheng Technology surged over 16%.

(II) Major Declining Sectors (Day's Biggest Loss Areas)

1. Humanoid Robots (Former Main Line, Collective Retreat)
   Logic: Short-term profit-taking; high-position themes collectively retreat; emotional retreat triggers sell-off.
   Limit-down stocks: Estun Automation, Dayang Electric, RIFA Precision Machinery hit limit-down; the sector sees widespread compensatory decline.

2. Lithium Mine and Lithium Battery Resources
   Logic: No strong catalyst in industry fundamentals; after recent rebound, capital exits for profit; cyclical sectors weaken.
   Limit-down stocks: Tianqi Lithium, Youngy Co., Shengxin Lithium Energy hit limit-down; the sector collectively collapses.

IV. Directions to Watch Tomorrow:

(I) First to Second Board Direction: None at present;
(II) Consecutive Limit-up Direction (continuous tracking): None at present;
(III) Anti-encirclement Pattern: Zhaoxin Electronics + GigaDevice.

During the main line retreat period, keep your hands in check, watch more and act less. When the market truly stops falling and stabilizes, the article will remind you in time!

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