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7.10 - Does technology inflow hit obstacles? After an incremental gain of 500 billion, a sudden plunge— the truth is far from being as simple as the technical side
I’m a blogger who starts from the trading tape as the main point, and does strength/weakness analysis and logical thinking.
Today I’ll take everyone through a full-coverage scan from multiple angles. If what you see is useful to you, please follow, like, and thank you.
Today’s tape is like: KTV in the morning, and a sudden shift in winds between bulls and bears in the afternoon. A broad, high-volume pullback happened—and all of this has reasons. Do you understand it?
Let’s get into the tape:
Indexes: the CSI Component Index represents technology. The exact points aren’t actually important anymore—what matters is whether it can borrow yesterday’s momentum, whether technology can regain its glory. That requires incremental demand. I said in my recap post yesterday that an incremental 500 billion in demand is the threshold indicator for a full return across the technology sector. In the early session, we saw an increase of 500 billion. Not too much, not too little—exactly in line with the target. You know very well that tech has rotated back; this volume is the baseline target, and also the key change right now. But the rotation method is different from before.**
Analysis:
1: Two days ago, I said that to restore an uptrend, we needed incremental demand of 1 trillion, and I thought it would be difficult—so at that time I judged that the big-technology cycle would either have ended, or it would only rotate back in specific sub-sectors and no longer fully rotate back across the board. Starting from the lunch break yesterday, the incremental demand reached 380 billion; this morning it jumped to 500 billion. Basically it matches my prediction of a full big-tech rotation.
But here, an expectations gap appeared:
① Who provided the guidance for the rotation yesterday? Rotate from where? We see two stocks with high identifiability: Hengshang Energy Conservation and Hefei Urban Construction (I mean emotional/sentiment pioneers). Why look at them? Because they are the guiding-type “main army” stocks. And this guidance led to the market’s incremental demand of 380 billion. That’s something you’d know from my recap post yesterday. So today at the open, we watch them. Let me say it again: the sentiment “value” of the stocks that triggered these huge chain reactions is as high as three or four floors!
At today’s open, we saw Hengshang Energy Conservation go straight into a one-word limit up, and Hefei Urban Construction opened around 9:00-something. This was within expectations, so it met them. But you also saw TianTian Technology go straight into a one-word board. For a main “army” one-word, it means two things: first, yesterday’s sentiment market highly recognized it; second, the increment capital had a strong bottom-fishing desire.
But the problem came: why couldn’t Hefei Urban Construction—which was guiding yesterday—also go one-word? Why did Guibai Group and Langdi Group open below expectations?
That is the key. I bought Hefei Urban Construction twice in a row—its opening price and 4% below. I need to know why I was wrong, where I was wrong. My trading time was earlier; TianTian Technology’s peers—Unisplendour (Ziguang Co., Ltd.)—were already hitting their limit-up at 10:10. Even the wave-piloting company that challenged the three-board extreme limit—Langbo Information—also shocked toward the limit-up near the end of the morning. These were strong assists. But Hefei Urban Construction never became proactive about going up.
Looking at it alone, it’s not something you can understand. And it can’t be explained.
So let’s look at what sectors rotated in the morning. First, Huanrui Century: it was walking on the defense side yesterday. Today it climbed to the second board and did it steadily with stable limit-up orders and no missed fills. AI applications (consumer-side) rotated strongly in the morning, together with pharmaceuticals. In the middle there were also eye-catching robot themes that pulled.
You’ll immediately have doubts: these are opposing themes. How can they be so strong?
This is when you form the first defensive mindset: don’t add on to tech — it might weaken.
Those themes may be opposing, but because their “capacity” is small, this is theme suppression. It affects big-tech’s chained-board sentiment. We also saw that for tech-style chained boards, besides Hengshang Energy Conservation, there basically weren’t any that could get sustained. It doesn’t affect the main unit army—TianTian Technology and Unisplendour are still stable—but there are clear signs of a loosening in the sector.
Then look at other old-cycle big-tech: they mostly opened high and fell low. Not dead, not alive. That clearly tells you that incremental capital doesn’t want to return to the old way. Since Langbo Information, the market has entered a new cycle. For now I’ll define this cycle as: domestic substitution.
② In the afternoon, an aviation recovery stimulus triggered batch instant limit-ups. This is quant-driven behavior, but it directly caused old-cycle, capacity-type tech to “waterfall” down. Why could commercial aerospace cause big-cap tech to drop? Let’s look at which stocks were instant-limited up.
We can tell at a glance that the stocks that were instant-limited up were actually all aerospace stocks with big capacity.
So once the afternoon came, domestic chips/storage—old-cycle tech ushered in: capacity suppression.
In the morning, it was just theme suppression and the front-runners weren’t afraid. But in the afternoon, capacity suppression directly caused almost all big-cap tech to jump down.
The emotional effect here is huge. That is to say: Commercial aerospace entered a high-open expectation mood on Monday. Meanwhile, big tech entered a low-open expectation mood.
Why? Because their instant one-boards forced big tech to “make way.” That’s the kind of sentiment value I often work on—distinguishing strength and weakness. If you don’t understand, follow me first. I’ll explain step by step.
Quick summary:
Theme suppression shows that emotionally, the crowd doesn’t want to just do trends and “hold.” They’d rather ride the chain-board when volume returns. (Robotics, pharmaceuticals, and other themes.)
Commercial aerospace appears with a capacity posture, changing the strength of the chip industry—this afternoon the chips were beaten badly.
As for other big-tech sectors: once the market opened, they were pressed down right away. You might think others will catch up with a rebound. The market sentiment today has already told you the analysis. They will. But in terms of emotional status, the old-cycle big chicken drumsticks are last.
On Monday, commercial aerospace entered the strong-open interval. The domestic chip line entered a low-open expectation. I’ll write the open expectation in the follow-up post.
Entering the recap advanced section:
1: Cross-shaped space “strangulation”:
The issue of space starts with controlling space.
In May, the market made an effort to do obvious actions to “cap abnormality”—block abnormal price moves—once they capped abnormal moves, then another wave came. The market found a way to suppress it through regulation.
At the end of June, as the market batch entered multiplier shares, trend-high stocks with double-digit multiples were batch “capped abnormal” again. Suddenly a hand of God came out of nowhere: two stocks that had not reached the regulatory height level were suspended one after another, or put under key monitoring. Manual cooling began at the beginning of July. Everyone fell into the predicament of being strangled over and over.
At the start of July, as the heights kept lowering, stocks that could challenge regulation suddenly disappeared. When everyone was in despair, today’s official break above the regulatory height level arrived. Its characteristic is that its float/plate is only around 1 billion.
We need to watch the weekend regulatory attitude—whether it relaxes is unpredictable. But this kind of direct regulation changes market positive sentiment, turning it from sunny to cloudy.
Possibility and prediction: whether it’s just being put on a key watch list, the chain-board sentiment will become激昂—so on Monday a reversal back (back-higher open) will become the strongest emotional direction.
“Black room”: mix and destroy—cut it, sell it. The market will enter high-frequency rotation; making money will be hard. Chasing (in follow-through) will be even harder. As for trend stocks, you can do them but you can’t hold for long. Once big-cap stocks enter, they get pulled like small caps—constantly switching leaders. With space restricted to a narrow corridor: big caps max at 3 boards, small caps max at 7 boards. “Capping abnormality” becomes meaningless (because these recent times were regulation without reason; today’s Yonyan Silicon Research (Youren) is also one).
2: High and low oppose each other; front and back follow each other:
The boundary effect is obvious: “fermentation” no longer means the bigger it gets, the more people buy. Hot front-runners are no longer thousands of billions. As long as it reaches over a thousand billion, the sector stops fermenting ( ).**
Width boundary: the market is split into two battlefields—on the basis of relative capacity. Once a theme with relatively more capacity appears, it instantly becomes a seesaw. Width extension: if a theme ferments to the boundary, it triggers an end signal. I don’t know what the board is thinking. I only know what I see is like this.
For example, capacity boundary: if big tech rotates back in one direction and wants to ferment into all technology, then it immediately ends the fermentation—and other non-matching types will rise to stand up.
The market is entering sensitive boundary effects. That means: no matter how strong your front-runners are, once a boundary is triggered, the next day it’s very hard to chase for continuation. What is the boundary? You need to follow me.
3: Theory of the Opposite (FanZhe theory):
Trend and chained-board sentiment are in opposition. (Even now, as height is still being killed—if volume rebounds too.)
Export orders sentiment vs domestic substitution sentiment are in opposition (right now the main sentiment is in exports; the market is trying to perform a “substitution” trade).
Mainstream tech (chips industry, CPO, PCB,) vs off-bench tech (commercial aerospace, power, power equipment, robotics, innovative drugs, AI applications, large models, etc.) are in opposition.
Next week direction forecast:
① Don’t be so certain that incremental demand only goes to big tech. Today’s incremental 500 billion already is a signal of a full recovery. But the tape showed too many rotational theme trades, directly wiping out the fantasy of a full return of big tech. The “elimination line”—if the old-cycle tech should be strong but isn’t—has entered a staged elimination phase. Every rally is an opportunity to sell to you. The sub-sector with capacity becomes the first choice. This includes not only the old export-related line, but also other tech.
② What incremental capital likes is chained boards. Today, most of the rotated sectors were “one-wave” options. Commercial aerospace entered the high-open interval on Monday. But because the explosion is too concentrated at midday, there’s a problem of concentrated chips. It’s easy to be sold off in a concentrated way. Monday isn’t a continuation/chasing point—it’s only for observing the direction.
③ Earnings pre-announcements mostly show up in one-word form, and the next day the same “one-word hanging” becomes the norm. On one hand, it shows that active capital still uses earnings as the trigger to lure buyers. In reality, next week you should observe whether a non-earnings one-word appears. That could be the turning point. (Restructuring excluded.)
④ Whether the domestic chip series says goodbye to the main upswing next week depends on the走势 of commercial aerospace. Emotionally, active capital prefers commercial aerospace that can run in chained boards.
⑤ Hengshang Energy Conservation: the “task” of making money from chained-board effects has already been completed. Besides stocks at similar heights to it, there’s no more emotional value. We only watch whether it gets suspended so we can see the regulatory stance clearly. This stance is very important. Next week it will respond immediately.
If my recap is useful to you, just follow me, like, share, tip, and give me rewards. I’ve accurately predicted several major turning points—are you really not going to follow me?