7.12 recap, high volatility

On Friday, the combined trading volume of both markets hit 3.38 trillion, with a big surge of nearly 33.8k. On Thursday, the STAR Market 50 jumped more than 8%. On Friday, it immediately dropped back 6%. Over the weekend, the entire internet was all about complaining about quant trading. And yes—quant trading last year was already over 800 billion, and this year it directly pushed to 1.8 trillion. Even stocks with a few hundred billion market cap could be given a 15, 16% intraday amplitude. Truly eye-opening. [Taoqiu]

On Thursday, one strong V-shaped bullish candlestick pulled everything up. There had been too much discussion about it earlier. Normally, on Friday’s early session, many stocks would spike and then get sold off a bit—that’s fine. But the expectation was that after the dump, funds would still go to DIXI to take over and pull it up. Instead, on Friday from early session sell-off all the way to the close, the whole day printed a single engulfing-type candlestick: an open-to-close bare-foot bearish candle that mirrored back.

Looking back at the board: On Friday’s early session, the strongest still was domestic technology. Hu Tian Technology hit the one-word limit-up with a huge order; it’s the emotional core of the domestic industrial chain. Funds still carried out arbitrage based on its strength. Semiconductor equipment, materials, and others all surged at the open. Also, Huawei NPO, which had been fermenting since Thursday night, was strong in the morning in this area too. In addition, the rumor that runbin was delayed was debunked; at the open, funds still attacked upstream PCB materials, but after the spike, everything was cashed out.

At noon, news came that the recovery of Changzheng 10 Yi succeeded. Quant trading at the open directly pulled a dozen-plus commercial aerospace stocks to their daily limit-ups. Back-row names also surged hard in a straight line—20cm/30cm stocks included. No matter whether the logic was correct or just蹭 the concept, it was “the chickens and dogs all升天.” By the end of the day, most of the back-row arbitrage plays were also cashed out heavily. Over the weekend, I seriously researched this recovery—it really counts as a major positive. First, the technical route differs from SpaceX. Second, after recovery, the cost per kilogram dropped by about 40%. Finally, after the cost dropped, the number of satellites to launch was increased significantly within the year. The 2026 market size, originally expected to be 2.6 trillion, was raised to 3.5 trillion. For 2027, it was raised from 18k to 26k. After that, stocks that truly have logic will have opportunities, but those that just chase the concept should be careful.

In commercial aerospace: On Friday, quant trading was basically spread across the board. Tomorrow, you need to first observe the front-row stocks’ order book—specifically Jili Suoju and Jiu Feng Energy (Changzheng 10 used Jiu Feng Energy’s liquid fuel; over the weekend, the helium concept was also fermenting). For the commercial aerospace direction, tomorrow morning isn’t suitable for chasing. It’s better to observe for 1 or 2 days first, and treat it as an important rotation related to a technology divergence.

The aggressive pull in commercial aerospace in the afternoon further accelerated the decline in technology. Personally, though, I think many stocks were definitely mistimed due to emotion and the index being wrong. Over the weekend, two important pieces of information in the technology sector: one is that Huang Renxun attended a closed-door discussion with Morgan Stanley, and again debunked the rumor that rubin was delayed. Still, the capital market remains worried about Nvidia’s performance. Another is the debunking from China’s旭创; the news has been interpreted as relatively positive. Tomorrow, this direction is expected to see a repair.

For the PCB direction: after adjusting for N straight days, with the rubin debunking, it’s expected that funds still need to provide some repair. On Friday’s early session, there was already some repair—for example, Guojiancai of the electronics board surged by more than ten points, and Bao Ding Copper Foil once compressed volume and hit a second consecutive limit-up. But in the afternoon, as technology divergences intensified, everything plunged. If tomorrow this direction can continue to diverge, it may be a decent opportunity.

For Huawei Ascend: on Friday’s post-market, Ziguang’s performance beat expectations; earlier, Inspur also did the same. These performances can verify Huawei Ascend’s large-scale volume expansion. After what was cashed out on Friday, next week the focus is to watch for opportunities in this direction.

In short, when facing a high-frequency, high-volatility market environment driven by quant trading, there are only two strategies: 1) Either firmly believe technology is the main theme, hold onto it long/medium-term and avoid quant-driven chasing and selling panic; 2) Or follow the high-throw DIXI to do T (turnover).

The above views are for personal record only and are for reference; they do not constitute any investment advice.

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