Can’t understand it—won’t participate!

Since joining Taogubā, I’ve wanted to use my pen as a blade and stocks as a mirror—to record the rise and fall of qi and blood along the trading path and search for the logic beneath the pulse. I didn’t expect everyone’s kind support. Each P-exhortation is like a warm tonic that dispels the cold confusion of short-term guesswork; every bit of attention is like a guiding draw for channeling the pulse, firmly reinforcing the初心 of practicing a system.

Xiao You knows well that short-term trading is like Traditional Chinese Medicine differentiation: in the shifting landscape of gains and losses, you must observe the “lesions” and辨“yin and yang.” And the path to growth isn’t something you walk alone—the recognition from all of you is the most precious “medicine catalyst” in my replay journal.

Personal operations (pre-market plans and validation):
Many brothers know: when I don’t know what to do, Xiao You usually just doesn’t do it—eat, drink, sleep, and play!
Too lazy to write posts, no need to stare at the screen—so much easier.

I went fully flat on Friday.
On Friday, the limit-up reached only 2 boards. The market was merciless. As a sentiment-flow player, I really didn’t know what to do.
So I cleared even that small amount of positions I had on Friday!

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Xiao You’s Four Diagnoses on July 13
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1. Observe the overall trend: judge whether the market’s qi and blood are deficient or sufficient;

Today the market’s qi and blood are extremely weak. The index kept falling and pushed toward the 3,900-point checkpoint. Trading volume shrank sharply to 2.8 trillion, with a contraction of nearly 28k. Incremental funds from outside the market have been nowhere to be seen for a long time; with only existing funds in play, follow-through support is extremely thin. Up days: only 770 stocks; down days: as many as 4,400. 172 stocks hit the daily price limit down. The money-making effect is completely suppressed. The market shows panic-driven “indiscriminate capitulation.”

Sentiment has also fallen to an all-time low. Both at the call auction and after the open, the desire for capital to provide follow-on support is very low. Today there are only 18 stocks with first-limit-ups. The rate of advancing from 1 to 2 is just 8%. The lineup of consecutive limit-up boards is severely broken. Such an extremely low advancement rate and the large number of limit-down boards indicate that short-term funds have already formed a consensus of抢跑踩踏. The sentiment retreat is even more intense than expected—this is a period of systemic retreat.

2. Hear: strong-pulse and weak-pulse sectors; diagnosing the capital’s intent

Strong-pulse sectors: In the period of sentiment’s freeze point, capital’s intent to seek safety is obvious. Low-valuation blue chips such as banks and medical/health sectors are relatively stronger defensive sectors. Their main role is to stabilize the market and prop up the index—but this is more about protecting the market than actively going long.

Weak-pulse sectors: In the past, popular technology themes (such as semiconductors, consumer electronics, etc.) and small/mid-cap growth stocks saw concentrated profit-taking pressure release. Capital’s willingness to realize gains is strong. Themes like commercial space flight that performed actively last Friday directly gave back gains today. Sector rotation was too fast and lacked continuity. It’s like the baton of a relay was dropped—hot for a moment and then cold immediately.

In this kind of market, the dominance of quant models over the market is on full display—price moves are manipulated in a wholly abnormal way.

3. Ask: probing the confusion in my own heart
On Friday there were only 2 limit-up boards, and the market had no sentiment at all. As a sentiment-flow player, facing an extreme retreat environment where the advancement rate is below one in ten, there’s really no way to get started. Rather than struggle in the mud, it’s better to preserve capital. So on Friday I decisively cleared the already-not-much positions and went flat. In a systemic retreat, having no fantasies is the greatest responsibility to the account.

4. Cut: diagnose the pulse of operations

The market is currently in a “forced cashing-out” phase where sentiment collapses; capital efficiency is extremely low, and under the prisoner’s dilemma,抢跑踩踏 has become consensus.

Operation strategy:
Cash is king.
No new positions. No participation in any thematic “trial and error.” Wait patiently for confirmation signals that sentiment has repaired (such as the rebound in the consecutive-limit-up advancement rate, increased consecutive-limit-up heights, a sharp reduction in the number of limit-downs, etc.).
Even if a plunge on shrinking volume doesn’t require extreme panic, with no incremental funds entering the market, any rebound may just be a breathing pause within the downswing. Don’t let the mood be steered by a single day’s intraday action.
If later the market shows a volume expansion breakout and the consecutive-limit-up lineup is once again ordered in a healthy way, or you can try a small position for trial and feel the market’s pulse. Until then, keep your hands restrained and make it through this grinding cycle—that is the best move.

When the mind is steady, the market is quiet; when the heart is stable, profits last long.
Let capital become an extension of your will!

Wishing everyone’s qi and blood flow through smoothly, and your account shines for the long run!

Thanks to everyone for the likes! Recognizing others is also accumulating your own blessings;

Thanks for the generous tips!
For those who are willing to give to others, what you gain will surely come steadily and fill you to the brim!

Thanks for encouraging and cheering on!
For those who applaud others, the road ahead will certainly blossom step by step and grow more and more brilliant;

【There are risks in the market—invest carefully. The above is only my personal post-trade recap, and does not constitute any investment advice】.