[Red Envelope] July 13 recap. In the morning, the plan was to hold the medical sector as a defense and hedge drawdowns; after a volume-shrinking plunge that released panic, here’s the breakdown of tomorrow’s trading plan!

First like, then watch—daily income exceeds ten thousand. Keep it up, and give rewards—what a brilliant run all the way! If you think the recap content helped you, please like + follow; before market open every day, I’ll update my pre-market thoughts. If you’re confused about trading, leave it in the comments and I’ll answer one by one.[Taoqiu ba]

First, let’s talk about account actions: all of the following are in a simulation account

Buy:

Simrun Pharmaceutical Bought on a dip for a negative 2% near the low. Floating profit is up 9+. Earlier in the morning, I said that if tech isn’t working, then shift attention to pharmaceutical dip-buys—this is also doing risk allocation. L-cube Pharmaceutical’s open was a straightaway limit-up with consecutive boards; the third board also reflected the sector’s attitude. So in the pharma space, dip-buys are indeed something you can gamble on.

Jinzhou Pharmaceutical Around 4% on the way in. Floating profit is less than 4%. The reason is the same as above. I won’t hold two tickers in the same sector for the most part. The key is that my Simrun position was only at 2 layers, and I wanted to increase pharma allocation to 4 layers. So in the afternoon, although pharma didn’t get dragged down by the broader market rhythm and kept recycling, I reopened the chance and bought Jinzhou Pharmaceutical.

Tsinghua Unisplendour Bought at less than 1% at the open, floating loss of 1%. First judge from the opening auction: at the start of the auction, the most bids with one-word limit-ups were commercial aerospace; second was helium fermentation specialty gases. After 9:20, most one-word bids that were pushed up for commercial aerospace were then withdrawn—leaving only one “recognition” name, Gui Sheng. That is clearly an expectation of quantitative兑现 (realization). Last Friday, I said commercial aerospace is something you just watch—don’t go in to take the bag. Even earlier in the morning, I said the same. Next, helium and specialty gas also matched expectations, but they opened too high, with no entry point. Then later, the broader market came down, and the weekend ban on exports was also realized.

After the auction ended, for domestic computing power, tickers like Inspur and Tsinghua Unisplendour opened strongly. That indicates funds wanted to take advantage of the divergence to absorb incoming capital. Inspur’s performance showed domestic computing power is also entering the realization phase. The current position is still not high—so there’s no problem betting on Tsinghua Unisplendour at the open because it has higher recognition, and it also falls into “group-purchase quality.” The late-day抢筹 in Tsinghua Unisplendour is also a bet that tomorrow’s domestic repair will happen. After all, if the tech line isn’t good, you need a line to lead the index. Tomorrow, if the repair is not up to expectation, stop-loss at the 5-day line is enough.

Holdings:

Binglun Environment This is what I tracked after opening last Friday. Floating loss is 15. Today it truly gave some dignity on the spike, but I didn’t exit. Based on experience, you still need to hold a bit more. If you hold all the way to a limit-down, then you might as well not look at it. Today the broader market is just too bad—recently it’s been too tight with those Korean/棒子 (market). Price-wide killing and mistaken killing happening together is scarier than a bear market, with over a hundred limit-downs. Today’s “holding” is only to see whether tomorrow can proactively repair. Whether tomorrow is mistaken selling or active distribution—can be known from tomorrow’s opening auction. Logically, Binglun is fine.

China Great Wall and Shenzhen Huachong—I won’t go into details next; I’ll keep holding. Great Wall is up 4+, Huachong is down 2+.

Morning recap: today I wrote the sector direction in the recap section

1: The tech line today is a full collapse. Storage, PCB, optical communications, semiconductors, AI hardware—those directions I said in last Friday’s recap that started兑现 yesterday afternoon, besides semiconductors that made a token opening repair, everything else continued to be sold off. Mega storage leader Zhaoyi Innovation even directly hit limit-down. Main funds flowed out of the electronic sector for the day by over 35 billion—this “escape” strength is just terrifying.

2: Commercial aerospace is the biggest trap today. Last Friday, the Changzheng-11 Y completed recovery successfully, and the sector saw batch limit-ups. Over the weekend, everyone was shouting that commercial aerospace would take off today. Then what happened? The whole day was weak, a wave of limit-downs: Beidou Tong hit limit-down, Changying Tong fell over 19% (this one had previously surged 5x and is already cut in half), and nearly 50 stocks fell more than 9%. A classic case: good news兑现 and then “seen once, gone for good.” Those who chased in last Friday were directly crushed today. Even in the auction, I reminded the fans that commercial aerospace was not right.

3: The traditional Chinese medicine (TCM) sector was relatively strong today. The State Council approved the 《Traditional Chinese Medicine Revitalization Development “15th-Five-Year” Plan》—the policy catalyst is strong enough. Longshen Rongfa hit a 20cm limit-up, and Tianmu Pharmaceutical and Jiuzi Tang also hit limit-up. From recent observations, whenever the broader market plunges, pharma is always a safe haven—and this time is no exception. But as for this TCM direction, to put it bluntly: it’s because the broader market isn’t good that you can “exist” here. Fundamentally, funds have nowhere else to go, so they hide in TCM—not that they truly believe TCM can break out into an independent trend. However, in the short term, if the broader market keeps staying weak for the next few days, TCM may still see 1 to 2 more days of premium.

4: Oil & gas and gas utilities also went against the trend. Shifa Gas and Jiu Feng Energy both hit one-word limit-up; Shandong Molong and Tongyuan Petroleum rose more than 7%. Geopolitical conflict pushing up oil prices is a direct catalyst. Also, the Ministry of Commerce restricts high-purity helium exports, so the gas direction picked up some of the specialty gas theme light. But with message-driven one-word boards like this, tomorrow will likely diverge. First look at how strong it is after the divergence ends, then consider entering.

5: Domestic computing power—no need to say more; the buy logic is already in the section about Tsinghua Unisplendour.

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Let’s look at the market

Today’s tape… it’s really… it’s hard to look at. I want to curse a bit.

Low open, then falling; throughout the day there was no decent rebound. The Shanghai Index dropped 2.06%, breaking below 4,000 points completely. The Shenzhen Component fell 3.48%, the ChiNext fell 3.1%, and the Nasdaq-style Beizhuang 50 fell the worst, down 6.78%. Across the whole market, fewer than 800 stocks were up, 4,683 were down; 27 limit-ups and 172 limit-downs. That limit-up/limit-down ratio basically explains everything—it’s a one-way slaughter.

Trading value is 2.83 trillion, down more than 570 billion compared to last Friday. Falling on shrinking volume: it’s not capital escaping with volume, but it’s also not a good signal—meaning the bulls had zero intention to resist. The shorts don’t need to spend many shares to smash the index down.

Today’s way of falling: from the outside and news backdrop

1: The Middle East blew up. Iran announced the Strait of Hormuz will be closed indefinitely. The US military struck Iran for the fourth time within a week. International oil prices jumped to above $74. Asia-Pacific markets broke down with it: South Korea’s Composite Index fell as much as 6% intraday, and SK hynix fell over 10%. A-shares were dragged down at the open.

2: Changxin Technology started pricing today—a massive IPO of 29.5 billion, with the subscription date on July 16. Funds on the exchange aren’t exactly plentiful to begin with; they need to allocate some cash to IPO subscriptions, so high-priced tech stocks become “cash-out machines.”

3: Tech stocks were already starting to realize gains on Friday. On the day the STAR 50 fell 5.53%, and today the sell-off trend continued. Storage, PCB, optical communications, commercial aerospace that had surged earlier—all saw a wave of limit-downs today. Zhaoyi Innovation, Demingli, and three brothers in storage all hit limit-down together. In the optical fiber/optical communications direction, Hengtong Optic Electric and Fiberhome hit limit-down. Han’s Laser (PCB direction) hit limit-down. Huanrui Century and Foshi Holdings (media direction) hit one-word limit-down. Last Friday they were at limit-up; today they were pressed to one-word limit-down.

As for the trend:

1: Today’s drop is the continuation and acceleration of last Friday’s adjustment. Last Friday, the STAR 50 fell 5.53%. Back then I said if they continue to sell hard next week, it would be normal digestion. But today’s way of selling is truly beyond expectations. The core reason is that overseas geopolitical conflict plus IPO capital draw created pressure, directly smashing the tech line that already needed to adjust.

2: Trading volume shrank to 2.83 trillion, down 28.3k from last Friday. A volume-shrinking crash means the bulls had absolutely no resistance, but it also means panic selling is being released. Usually after a sharp sell-off on shrinking volume, if tomorrow can stabilize with increased volume, that’s a signal for a short-term bottom. But if it continues with shrinking volume and drifting lower on red-to-green weakness, then it hasn’t hit the bottom yet.

3: 3,900 points is a key level. Today closed at 3,913—only 13 points away. If tomorrow directly breaks below 3,900 and there isn’t a decent rebound, you might see 3,850–3,820 next. On the other hand, if 3,900 can be held and volume brings it back up, then it’s a short-term bargain-hunting opportunity.

4: The style has fully switched. Last week it was still tech as the main line, one to dominate. Today funds fully shifted to defense—TCM, banks, oil & gas, coal—everything with low valuations and high dividends. This style switch happens every time there’s a market adjustment in A-shares history. The question is whether it can sustain. If geopolitical conflict continues escalating, defensive sectors will keep getting strong. If geopolitics eases, funds may flow back to tech again.

5: July 15 is the deadline for mandatory disclosure of earnings forecasts. It’s only two days away. That means more “earnings bombs” will be released in these two days. High-priced tech stocks with earnings missing expectations may face a “double kill” of valuation and earnings. This is the biggest short-term uncertainty.

As for consecutive limit-ups (连扳):

Space board: Hengshang Energy Saving and Heat Efficiency—10 days, 9 boards. This one is truly pure sentiment. M&A restructuring concept, and it doesn’t connect to any current main theme. It’s just funds rallying around a ticker in an extremely weak environment. The profit-taking piles up with 9 boards. The company repeatedly issued unusual-movement announcements. Honestly, the rise and fall of this stock no longer has anything to do with the market—it’s just a sentiment anchor.

3 boards: L-cube Pharmaceutical — pharma/TCM sector. Today it’s the safe-haven direction; it benefits along with it. If tomorrow pharma stays strong, it may keep running. But once pharma starts to diverge, this consecutive limit-up also ends.

3 boards: Yalian Machinery — performance increase expected; independent logic linked to interim report earnings, with low connection to the broader market.

3 boards: Guisheng Shares — offshore recovery. Today Juili Suoju hit limit-down, showing the sector is already starting to split. Its sustainability is a big question mark.

2 boards: Walton Technology, Harbin Pharmaceutical Group, China Shipbuilding Heavy Industry, Jiu Feng Energy, Huajian Group, Lianhuan Pharmaceutical—mostly defensive and news-driven names with no real main-line attributes.

Tomorrow to watch + trading ideas

Focus directions:

1: Tech main-line dip-buy opportunities: If in the next two days the sell-off continues and then volume stabilizes, semiconductors equipment and advanced packaging directions that have earnings support can be considered for staggered dip-buying. The industrial logic hasn’t changed; the drop is actually the opportunity.

2: Short-term premium for TCM and innovative drugs: If the market remains weak, TCM might still have 1–2 more days of performance, but don’t chase.

Avoid:

High-level tech stocks that surged earlier—on rebounds, that’s a trimming window. Don’t fantasize about a V-shaped reversal. For directions like commercial aerospace where the good news has already been realized, in the short term there won’t be a second wave of pure-theme small caps without earnings support. The July 15 earnings forecast deadline may continue to detonate.

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Technical post goes straight to you

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Only trade within your cognition model

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