Hello everyone, babies, good afternoon. [Taoqiu Ba]

Today is Monday. After a weekend of various people pumping stocks and all kinds of good news and bad news, today is pretty brutal for everyone. Bad news is understandable, but the good news was what really left people dumbfounded. Taking examples of stocks whose performance has been revised/reviewed dozens of times: the sell-off is being called “good news.” The hardest-pumped during the weekend were semiconductors and commercial aerospace. The result today is that both became villains of the whole session—basically dragging down the entire market. For the specific intraday market details and the outlook, please refer to what comes next.

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Please remember to like and follow the thread with comments, wishing everyone a smooth ride all the way, and a happy life.

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I. Market Overview

1. Indexes and Expectations

Today, the broad market index basically broke below the key moving averages, including the 200-day line. Technically, it looks extremely ugly. After last Thursday’s big bullish candle, Friday saw a high-volume bearish engulfing pattern. Although it didn’t fully cut through, Friday was still a high-volume sell-off of more than 500 billion—its force is obvious. Technically, that sets up selling pressure for today. Also, based on the usual Monday routine, people don’t “buy the pumped stocks,” and they don’t take the “Friday” moves—plus weak conditions from overseas. That creates a panic situation. Overseas is only an external factor and can’t be decisive for the trend. The essence is still that pressure is heavy and rallies can’t be pulled up. After some performance-forecast announcements that came early, the subsequent price action had already deviated from the normal track. Today directly triggered quantitative “sell/fear” panic and accelerated things.

During the session they propped things up with banks, and the oil-and-gas sector had weekend messages with conflict, resulting in red. Throughout the day, more than 4,680 stocks closed green, and exactly about 800 closed red. The key is that there were too many stocks hitting the limit down—up to more than 170—and many of them are top “big brother” stocks with good performance. The damage to the tape is just massive. Since it’s moved like this, a small rebound may come in the short term. But those who picked up on Friday, or those who went to scoop early this morning, are potential overhead pressure. Therefore, the short-term downside probe may not be finished yet. When trading, everyone should watch longer and not rush to chase in the morning.**

2. Core Thematic Performance

(1) Commercial Aerospace

The most aggressively promoted over the weekend was commercial aerospace. The small tables were flying everywhere—everything being dug up about participation in launches, recovery, and whatnot—but from the opening auction, you basically already know there aren’t expectations. First, Friday saw a failed breakout; most were heading toward the floor. The only exception was a one-word limit-up—except for one JD Feng topping it. In the 20cm segment, Shaanxi, Donghua, and others didn’t follow at all. Another key judgment point: before commercial aerospace, the strongest was Space Development (航天发展) with the highest recognizability. The result at the opening auction was zero premium. With these signals stacked, they basically triggered the quantitative “core button” selling signal. If you rushed in on Friday and don’t move out at the opening auction, then you can only compete with the speed of the quant. The end result: the 3 ETFs in the theme all hit limit down. So—might as well摆烂 (give up). In the noon session, the theme pulled up with China Satellite (中国卫星). As soon as it tried to cap and surge, it exploded. Near the close, a few isolated names managed to scramble back up. With it playing out like this, don’t think about short-term theme行情. With the overall market weak, you may see some single names move in a tight group, but if you chase, the quants will show you what it means by “endless supply getting dumped.”

Theme core to watch: China Satellite (中国卫星), Jiufeng Energy (九丰能源), etc.

(2) Semiconductors—Silicon-based

This has been where capital or activity has been highest recently. There were weekend positives; many names, such as Xiangnong Chip (香浓芯创), even released earnings—yet it had no effect. When the market opened, everything just gapped down. In roughly 20 minutes, it immediately ran to 20cm limit-down. The whole theme then got dragged down with it. For the biggest leaders, including the likes of SMIC (中芯国际), they were still relatively tough. During the session, they even tried a pulse to lead, but no volume came out. Then others started dumping in the opposite direction, and the “big brother” simply stopped caring. In the short run, names like Yangtze Electric (长电科技) and Huatian Technology (华天科技) also wanted to repair early, but midway along, Tongfu Microelectronics (通富微电) swooped in to pick the “revolutionary fruit,” leading to a revival of internal competition. Other funds weren’t going to spoil them—they smashed first and then spoke. Even more, names like Ziguang Innovation (兆易创新) had hundreds of billions in value and saw consecutive limit-down days. So you don’t need to look at the theme anymore—just wait for the remaining few with independent recognizability that manage to form a tight group. The semiconductor sector index suffered a two-day decline, but some key levels haven’t broken yet—though it’s only a matter of time. The laggards like fiber optics and PCBs have already collectively broken down.

Other themes are nothing worth saying. The two places where capital is most concentrated didn’t get any chance; the rest can basically only lie low.

Theme core: waiting for further supplementation. $Hengshang Energy Conservation (sh603137)$

3. Market Sentiment

When the market is weak, there is always money looking for some “banker-style” stocks. Recently, the only one that can be called a “tight emotional group” is Hengshang Energy Conservation (恒尚节能) at the high end—because the other three-board stocks (three-level breakout boards) are already long gone, so how can you talk about a tight group. But even this “one that can print 10 days of 9 boards” isn’t that impressive—if the market doesn’t cooperate, it won’t work. Second, in essence, it’s just one-word opening auction arbitrage—a “lottery” you touch at the open. But here’s what to pay attention to: if the market stays continuously weak, will this area show performance? You need to move while watching. Right now, it still has a long road ahead.

Sentiment core names: no sentiment core names

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II. Trading Ideas

Everything has two sides. When the broad market is weak, of course the overall environment is hard to trade. But correspondingly, it makes “tight core” and “sentiment core” names clearer, easier to focus on. Therefore, here, trading opportunities should be about finding attention opportunities for stocks of this type. So today, those that go against the trend and don’t fall as much, those with obvious follow-through, or those that were clearly mistreated/misstakenly sold off—these could be potential trading opportunities. But note: don’t participate in抢筹 (rushing for shares), to avoid being sold out from the other side. The right approach is to be a bit “sneaky” around moving averages, looking for suitable moments to pay attention.

That’s it—let’s chat in the comments later.

SMIC-2.10%

GIGADEVICE6.59%

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