7.13 recap—did it fall all the way through?

Question

In the two markets, trading volume hit 2.8 trillion, shrinking sharply to nearly 600 billion. The number of stocks hitting the limit-up/limit-down was 27:172, and the number of advancing/declining stocks was 777:4377. There are 1,246 stocks with a decline of more than 7%. How should we look at it? Today is definitely a solid “ice point.” The SSE Composite Index has filled the gap from the April 7th U.S.-Iran conflict. In the high-end technology sector, many stocks have basically been cut in half from their highs. The short forces have effectively vented to the extreme today. There’s likely to be a rebound in the next day or two, but because there are simply too many trapped positions, the following price action is likely like an old lady crossing the street—one step, one glance back—slowly digesting and reorganizing the chips. [Taojubba]
As for sectors, commercial aerospace saw a limit-up wave at Friday noon on opening, and today it turned into a limit-down wave. This is also what quantitative trading was criticized the most for today. Commercial aerospace has turned out like this—hopefully the authorities will pay attention to the issue of quant “cutting greens” (selling to retail) with these strategies. At the 4,000-point toll station, if quant is still allowed to hold a “submachine gun” and confront retail with their brooms, people’s hearts will scatter, and it’ll be even harder to lead the team later. This kind of harvesting method clearly runs counter to the patience-oriented capital that the country advocates, and there’s also the major shareholder selling off—these two have been the longstanding reasons behind the A-share market.

In the technology direction, China’s domestic manufacturing lines still provided a big early surge and repair. Tian Tech (华天科技) that had flashed boards at the end of Friday was able to open higher and repair today, boosting advanced packaging. In the advanced process direction, Semiconductor Manufacturing International Corporation (中芯国际) and HSMC (华虹公司) also moved stronger. With Huawei Ascend (昇腾) as well, the early session was driven by a back-and-forth rally and limit-up in Star Network (星网锐捷), which led Huafeng (华丰), Star Network (锐捷网络), Tsinghua Unisplendour (紫光股份), Founder & Partners (共进), and Towevision (拓维) to all surge strongly. Although the index dragged them down on the screen, intraday they still counted as extremely resilient, and there was also bargain-hunting by funds toward the close.

On the overseas chain side, optical modules are still relatively much stronger than PCB, MLCC, and optical fiber. One very important reason for this big pullback in tech stocks is that funds are worried that various capacity expansions will lead to oversupply—repeating the earlier mistakes in the new energy sector. The deepest adjustment has been in the upstream materials of PCB, MLCC, and optical fiber, where the expansion threshold is relatively lower, so they have adjusted the most. Compared with that, CPO, NPO, and EML have higher expansion thresholds, so they have adjusted the least, and they were also the first to rebound.

At present, the market is chaos everywhere—any small gust can trigger a sell-off. After having adjusted so much, it also means a lot of risk has been released. Going further down, the less determined chips would have already cut. If someone is still holding firm, honestly at this point they can’t really be cut. On the way down, the chips will actually be more stable. But once there is even a slight rebound, many trapped positions will choose to do T trades and smash the market. Then toward the close they’ll buy back again. Therefore, for a relatively long period going forward, it may continue with this kind of style—until the market’s volume gradually stabilizes, and the chips are reorganized more cleanly. Then, only after the “seven sisters” reports from the U.S. are out—when the market has guidance—will it slowly start to rebound in earnest.

**The above views are for personal records only and are for reference purposes only. They do not constitute any investment advice. **

7.13 recap—did it fall all the way through?

Trending Topics

PreIPOsSeason2OpenAISubscription

GateSpotGrowthRankedFirstGlobally

TrumpCallsForClarityActPassage

MillionDepositCashback

WarshTestimonyMeetsCPI

Pinned