[Red packet] July 14, early session: “When the road runs out and the water ends, sit and watch the clouds rise.”

[TaoGuba]

First, take a look at yesterday’s early session. A few sectors were already discussed clearly.

On the 14th early session: Monday saw a severe volume contraction, and quant trading concentrated on profit-taking/realization—once again, the market was essentially a broad kill.

In semiconductors: among Friday’s weighted names, SMIC, Cambricon, Hygon (InnoLight?), hardware leader CMX (?), and JIDENG (?)—all expressed something early on. But the “alive” ones from Friday, such as Huatian and Yonyou? (有研), opened lower on Monday as well. At the open, Huatian and Changdian both surged for repair. But when you looked back, there was nothing behind them—on the downside boards lay countless earlier tech-sector names with recognizable traits.

This is no longer just a sentiment issue. With overall volume contraction and insufficient liquidity, added on top of quant profit-taking. In-trade it turned from longs to shorts repeatedly; short added to short, with zero resistance.

Now let’s talk sectors: Semiconductors: the early-session rush to “repair” was too excessive and too hasty. By Friday’s late session, there were already differences. On Monday, those differences should continue. After Changdian and Huatian opened slightly lower, they quickly rushed to repair. Even though the key names—Cambricon, Hygon, and SMIC—signaled, the middle-and-back positions in the overall sector couldn’t keep up. Storage, equipment, and target materials all hit the daily limit boards. Companies that held up on Friday—Yonyou? (有研), and Deep Technology—are making up the losses today.

So look at Tuesday’s “core leadership” follow-through: can it continue to hold up and lead? Can Changdian and Huatian do a bullish engulfing/cover (反包)? If even the “nuclear” pioneers can’t be repaired here, then be cautious.

AI hardware: Jiding XuChuang (中际旭创) signaled early. Xinyisheng (新易盛) and Dongshan once were also dragged red, but within the optical-communications sector, the middle-and-back aren’t following either. Other oversold branches—PCB, optical fiber, MLCC—opened and immediately “jumped into the river”; the weaker ones remained weak and it’s hard for repair to sustain. Tonight, there’s a batch of disclosures of earnings forecast/press releases. Tomorrow will continue to anchor on the feedback from Jiding XuChuang: can it keep holding up and continue to lead? Can the oversold branches stop falling? Can the CPO optical-communications sector be lifted?

Aerospace: an “all-one-word” limit-up wasn’t enough early on. What can be seen here is the logic stocks within the sectors mentioned in the early-session list—China Spaces? (两个中国卫), satellites, and Weitong (卫通). And Hailanxin (海兰信) briefly turned red at one point during the session. Here, what gets killed are the sentiment stocks that were batch-rallied by quant trading on Friday. What you can watch is only logic stocks and “capacity” (容量) core leaders. As for other trend-following sentiment tickets—quant will smash you in minutes.

Pharmaceuticals: currently, the 321-tier ladder has already assembled the consecutive limit-ups. What the sector lacks is a signal from the “core leader,” for example, WuXi AppTec (药明). If the core leader doesn’t move, treat it as a避险 (safe-haven) situation.

Computing power: keep the original plan. For the rotation, watch sector leaders and “capacity” such as Inspur and Tsinghua Unigroup (紫光) by their走势. On the sentiment side, look at Xingwang (星网). Late-session bargain buying/piling up—watch for these feedbacks tomorrow.

Summary: after divergence, the divergence continues. See who can proactively repair when divergence is at its exhaustion. If you can’t see clear certainty signals, then stay steady—small-position, stay in cash—and wait for a right-side signal before entering.

If you can’t make money during the main up phases in April, May, and June, then this July行情 has nothing to do with you. It’s harsh, but I hope you can take it in.

In the post from the beginning of the month, there are screenshots: the characteristics of the main decline cycle—summarize it, don’t treat it lightly. If your “rank/tier” isn’t enough, then be cautious and wait for the right-side timing before entering.