Hexun Investment Advisor Feng Ke: Is the Bull Market Defense Battle Starting? Pay Attention to This Level Tomorrow!

Today, the market rebounded sharply then fell back, with a significant decline on lower volume throughout the day. Behind this was actually the main force’s complete conspiracy. How will the market move tomorrow? Where are the new opportunities? Feng Ke, a Huoxun investment advisor, analyzed that today’s volume decline revealed three truths:

First, institutions are starting to exit. Yesterday, the total redemption scale of wealth management funds reached the 96th percentile in history, meaning yesterday was among the top 5% of days with the largest redemptions in the history of wealth management sub-funds. Therefore, institutions are not actively participating, and the volume mainly shows a shrinking structure.

Second, the variable ranking on the Dragon and Tiger List shows that today, the net quantitative buy-in ratio exceeded 60%. Quantitative trading has a natural contradiction with retail and speculative funds. Retail traders prefer high momentum with a main theme, but quantitative strategies do not require high momentum—they just need volatility. They buy low and sell high daily to harvest chips. Currently, with institutions and speculative funds temporarily out of the market, tomorrow’s trend will be extremely difficult.

Third, the market’s volume contraction hasn’t reached the freezing point yet. Today, the market shrank again, with an increase in the morning rally and volume reduction, followed by a sharp decline in the afternoon with increased volume. This indicates that outside funds are watching, while retail investors panic-sell during the decline. Since the decline in the afternoon, volume shrank from 230 billion to 110 billion, showing retail panic selling at least six times more than normal. The 2 trillion yuan trading volume is a dividing line for market sentiment freezing. If the market shrinks by more than 200 billion tomorrow, the opportunity for positive addition will arise. As the saying goes, “When others are fearful, I am greedy.” So, what will the market’s script look like tomorrow? Currently, the market has reached a critical moment. The next support level is around 4,034 points, the double top from last year, which is also the lower boundary of the trendline since the 2024 recovery. If it falls below and cannot recover tomorrow, 4,000 points will be the bottom line. Since March 2022, the market has not experienced five consecutive declines, so tomorrow’s stability depends on whether it breaks or not.

(Chief Editor: Wang Gang HF004)

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