Hexun Investment Advisor Zhu Yiming: Shrinking volume to fill the gap from yesterday, has the short-term decline in the market stopped?

By the close, all three major markets finished down, and it’s been a decline across more than 4,000 stocks. And today there was a clearly significant volume contraction. But we can see, at the level of the index trend, some friends are asking: is the market not good here? According to Hexun Investment Consulting analyst Zhu Yiming, at least for the Shanghai Composite Index in terms of high-dividend stocks, he is not bearish. You see, when the ChiNext and STAR Market indices drop like this—we’ve told everyone many times—this is normal. But you can see today, in the afternoon action of the Shanghai Composite Index, basically after it filled the upward gap from 3,902 points, it immediately switched to cutting to the next phase in the short term. At the intraday close, when it was at its highest, it was around 3,922; in a moment it rose about 0.5%. This actually shows that the main force isn’t saying it won’t take action; rather, it’s waiting for a suitable price and a suitable timing in this area.

So, I don’t think today’s volume-contracted decline is a bad thing. On the contrary, I can see—everyone can also feel it—that across the whole market, this selling pressure is those sell orders that retail investors want to get rid of. Through the trading action from yesterday into today, it has further reduced the positions they held; they’ve taken some de-risking, sold, cut losses, and so on. So going forward, especially after today’s close, the number of friends who are truly holding chips in the market and want to sell has actually not increased—it’s decreasing. Because those who needed to sell already sold during the consecutive streak of roughly nine days starting from last week’s Monday, when there were four negative days; basically, they’ve already sold. That means the subsequent rally will become very simple and easy. And we can also compare with nearby markets. In Korea and Japan, their closing levels basically had one down about 4 and the other down about 2.4; in general, our decline is around one time or more. That is to say, at this level, our A-share market is still relatively resilient in terms of downside.

And under the situation where it had just rebounded yesterday, even though today it fell, many stocks have not broken down, and there has not been large-scale downside with heavy-volume distribution structure.

I still believe that the probability of the index stabilizing and stopping the decline at its current level is extremely high. And right now, whatever you say, it’s within a low-level range—so everyone needs a little patience and confidence, and wait for the index to complete a base-building bottoming-out period. Then it will be okay. But now, many friends lack the most—this thing is exactly a lack of patience, a lack of confidence, and also a lack of time to wait. Because many friends see their losses on the positions getting bigger and bigger; even some friends are chasing after the rebound and selling in panic, cutting at the low and chasing at the high. That may mean they could lose money a second time, or even a third time. So from this perspective, I completely understand everyone’s mood right now. But the way to respond is also very simple: be patient and wait for it to move out of the bottom area.

（责任编辑：王刚 HF004）

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