12.4 Market View: The next 1-2 months will be volatile

Originally, I planned to short below 8.2 and gradually start bottom-fishing, but it went down to the lowest at 8.37 and then rebounded. Since it has been pulled up, I will consider shorting on rallies. The rebound here is relatively fast, but the maximum space is about 9.5, and there is significant pressure between 9.4 and 9.5. I will hold this short position here. As for those who say a slight rebound means the bull market has returned, I can only smile.

In fact, from a daily and weekly perspective, one can refer to the three similar waves of decline in the first half of 2021, early 2022, and early this year. Whenever there is a decline of this magnitude, there are usually significant underlying reasons. Various factors are pushing for such a strong decline, and the bulls have been severely hurt in the past two months. The position above 90,000 will not have institutions betting heavily in the short term, as many of them are already low on funds. Those who truly have money are waiting for positions around 70,000. Some say the grey industry’s exit has led to the recent drop in U, which may indicate that the selling pressure has temporarily subsided. However, from another perspective, the grey industry was also a force driving the rise before. Although they may have sold off significantly, they are unlikely to buy again in the short term. Therefore, at the 93,000 to 95,000 level, there won't be too strong of a buying force from various aspects. The strength of a major trend will not easily end. Historically, after every similar major decline, there tends to be a period of bottoming volatility. Here, it’s about shorting on the rise and bottom-fishing on the fall, which will maintain a weekly level of volatility. Once you understand this characteristic, you can patiently wait for the levels you want and manage your positions accordingly.