A谷 once again staged a roller coaster, ultimately narrowly holding at 3900! The shrinking volume hanging man line hides a signal for a trend change, a sharp drop is the time to take action!
In the early session, there was a sharp drop followed by a rise in the afternoon, the script of first suppressing and then raising was played out again, which is very frustrating for the mindset; those retail investors without a bit of determination must have panicked! The transaction volume was 1.79 trillion, which shrank by another 125.4 billion compared to Tuesday, shrinking for two consecutive days, and it also formed a small 'hanging man line', this signal is very clear— the short-term trend change window has arrived! There are 3 key points:
1. Early session ice point: Around 3876 points, over 3800 stocks fell, and the market sentiment dropped to rock bottom; it directly smashed the mood down to freezing point. At this time, whoever panics loses! Brother Wen previously emphasized repeatedly that in a volatile market, a sharp drop is an opportunity, do not chase after rises.
2. Afternoon reversal: Real estate surged unexpectedly, quantitative trading dominated the short-term market; Vanke's small article announced a mortgage subsidy policy, quantitative funds do not care about the truth of the news, they directly acted to lift the market, Vanke withstood the selling pressure and took the lead in charging forward, the real estate chain (real estate, equal rights in rental and sale, new urbanization) surged across the board, instantly revitalizing market sentiment. This shows that there is still a need for some active sectors to boost market sentiment, and it is not a bearish market.
3. Sector differentiation: Consumption + cyclical stocks resist declines, retail, duty-free shops, liquor, and other major consumption sectors performed strongly throughout the day, the November CPI announced in the morning was +0.7%, and there was also a positive inflation data in October, bringing a wave of consumption market. In addition, non-ferrous metals, gold, and other cyclical stocks also showed strong resistance, mainly due to expectations of interest rate cuts, and it is necessary to pay attention to the realization of positive news.
How will the market perform next?
The market is facing a directional choice, watching the competition for the 20/30-day moving averages, it is highly likely to give a clear direction, whether to stand above the moving averages starting a volatile upward trend, or to break down and revisit the bottom again, it depends on the strength performance after the opening. Overall, before the Federal Reserve's interest rate decision, funds are likely to remain cautious.
Strategy: Prioritize defense in the traditional off-season at the end of the year, do not touch sharp drops if you are not a skilled trader. From November to mid to late December is traditionally a slow season, and from mid-December to the end of the month, it is still mainly defensive, do not easily increase positions, preserving this year's victory is the most important.
Short-term opportunities only arise during sharp drops! Today's sharp drop in the early session, those skilled traders with some bullets can take a small position to bet on a rebound, but this market is dominated by quantitative trading, the rhythm is particularly difficult to control; if you do not have bullets or are not a short-term expert, just honestly wait for the opportunity at the end of the month, do not mess around;
Focus on the Federal Reserve's statement! If there is an unexpected positive outcome after the interest rate decision (such as expanding the balance sheet), you can appropriately increase positions in low-quality targets; otherwise, continue to lay flat and defend.
Lastly, emphasize again: the shrinking volume hanging man line is a warning for trend change, tomorrow's Federal Reserve interest rate decision is a key node, do not be aggressive in the year-end market, sharp drops are the real opportunity, and for non-experts, patience is key until the end of the month!
