Afternoon raids shouldn't be overwhelming; take it easy with the year-end market

The sudden surge in the afternoon was so strong that it was unpredictable, but having the courage to enter the market against the trend during yesterday's sharp decline is the pinnacle of short-term trading. I can't predict a big rise this afternoon, but I dared to enter yesterday during the drop. Of course, my contrarian thinking is not just based on guts, but rather on relatively perfect position management. I repeatedly emphasize that in a year, there are only a few real drops; if you act almost every time the market drops, even if you have to endure the risks of short-term selling, you will definitely outperform most people. If you have a cost advantage, what is there to fear? From the patterns of the past two months, there have only been significant drops on November 21 and yesterday. Those who bought on November 21 definitely made a profit, and if you dared to buy during yesterday's drop, how likely is it that you would lose money today? If you are afraid to enter when the market drops and then chase after it when it rises, then making money will depend entirely on luck.

Although today’s surge was strong, I don't have high hopes for such a rapid increase. I don't believe that a sharp rise is akin to not fearing a sharp drop; both have significant emotional and speculative elements. So, I sold the positions I bought yesterday towards the end of the trading session. Some people may worry about missing out if the market suddenly rises tomorrow, but I never worry about these things. If it rises, I will only earn less; it just means waiting a bit longer. How many stocks in the A-shares can make you miss out? Missing out is just a matter of time and doesn't incur any real loss. Holding cash means I have the initiative. The year-end market is not likely to stir up big waves. I repeatedly emphasize that opportunities in the current market are emerging; if you panic when it drops and feel excited when it rises, then it's mostly not suitable for short-term trading. Of course, if the market shows a unilateral upward trend, chasing the rise won't be a big problem, but such opportunities are relatively rare.

In the afternoon, brokerages suddenly “slammed the table” and started working, pulling up insurance, banks, and other large stocks, and the indexes rose steadily. The volume also increased during this wave of rise, looking quite lively.

But we need to be clear about who is supporting this excitement. It’s the large-cap stocks! The white line (representing large-cap stocks) is high up, while the yellow line (representing small and medium-cap stocks) is being suppressed heavily, consistently lagging behind. To be honest, this sudden “sneak attack” surge in the afternoon is really hard to predict in advance. I've been hearing people mumble about “Wave C decline” and “Wave 4 selling,” making it sound like there’s an endless abyss below. If technical analysis were really that useful, wouldn’t the market be full of stock gods? Even if there is still room for a decline later, after a significant short-term drop, it has to take a breather and rebound a bit; it can't just drop to the bottom all at once. The most feared thing is to be scared to death when the market drops and sell at the bottom, then feel like it’s about to take off and chase at the peak, only to get repeatedly cut by the market. Some people look at their accounts and don’t seem to have lost much, but living in such constant anxiety is mentally exhausting and not worth it.

Regarding the current market, to be honest, regardless of whether Japan raises interest rates next door (this affects global liquidity), it is very difficult to expect a huge market wave in A-shares before the end of the year. We have indeed seen the market's resilience; it occasionally gives a rebound, but looking at the current trading volume level, although it increased this afternoon, overall it still lacks sustained upward “aggressiveness.” Today the Nikkei rose slightly, Korean stocks surged, and Hong Kong stocks also rebounded; the overall environment looks decent, but for A-shares to either weaken or strengthen independently is not very realistic.

How to view tomorrow?

Based on today’s trend and the experiences you've shared, I think we should look at it like this tomorrow:

Be cautious of pulling back after rising: The surge this afternoon had a somewhat “sneak attack” nature, and the duration was acceptable. It mainly relied on large-cap stocks, and its sustainability is questionable. If the market opens high tomorrow morning, especially if the volume doesn’t keep up (the volume increased this afternoon, but whether it can continue to expand throughout the day is key), or if large-cap stocks run out of steam, it could easily lead to a pullback after rising. Don't get too excited as soon as it rises; be cautious about chasing high.

Pay attention to the relationship between the yellow and white lines: The yellow line has been suppressed today, indicating that market sentiment is not fully restored; funds are still cautious, huddled in large-cap stocks for warmth or doing index trading. If the yellow line can strengthen tomorrow, even leading the white line, then it would indicate that the market's genuine enthusiasm for buying is recovering, and the market might be healthier.

Volume is the lifeline: Funds are generally tight at the end of the year; today, the volume increased to around 1.7 trillion, but whether it can be maintained or even continue to expand is crucial for determining the height of the rebound. If the volume shrinks again tomorrow, it will likely lead to a range-bound or slight pullback pattern.

Don’t forget the “act on big drops” principle: If there is no continuation of the rebound tomorrow but instead an adjustment or another downward probe occurs, as long as there’s no systemic crash, based on your “act on big drops” strategy, under the premise of controlling positions, there may again be some short-term opportunities. But remember the premise: small positions!

To summarize: With the year-end market, don't have overly high expectations. Today's rebound driven by large-cap stocks should first be seen as a technical rebound. Tomorrow, focus on observing the volume and the positions of the yellow and white lines, while guarding against pullbacks after rises. In terms of operations, don’t chase after big rises, and don’t panic during big drops (with small positions); maintain patience, conserve strength, and wait for more certain opportunities. The market has resilience, but lacks aggression, so let’s take it steady!