Text | Tianfeng Source | Wealth Unicorn’s first trading day after the National Day has arrived with great anticipation. The surge in Hong Kong stocks during the holiday has made many people impatient. Today, both cities opened significantly higher, with the Shanghai Composite Ind

text | Tianfeng

source | Wealth Unicorn

The first trading day after the National Day came in the midst of great expectations. The surge in Hong Kong stocks during the holiday made many people impatient.

Today, both cities opened significantly higher, with the Shanghai Composite Index opening 10.13% higher, the Shenzhen Component Index opening 12.67% higher, and the ChiNext Index opening 18.44% higher. This shows how eager OTC funds are to enter the market.

However, after opening high, the two cities failed to avoid the script of opening high and going low.

On this day, all kinds of indexes performed a trend of opening higher, moving lower, and pulling back. Many individual stocks showed "heaven-earth-heaven" price limit. Funds that were optimistic about the market outlook poured in, and they closed or closed when they saw good results. Those who were caught out also sold wildly, and each other passed by each other without even having time to curse.

1

A stocks and Hong Kong stocks staged a fierce long-short game, resulting in a sharp increase in transactions in the Shanghai and Shenzhen stock markets.

On that day, only 20 minutes after the opening, the transaction volume of the two cities exceeded one trillion; one hour later, the transaction volume of the two cities was 1.63 trillion; at the close of the morning, the transaction volume was 2.48 trillion, close to the 260 million on September 30; as of the close of the day, the two cities' transactions The transaction volume reached 3.45 trillion, setting a new record in history.

As of the close of the day, the Shanghai Stock Exchange Index rose 4.59% to close at 3489.78 points; the Shenzhen Stock Exchange Component Index rose 9.17% to close at 11495.10 points; the GEM Index rose 17.25% to close at 2550.28 points.

The three major A-share indexes continued their crazy performance on the first day after the National Day. However, the external market did not synchronize this time.

On that day, all major Hong Kong stock indexes fell sharply. Hang Seng Index fell 9.41% that day, the State-owned Enterprise Index fell 10.17%, and the Hang Seng Technology Index fell 12.82%.

As for the reasons why Hong Kong stocks and the FTSE a50 fell, firstly, the expectations of the Federal Reserve's interest rate cut have obviously weakened, and secondly, the recent huge increase in Chinese assets.

A lot of domestic funds invest in A-shares, mainly based on the trend of Hong Kong stocks. Therefore, when the Hong Kong stock market fell, everyone panicked! This is also an important reason for the huge selling orders in early trading.

Although A-shares have been stabbed by Hong Kong stocks, many bulls chasing the rise are still confident. An important reason is: During the National Day holiday, the number of brokerage accounts opened increased fourfold. It is said that a total of five to six million new investors have opened accounts. They feel that with these new leeks taking over, they cannot be trapped.

Whether this expectation can be realized will be known in the next few trading days.

However, not everyone likes to chase the rise. After the Shanghai Composite Index rose by nearly 40%, many investors are worried about how far this wave of market prices that suddenly broke out due to policy stimulus can go?

2

Copy the old script of the "Bull Market", or perform a new trick?

According to common sense, after a sharp rise, it fluctuates around 3300-3700, digesting profit chips while waiting for changes in economic fundamentals or the introduction of stronger financial policies. This should be a normal trend in the market outlook.

Judging from the experience of 2015, 2019 and 2020, after emotions enter the excitement zone, the market often continues to rise in the short term. Since then, as sentiment has declined, the market may have adjusted to some extent, but this does not mean that the uptrend has ended.

Judging from the market situation in 2015, after the National Day in October 2014, Everbright Securities and CITIC Securities led brokerage stocks to surge until the end of the first wave of market prices in early December. The market fluctuated at a high level, and the second main wave of upswing started only after the Spring Festival, with the market fluctuating for nearly three months.

China Merchants Securities pointed out that as the index surged in September to confirm the mid-term low, the overall direction of the market in the future will be upward. Since this round of market conditions is largely related to policy efforts, whether the policy intensity in October can exceed expectations will become the key to the subsequent upward market rise.

CITIC Construction Investment believes that A-shares are ushering in a round of confidence revaluation. This is because China's assets are systematically undervalued, the residential sector has accumulated a large amount of excess savings and is facing an asset shortage, strong revitalization policies have been introduced one after another, and the Fed's interest rate cut cycle has begun. , the global stock market is at a high level, foreign capital is chasing Chinese assets, and it is a market trend that resonates with multiple backgrounds. This round of market sentiment will reflect the revaluation of global funds’ confidence in China’s economic prospects and Chinese assets.

The above analysis roughly represents the current mainstream view of the market. All in all, it takes time to verify the fundamentals of this round of market conditions, and it will not be done in one step. Therefore, after a sharp rise, a shock correction is a high probability event.

Of course, the A-share market has always had only losers and winners, no experts, and specializes in dealing with all kinds of dissatisfaction.

At present, many foreign-funded institutions including Goldman Sachs , Morgan Stanley, Morgan Stanley, UBS , BlackRock , etc. are all betting on domestic A-shares. However, they were also the ones who were short on A-shares before. Therefore, for These institutions cannot be trusted blindly. Moreover, institutional investment is very different from retail investor operations. Those who like short-term operations should not rely on their suggestions.

A-shares fell sharply in intraday trading today. A very important reason may be related to the fact that the National Development and Reform Commission’s press conference on the same day did not include the expected unexpected fiscal stimulus policy. Previously, the market generally expected that a fiscal support policy of 5-10 trillion yuan would be introduced to fundamentally reverse the economic decline.

In the future, will fiscal measures be introduced to further stimulate the economy? What will be the focus and effectiveness of these measures? Under a series of policy combinations, will the property market stop falling and stabilize in the near future? These changes in fundamentals will determine this round. The key to whether the market can go far.

As for the short-term market trend, you only need to pay attention to the performance of brokerage stocks, especially Tianfeng Securities , the leader of this round of rise. When this stock fails to reach its daily limit or even falls, it means that the first stage of the market is over.