3000 points of strong support, the bottom of the market is solid?

The support of 3,000 points does exist, and the market bottom is clearly characteristic. First of all, from a technical point of view, 3000 points is an important integer threshold, which has a great impact on the psychology of investors, and has been the starting point of the market rebound many times in history. In addition, some analysts pointed out that the current market bottom characteristics are very obvious, such as the obvious shrinkage of trading volume, etc., and there are also views that the market has a number of bottom characteristics, and there is no need to be too pessimistic about the market outlook.

However, to determine whether the market has truly bottomed out and formed an effective support, a number of factors need to be considered. According to the evidence, the formation of a market bottom requires the cooperation of multiple factors, including but not limited to liquidity bottoming, policy support, reasonable valuation, etc. For example, some reports pointed out that the bottom of the current round of the market is likely to have been formed in December last year, and with the steady growth and the implementation of capital market policies, A-shares are expected to gradually start a restorative market. In addition, many brokerages remain optimistic about the A-share market in 2024, predicting that market opportunities outweigh risks, and the valuation center may be further raised.

Although 3,000 points provide important technical support, and the characteristics of the market bottom are obvious, whether it can be confirmed that the market bottom has been firmly established, it is necessary to further observe the changes in market liquidity, policy support, corporate profitability and other factors. Therefore, it can be considered that the 3000 point support is strong, but whether the bottom of the market is completely solid still needs to be combined with more dimensional information for comprehensive judgment.

What is the specific performance and case analysis of the 3000-point support in history?

The specific performance and case analysis of the historical support strength of 3,000 points show that 3,000 points has an important psychological and technical support role in the A-share market. Since 2007, when it first stood above 3,000 points, this key point has become one of the focus of the market. For example, on February 26, 2007, the Shanghai Composite Index jumped 1.41%, standing above 3,000 points for the first time in history, but fell 8.84% just one day later, showing short-term volatility of 3,000 points. However, in 2009, under the stimulus of 4 trillion yuan, the Shanghai Composite Index once again broke through 3,000 points and stood firm, although it has since fallen again, but this also reflects the importance of 3,000 points in the market.

According to the survey of the private placement network, most private placements believe that the Shanghai Index near 3,000 points has fully reflected various negative factors, and the valuation is at a relatively bottom, so they believe that 3,000 points have strong support. This view has been widely recognized by the market, and 3000 points is regarded as the psychological defense line of investors and is the key anchor point to judge whether to stop loss or increase positions.

Several "3,000-point defense battles" in history further prove this. For example, the defense battle from April to June 2008, despite the strong policy bailouts, ultimately failed to hold on to 3,000 points, showing that under extreme market conditions, even with policy support, 3,000 points of support may face challenges. On April 24, 2008, the State Administration of Taxation lowered the stamp duty rate to 1%, which stimulated the Shanghai Composite Index to rise 9.29% to close at 3,583.03 points, marking the first successful hold of 3,000 points.

In addition, from the perspective of long-term trends, although the market has experienced a process of multiple breakdowns and rebounds, each fluctuation highlights the importance of 3000 points as a psychological and technical support for the market. For example, the one lost in April 2011 took 1,323 days to recover, showing the market's long-term recognition of the importance of 3,000 points.

The historical strength of 3,000 points is mainly reflected in its importance as a psychological and technical support for the market, as well as its ability to attract the attention of policy interventions and market participants at critical moments. Despite the volatility experienced in the market, 3,000 points has always been a line of defense in the minds of investors, and its support is not only reflected in the short-term rebound and recovery, but also in the long-term market trends and investor behavior.

A detailed analysis of the characteristics of the current market bottom, including the causes and effects of the shrinking volume.

A detailed analysis of the characteristics of the current market bottom involves a number of aspects, including the causes and effects of volume contraction. We can analyze it from the following perspectives:

1. Reasons for the shrinking volume:
2. The continued contraction in trading volume may be due to the overall weakness of the domestic economic recovery, the relative lack of incremental funds in the market, and the serious wait-and-see sentiment before the Fed's interest rate meeting.
3. The release of policy concentration has little effect, and the net outflow of internal and external funds has continued, resulting in low enthusiasm for market longs.
4. During the downward trend of the index, events such as illegal reduction of holdings and short-selling of securities lending, etc., affected investor sentiment and confidence.
5. Approaching the Mid-Autumn Festival and National Day holidays, the inertia of the market is also a factor.
6. The market lacks the main line, the funds cannot form a joint force, there is no follow-up effect, and there are many stocks and sectors on a one-day trip.
7. Impact of volume contraction:
8. Shrinking trading volume is often a signal of stage change, but it is not an absolute inflection point. Generally, in the middle and late stages of a wave of adjustment, the market tends to trade coldly, which is not only the performance of reluctance to sell in the later stage of adjustment, but also a signal for possible stage changes.
9. At the beginning of the stock market, the stock price rose sharply while the transaction volume was seriously reduced, and this upward divergence was a symptom of a strong upward wave.
10. After the extreme shrinkage of trading volume, there is a continuous large number of stocks to push the stock price higher, indicating that the stock is facing the selling pressure of the intensive hedging area in the early stage, and the stock is under great upward pressure.
11. The shrinking trading volume shows that the funds outside the market are unwilling to enter the market, and the stock funds in the market are playing, so the upward momentum is insufficient.
12. Market Bottom Features:
13. The proportion of penny stocks, the proportion of broken net shares, the median M2/total market capitalization, the median PE and the inverse of the 10-year treasury bond yield, whether the city's trading volume has bottomed out, whether the liquidity of individual stocks has bottomed out, the median of the largest decline in the range, and the sentiment indicator (the breakage rate of sub-IPOs) are all important indicators to measure the characteristics of the bottom of the market.
14. At present, the PE valuations of the Shanghai Composite Index, CSI 300 and ChiNext Index are all around the 25% percentile in the past ten years, with a certain margin of safety. The proportion of A-share companies that broke the net accounted for 12%, which has exceeded the 11% on April 29 this year, second only to the 15% in 2008 and 16% in 2005.

The main reasons for the shrinkage of trading volume include the lack of incremental funds in the market, the lack of obvious policy effects, the frustration of investor sentiment and the holiday effect. The impact of the shrinking trading volume on the market is mainly reflected in the fact that it may be a signal of stage change, but it also reflects the lack of upward momentum in the market. At the same time, by analyzing multiple indicators such as the proportion of penny stocks and the proportion of broken net shares, we can understand the characteristics of the market bottom more comprehensively.

The specific impact of stable growth and capital market policies on the formation of the bottom of the A-share market.

The specific impact of stable growth and capital market policies on the formation of the bottom of the A-share market is mainly reflected in the following aspects:

1. The formation and confirmation of the policy bottom: the development of stable growth policies, such as the real estate policy support, the total monetary policy tool to re-exert the force, fiscal tax cuts and fee reductions, etc., have enhanced the market's confidence in the future economic repair, thus forming the so-called "policy bottom". The implementation of these policies, especially during the period when the epidemic had a greater impact on the economy, has rapidly increased the necessity and urgency of policies to stabilize growth, providing support for the stabilization of the A-share market. After the intensive introduction of previous stability maintenance policies, A-shares often rebounded, confirming the existence of a "policy bottom".
2. Restoration of market confidence: With the effectiveness of the policy of stabilizing growth, market confidence has been restored to a certain extent. For example, Wang Jianjun, vice chairman of the China Securities Regulatory Commission, mentioned that positive signals in real estate and platform economy are conducive to stabilizing expectations in all aspects, and the progress of listed companies in resuming work and production has accelerated, and the performance has grown steadily, which are important factors for the smooth operation of the capital market.
3. Improvement of economic fundamentals: The implementation of the policy of stabilizing growth has accelerated the recovery of the economy and provided support for the long-term upward trend of the A-share market. At the same time, policies at the capital market level, such as the reduction of refinancing rates and the market-making of the Science and Technology Innovation Board, have also injected incremental funds into the market and improved market liquidity.
4. Changes in the characteristics of market bottoms: Historically, the formation of bottoms in the A-share market has often been associated with improved fundamental expectations, which are often related to the effectiveness of policies. "Policy bottom-sentiment-growth bottom" is a common bottoming pattern in the market. However, as time goes on, the role of policy on the bottom of the market gradually weakens, and fundamentals gradually become the core force that pushes the market out of the bottom.
5. Short-term fluctuations and long-term trends: Although the market may fluctuate and adjust due to factors such as weaker-than-expected policies and poor macro data in the short term, in the long run, stable growth policies and deepening reforms in the capital market will contribute to the long-term positive trend of the market.

Steady growth and capital market policies have had a positive impact on the formation of the bottom of the A-share market by enhancing market confidence, improving economic fundamentals, and enhancing market liquidity. These policies not only provide support for the market in the short term, but also lay the foundation for the stability and development of the market in the medium and long term.

What is the main basis for the optimistic forecast of the A-share market in 2024?

The main basis for the optimistic forecast of the A-share market in 2024 includes the following points:

1. Policy Support and Economic Recovery: Most brokerages believe that the continued release of stable growth policies and the improvement in external demand after the end of the global tightening cycle will promote a modest recovery of the domestic economy. At the same time, global scientific and technological innovation has entered an upward cycle, and the inventory cycle has been fully depleted, indicating that the earnings of A-share enterprises are expected to rise, and the inflow of funds will also stabilize and rebound.
2. Capital Market Reform and IPOs: Deloitte Capital Markets Services Group predicts that there will be 260 to 330 new listings in the A-share IPO market in 2024, raising approximately RMB267 billion to RMB317 billion. The goal of the reform of the survival of the fittest in the capital market is gradually being realized, and the liquidation of problematic stocks will be accelerated, and the "exit gate" will be further unimpeded while strictly controlling the "entry gate."
3. Improvement in capital supply: Standing at the starting point of the Fed's interest rate cut cycle and the sixth round of capital market policy cycle, foreign capital is expected to return to inflow, resonate with domestic medium and long-term funds and institutional funds, and regain control of market pricing power. It is estimated that the incremental capital of A-shares in 2024 may reach 1.2-1.7 trillion yuan.
4. Industry and style conversion: Forecasts show the rise of the A-share growth style, and the micro-cap and high-dividend styles with significant excess returns in the past two years are relatively weak. At the same time, China's nominal GDP growth rate has improved significantly compared with 2023, driving corporate earnings and household income to rebound, M1 growth to pick up significantly, and macro policy efficiency to increase significantly.
5. U.S.-China Economic Relations and Monetary Policy: The nominal economic growth gap between China and the United States and the interest rate differential between China and the United States are forecast to converge significantly, driving the RMB exchange rate into appreciation territory. In the first half of the year, the U.S. economy fell more than expected, and the number of interest rate cuts exceeded three times during the year.

The optimistic forecast for the A-share market in 2024 is mainly based on policy support, economic recovery, capital market reform, improvement in capital supply, industry and style transformation, and positive changes in China-US economic relations and monetary policy.

The impact of market liquidity, policy support and corporate earnings on market bottom judgment.

Market liquidity, policy support, and corporate earnings are important factors in determining the bottom of the market. Market liquidity refers to the likelihood that an asset can be bought or sold at the current market price without affecting its value, and it measures the efficiency of a market that allows participants to buy and sell assets at a stable price. High market liquidity means that investors can execute large-scale orders quickly and without having a large impact on the price of the asset. This suggests that high market liquidity can be a positive sign when judging market bottoms, as it indicates that market participants are able to complete trades with ease and that there is a high level of market activity.

Policy support is also an important factor affecting the judgment of the market bottom. Although the impact of policy support on market bottom judgment is not directly mentioned in the materials I searched, according to common sense and the general principles of market analysis, government policy support, such as tax cuts and increased public spending, usually increases market confidence and economic growth, which may help the market bottom out.

Corporate profitability is another key factor. If corporate profitability starts to improve, then the market may expect an improved economic outlook, which could drive the stock market higher. For example, a rebound in credit impulse means that credit stabilizes, which tends to have a certain lead over the bottom of the market. Historically, sharp market declines have often been accompanied by deterioration in fundamentals, so as a leading indicator of earnings, as credit bottoms out, market expectations for earnings stabilization will also rise, and the stock market is expected to recover.

Market liquidity, policy support and corporate profitability are all important factors influencing the judgment of market bottoms. Market liquidity reflects the activity of the market and the convenience of trading, policy support can affect the judgment of the market bottom by improving market confidence, and corporate earnings are directly related to the fundamentals of the economy and are one of the key indicators for judging the market bottom.