On Wednesday, the A-share market suffered a shocking reversal, and the trading volume was once enlarged to 900 billion. But on Thursday and Friday, it fell for two days in a row. Seeing such a trend, some people on the Internet have ridiculed this round of A-share bull market in the past few days, starting on July 31, 2024, and ending on August 1, 2024, lasting up to one day!
There is no doubt that this one-day trend has had a big impact on everyone's confidence in holding shares, but what Jingyang wants to tell you is that it is too early to conclude that Wednesday's counteroffensive is just a one-day trip! First of all, let's take a look at the reasons for today's market pullback, and after figuring out the reasons for the market adjustment, it will be much easier to analyze the trend next week!
In Jingyang's view, today's A-share market decline is affected by both internal and external factors, and in contrast, the impact of external bearishness on today's market is greater.
Let's talk about the internal reasons first, the pullback of the market yesterday and today is related to the large increase on Wednesday. From a technical point of view, the broader market made up for the previous gap on Tuesday and set a new low for the pullback. On Wednesday, in the weak area below the 5-day line, the long yang line was directly pulled out, and the two pressure levels of the 5-day line and the 10-day line were continuously broken, and the long funds converged below the key 20-day line. Since the market won two consecutive passes on Wednesday and deviated significantly from the 5-day line, leaving an overbought gap, most of the next few days will be shocking. The shock mode, if it is stronger, is dominated by sideways and narrow fluctuations, waiting for the 5-day line to keep up with the completion of technical repair; If it is weaker, it will take the initiative to pull back to near the 5-day line and complete the technical repair.
Therefore, the market did not continue to go up yesterday, and it turned around and went down today, which is to a certain extent related to the large single-day increase in the market on Wednesday. In the article yesterday afternoon, Jing Yang showed you the rise and fall of the A-share market on the day and the next day in the past five years. It can be seen from the table that after a sharp rise on the same day, most of the gains will narrow or even pull back the next day, for the same reason.
In addition, you should be able to notice that A-shares opened sharply lower today, and directly opened lower above the 5-day line. Under normal circumstances, even if the 5-day line is to be retraced to complete the technical repair, it is also a flat open and then a low trend, and there are not many cases where this kind of direct sharp lower opening is not many. Today's sharp lower opening has a lot to do with the overnight collapse of the peripheral market.
In terms of U.S. stocks, the three major stock indexes collectively weakened yesterday, with the Dow down 1.2%, the S&P down 1.3%, and the Nasdaq down 2.3%. Among them, the Nasdaq fell sharply and closed below the 60-day line, only from the perspective of the Nasdaq trend, the short-term situation is not optimistic. However, we do not need to worry about United States investors, because no matter how bad the technical pattern of US stocks is, it will take a few trading days to quickly repair and complete the trend reversal. This is because others have the confidence of bull market genes, so the bottom-buying funds will be fearless!
It should be noted that yesterday's downward trend in US stocks was not very friendly. Intraday, Nvidia, Tesla, TSMC and other technology giants have seen a sharp pullback! Among them, Nvidia and Tesla both fell by more than 6% in a single day. We can also see from Tesla's recent trend that the repeated violent shocks indicate that the confidence of the current shareholding institutions has been shaken. In addition, due to the financial thunderstorm, coupled with the 15% layoff and the cessation of dividends, Intel, the chip giant in the US stock market yesterday, plummeted by 20% after hours!
Although the correlation between A-shares and U.S. stocks is getting lower and lower, Jingyang has talked to you before that the correlation between the market trend is not high, but most of the technology stocks in A-shares still depend on the external face. And technology stocks are the core of A-shares, so technology stocks have been shocked with the external market, which has caused today's market to be not good-looking!
In addition to U.S. stocks, Asia-Pacific stock markets also fell yesterday! Yesterday morning, the Asia-Pacific stock market crashed across the board. The Nikkei 225 index fell rapidly after opening sharply lower, with a maximum decline of nearly 5%; Korea and Australia stock indexes also plunged by more than 2%.
In fact, some time ago, Japanese stocks were still relatively stable, and the stock markets of other countries in the Asia-Pacific region were also quite stable, as far as our A-shares were worse. Yesterday's plunge in Japanese stocks was largely related to the Bank of Japan's interest rate hike. Interest rate hikes are a monetary tightening tool, and investors will sell Japanese stocks while the yen strengthens because they are worried that the Japan economy will be suppressed.
This is the opposite of the US stock market. The recent decline in U.S. stocks was due to the weakening of the dollar due to increased expectations of interest rate cuts by the Federal Reserve, which in turn triggered capital outflows and volatility in the stock market.
Seeing this, many investors may feel a little blindsided, how to raise interest rates and cut interest rates, will cause a correction in the stock market? In fact, under normal circumstances, interest rate cuts are good for the capital market. The weakening of U.S. stocks is simply due to the special position of the dollar.
We can compare the performance of the peripheral market last night that although today's A-shares opened significantly lower under the drag of the external disk, and there was no decent reversal in the intraday, the overall decline was still smaller than that of the external disk. In the end, the market returned to near the 5-day line support level, and although the performance was weak, it did not return to the downward channel.
As for next week's trend, Jingyang believes that the market will complete a technical retracement between the 5-day line and 2890. In addition to the technical retracement support, this is also based on the comprehensive judgment of the recent capital and fundamentals.
On the capital side, yesterday afternoon, in "Smart Money Violent Bottom-Copying, A-shares have a strong probability of 8%!" In the next 1 month, retail investors can lie flat and worry-free! In the article, Jing Yang mentioned to everyone that Wednesday's surge was caused by the increase in northbound funds. Historical data shows that the probability of the market going up in the next 1 month is 80% upward.
In addition, it is worth noting that today's RMB exchange rate also broke through the 7.20 integer in intraday, and the appreciation trend is becoming more and more obvious. This is also conducive to the continued increase of northbound funds in the later stage.
In addition to northbound funds, domestic institutions and national teams have not made any major moves recently. It is impossible for the national team to be short in the current position, and there will be a protective action in the event of a decline. Domestic institutions should be a little more entangled, and there is no willingness to chase higher when it rises, and it only depends on whether the willingness to buy the bottom is strong when it falls. Overall, there is no demand for active shorting of several large funds in the current position, which is conducive to blocking the downside of the market.
From a fundamental point of view, Jingyang has repeatedly mentioned in the past few days that after the Third Plenary Session, the Politburo meeting was also held this week, and a number of central ministries and commissions have taken turns to govern in the past few days, the purpose of which is to let the domestic economy start to stop falling and stabilize in August, so as to complete the annual growth target of 5% set by the high-level at the beginning of the year.
Therefore, if you jump out of the index and look at A-shares, the two-day drawdown will not destroy the confidence of the entire market!
In addition, there has been a positive change in the market in the past few days, which I am afraid will only be noticed by careful investors. During this period, several technology stock sectors have seen a continuous upward trend and short selling. In addition to the unmanned driving that everyone knows, the strongest performance during this period is actually commercial aerospace, and the plate index only began to fluctuate at a high level today after 7 consecutive yangs.
In the process of commercial aerospace 7 Lianyang, there were several technical overboughts, but Jingyang noticed that the entire sector had no meaning of a pullback at all, and it went all the way to today. This kind of short squeeze trend rarely occurs in extremely weak or even volatile markets, and is generally only staged in strong patterns. This reflects the main funds behind it, and they are not afraid of high emotions in the near future, and dare to continue to increase their positions under pressure!
Although there was a pullback in the broader market today, and technology stocks generally fell quite a bit. However, from the perspective of technical form, the vast majority of technology stock sectors did not break the trend when they adjusted today, which laid the groundwork for next week's market to decline first and then rise!