10.13 Morning Session: Tuesday's Trend and Trading Strategy

The stock market experienced a minor decline on Monday, closing at the 20-day line, indicating that the pressure at this level remains significant and the trading volume is insufficient to break through. Considering that nine new growth enterprise board stocks will begin subscription on Tuesday, the liquidity situation is relatively tight, so it's already quite good for the market to maintain this state under such circumstances. In my view, the short-term strength of the market depends on the performance near the 20-day line. The ability to break through with increased volume and stabilize above this line will be the key sign of market strength.

Recently, I've received many emails asking about the October market trend. In fact, I have already discussed the October market multiple times. My definition of October is a month of consolidation and recovery. After the sharp adjustments in the previous two months, October will be a recovery month. It will be difficult to see a major breakout in October, given the batch of growth enterprise board subscriptions and their expected listing by the end of October, which will inevitably divert some funds. Therefore, the possibility of a major breakout in such a fund-diverted situation is low. For October, as I mentioned, it's a strategic layout period for medium and long-term investments. One should pay attention to sell high when the market rises sharply and then buy low when it falls, thus reducing the cost of holding stocks.

In the short term, since the international market continues to strengthen, I personally believe that as long as the support of the half-year line is not effectively broken, the market can still be optimistic. Even if the September economic data is relatively ideal, it cannot be ruled out that there may be an upward test of the 60-day line, but overall, the recent market trend remains volatile.

In terms of sectors, non-ferrous metals face short-term adjustment pressures, but are still worthy of attention in the medium to long term. Whether the short-term market can break through largely depends on financial and real estate stocks. If these two sectors do not strengthen, the market basically has no hope. The key lies in these two sectors.

In terms of operation, the key to short-term operations lies in individual stocks. Stocks that have risen sharply in the short term can be sold high opportunistically. As for medium and long-term layout stocks, operations should be carried out with confidence. Medium and long-term layouts should be made in batches, choosing opportunities to buy low.

Regarding the changes in market funds, I have emphasized this multiple times recently. This is a fact, and various information is proving my judgment. In the past month or so, fifteen new funds have been established, the QFII single quota has been raised from eight billion US dollars to ten billion US dollars, and large amounts of funds flowed in during June and July. These are the best proofs.

Undoubtedly, the first half of the year's market belonged to the credit fund inflow market, where a large amount of funds were the left hand and right hand of credit funds. Under the supervision of the banking regulatory commission checking loan fund flows and the central bank slightly adjusting the credit limit, the withdrawal of these funds was very natural. Those stocks that rose high in the previous period and fell hard in this adjustment wave were undoubtedly caused by these funds.

As the nature of funds changes, the characteristics of the market will certainly change. Personally, I think that since the influence of funds and foreign capital is beginning to strengthen, those stocks with high growth expectations will be favored. Therefore, I am optimistic about sectors with larger growth expectations such as finance, real estate, power equipment, and consumer goods (real estate stocks still need attention. From the estimated situation of real estate stocks, performance will increase significantly, but current real estate sales are not good, so speculative funds will lower the space due to these factors, and specific observations need to be made on the market trend). Debt collection, the recent strengthening of the electrical appliance sector is somewhat similar to the automobile stocks in the first half of the year; based on some speculative characteristics of foreign capital, sectors related to international commodities such as non-ferrous metals and agriculture also have stage-wise opportunities.

In addition, severely undervalued or unexploited stocks, such as shipping stocks due to the international economic recovery, should have profit expectations. The recent rebound in maritime freight price indices is a sign. Other potential hot topics include new energy, environmental protection, energy saving, and pharmaceuticals.

For other sectors, my opinion is to follow the waves and seize opportunities. As for sectors that went crazy in the last round of the bull market, my opinion is: generally, they will not go crazy again, except for those that can interact with international speculation like non-ferrous metals and resource stocks. Because resources are themselves risk-hedging tools under inflation expectations and are prone to attract capital attention. As for other sectors, one must analyze its relationship with economic prospects and its own industrial development space. If the development space is still good and fell earlier, it can still be paid attention to.

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