[Red Envelope] Teaching You How to Understand Breaking Through Support Levels! The Eagle's Undefeated Myth Collapses, A-Stock Market Welcomes a Change of Era with a Sharp Decline~!

Teaching You How to Understand Breakouts! The Eagle’s Invincible Myth Collapses, A-shares Welcome a New Era with a Major Drop~![Taogu Ba]
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Gods do not bleed.**
But today! The gods of the Western world are really bleeding!
The eagle’s century-old invincibility myth is finally torn apart, falling from the throne.
The old order collapses, and a global storm suddenly erupts.
Meanwhile, A-shares are experiencing the most brutal, extreme, and irrational continuous decline,
to endure the pain of the era, shuffle history, and pave the way for the future!
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This is not a decline; it’s a change of heaven!**
This is not panic; it’s rebirth!
The east rises, the west sets—an inevitable conclusion!
The old gods are dead; a new order must be established!
Only those who can withstand this round of bloodshed deserve the next wave of slow bull market!

The index has entered a stage high point. The market has naturally experienced a series of corrections, with accelerated declines on Friday. How should we view the upcoming market?

Everyone’s recent feeling in the market should be very clear, right? Facing daily widespread declines, chaotic sector rotations, unordered individual stock rises, plus various follow-up declines, it’s almost impossible to know where to start. Many people probably have this feeling: every move seems to invite punishment.

In fact, this is an inevitable result—the overall big trend is downward, and the current market is dominated by extreme bear sentiment. Every year, the market goes through a nearly “unsolvable” difficult phase. It’s not just ordinary retail investors; even hot money and quantitative funds have been repeatedly harvested recently. Just check the龙虎榜 (Top Traders List) to see clearly.

The way to cope with this phase is actually very simple: either stay out of the market or use very light positions to test and feel the market rhythm in small ranges. The core is to follow the trend. The current environment is not suitable for large-scale long positions; forcing entry is going against the trend.

Some retail investors with insufficient understanding might say: “Aren’t there still people making money in the market?”
That’s correct. Even during a retreat, there are still daily limit-ups, and some can catch them.
But you must see a truth clearly:
People who make money during a retreat, over the long term, are never the same group.
Most people find it very difficult to profit steadily in such counter-trend environments.

Don’t envy others’ short-term gains; lowering expectations and maintaining a calm mindset are the most important.
At this stage, it’s not about how much you can earn, but whether you can protect your principal, lose less, or even avoid losses. Quietly feeling the market rhythm and patiently waiting for a truly clear right-side entry opportunity is more important than anything else.

The turmoil in the Middle East is intensifying global market volatility, and instability abroad will continue to drag down A-shares. The current A-share trend is comparable to the consolidation cycle after the main rally ended on August 25 last year, which lasted nearly three months! However, this round of consolidation is noticeably shorter, and combined with the dense disclosure periods for annual and quarterly reports at the end of March, multiple uncertainties suggest the consolidation pattern may continue until the end of March, with a new wave of market rally expected to officially start in April. These are core judgments repeatedly emphasized in previous public analyses.

Looking back at the recent Middle East conflict, the core logic behind the eagle’s actions is very clear. Why does the eagle want to strike the Persian cat? Essentially, it’s about controlling oil, consolidating the petrodollar, and maintaining global hegemony.
The root of dollar hegemony is that buying oil must be settled in dollars. Controlling oil means controlling money!
Controlling money means controlling the global economy!
The world is working for the eagle! Now, the Persian cat is directly pushing for oil to be settled in RMB, which is fundamentally undermining the dollar hegemony.
Over the past decades, anyone who attempts to challenge the dollar’s settlement power in oil has been suppressed, sanctioned, or even faced war by the eagle.
Iraq, Afghanistan, Venezuela, Persia, and the White Bear—without exception.
Any attempt at de-dollarization or bypassing the dollar in oil sales will make one a target of the eagle’s wrath.
The more the eagle suppresses, the more the Persian cat de-dollarizes.
The faster RMB internationalization accelerates.
This is the most direct and deadly erosion of eagle hegemony, a long-term major benefit for China.

The current conflict between the cat and the eagle has entered a fierce stage. The Persian cat has already dismantled the eagle’s “golden palace,” including the THAAD missile defense systems, and yesterday even hit a US F-35 stealth fighter, breaking the myth of US air dominance. Gods do not bleed; this conflict has revealed the true cards of the US to the world.

Based on the pace of news, the full outbreak of this turmoil is highly likely to start next week, with the eagle’s Marine Corps expected to arrive around the 25th and begin landing operations. Coupled with the synchronized acceleration of declines in US and A-shares, the market has already hit two lows in a row, and the bottom of this round of correction is most likely to appear next week.
If a third bottom occurs, it could create a short-term, definite trading opportunity. Therefore, during next week’s continued divergence and sharp decline, there may actually be a short-term thinking point!

Many people are discussing the breakout over the weekend, worried about next week’s direction. In fact, we already anticipated this breakout on Thursday through the psychological game of bulls and bears, so it’s not something we just realized over the weekend.

Teaching You What Is the “Chip Equalization Breakout Swap”

Only a breakout can create a true stage bottom!

Many say “no break, no rise,” but few truly understand the underlying logic. Today, I’ll explain clearly: what is the “chip equalization breakout swap.”
You can compare it to the shock on August 25 last year, when only after the breakout did the bottom truly appear.

First, the logical root:
The market isn’t only made up of short-term traders; there are also indicator watchers and trendline supporters. These two groups of funds account for about 60-70% of the market, with short-term traders being a minority.
The market must break the level to force out these support and trendline-based funds’ chips.

If the market doesn’t effectively break through the left-side lows, they will, like on Thursday, believe that the index is testing a key support level, forming a double bottom, and start fantasizing that this is the bottom, choosing to lie flat and wait for a rebound.
A key detail in the market is:
On Thursday, despite a widespread decline of 4,600 stocks, only 5 stocks hit the limit down—that’s the result of funds fantasizing about a bottom and lying flat.
But on Friday, the market fully broke the level, invalidating the double bottom expectation, and panic selling surged. Although about 4,500 stocks declined, fewer than Thursday, the number of limit-down stocks jumped to 13.
The difference is: a breakout completely cuts off the support and trendline traders’ hopes for a bottom.

From the perspective of chip equalization:
The bulls still holding on are essentially trapped positions.
If they don’t cut losses, once the market rebounds, they will become the biggest unstable selling pressure, gradually selling into the rebound, blocking the upward momentum, leading to weak, fragmented, and unsteady rebounds.

That’s why I clearly warned on Thursday: there is a breakout risk.
Whether comparing to the last correction bottom or from the chip equalization perspective, this breakout is a necessary process.
In Thursday afternoon, some funds tried to defend the 4,000 level by buying securities, banks, and insurance stocks, but the bulls remained unmoved, indicating that this is not the real bottom recognized by the market.

The biggest short-term bearish force now is actually those stubborn trapped bulls waiting for a rebound to unload.
Only by clearing out these weak, stubborn trapped positions and transferring chips to new funds willing to bottom-fish after the breakout can the chip equalization be completed.
These bottom-fishing funds won’t be easily shaken out by short-term fluctuations; they are the truly determined bulls.
Only when the chips are thoroughly exchanged can the subsequent rebound be sustained and strong.

Finally, a key reminder:
The “breakout swap and chip equalization” I discussed today only applies to phase adjustments within an upward trend, not to a true downtrend.
As long as you believe in the east rising and the west setting, believe that the A-shares slow bull pattern is intact, and combined with the clear signals of stability from weekend policies, then during this breakout and rapid chip exchange, the index can be gradually positioned on dips.

From a short-term rhythm perspective, the market has already experienced two “ice” points.
On Friday, those funds stubbornly holding the 4,000 double bottom support were proven wrong at the close, and on Monday, a wave of panic selling is likely.

But if the market continues to decline on Monday, it will create a relatively certain short-term rebound opportunity next week. Because, in the short term, the market has a rule: even if weak, encountering three “ice” points usually triggers emotional recovery.

This logic of chip breakout exchange applies not only to the main index but also to individual stocks in a good upward trend (remember: it does not apply to falling stocks).

Looking back at recent leading stocks:

• Bawei Storage on March 3
• Xin Yisheng on November 24 and February 6.
  These major trending stocks all experienced a thorough chip equalization breakout before the main rally started.

The logic is simple!
A well-performing, expected upward trend stock, when entering a phase adjustment, must break the level to clean the chips.
Only a breakout can force out the indecisive, chasing high, “wallflower” chips.
Those that can stubbornly stay or newly enter after the breakout are truly fearless and confident in the future.
When these inferior chips are handed over to genuinely optimistic funds, the chip exchange is complete.
That’s the purpose of the adjustment!
The subsequent powerful rally is because the chips are light and well-organized.
This is a very counterintuitive operation—understanding and thinking about it more will make it clear.

Another key signal on Friday: the ChiNext Index created a new high of 3,426 points against the trend.

This reveals two core messages:
First, the market as a whole is one entity; the continued strength of ChiNext will eventually help stabilize and boost the Shanghai Composite.
Second, the clear divergence between ChiNext’s strength and the Shanghai’s weakness indicates an upcoming shift in market style.

Even looking into next month, the main capital flow will still focus on AI and big tech trends. In the future, everyone should dare to focus on these trend sectors.

Remember the resonance slow bull indicator I repeatedly mentioned? Every time the market hits a phase bottom, it’s a key opportunity for reflection.
Looking back, it’s very clear: targets like Yizhongtian Shenghong, which resemble the “Seven Flowers of the US Stock Market,” are the most comfortable and cost-effective choices for trend funds.

Here’s another critical point after the index bottoms: whether the buying strength has truly increased.

The past two weeks have been tough because:
The market has been shrinking in volume, with quant funds holding the pricing power, leading to broadening but weak buying.
Reflected in the charts: funds are reluctant to follow through; even on recovery days, the rotation is scattered, lacking a main line.
Even the strong directions that resisted declines yesterday, on the day of broad gains, instead saw some correction!
Another extreme and distorted signal is the mismatch between the number of limit-up stocks and red (up) stocks.
Like in the chart, nearly 4,300 stocks are up, but only 55 hit the limit-up.
In a market with strong buying intent, during broad gains, the number of limit-ups should reach around 90.
This is the most direct sign—funds’ buying strength is insufficient.

Even if the index bottoms later, these signals must improve:

During broad gains, funds should be willing to focus on chasing stronger profit-taking stocks! No more chaotic rotation!

The number of limit-up stocks should significantly increase during correction days.
Only when these signals strengthen together can short-term success rates and odds greatly improve. This is the core to watch in the coming days.

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Thanks for your continuous support! Wishing everyone a smooth post-holiday journey and ever-rising accounts!