Hexun Investment Advisor Cao Bing: A-shares experience another sharp decline. Can they turn red again tomorrow?

The market has been rising for two consecutive days, but today it suddenly shifted to a general decline. Why did this sudden reversal happen? Who is driving the car of the bull market in reverse? According to Cao Bing, a Huoxun investment advisor, the sharp plunge at the end of the day was particularly fierce. Stocks that had been rising over 4,000 suddenly switched to falling, and the spark of the rebound was immediately extinguished. Seeing this, many retail investors started to panic again, not knowing what to do. But everyone, don’t worry. In these critical moments, we need Lao Cao to come out and answer questions and clarify the situation. Today, Lao Cao will analyze the market for everyone and tell you what to do next. What you need to do now is click the little red heart and follow us, listen carefully without missing a word. Alright, enough chatter, let’s get straight to the essentials.

First, let’s look at why the market crashed today. The market was actually quite strong in the morning, but the influx of new funds was limited. The already limited liquidity was being harvested back and forth by quantitative funds, which directly led to the market weakening.

Second, major stocks like insurance, securities, and non-ferrous metals collectively dragged down the index. The main players actively sold off, and as the index weakened and declined, it became inevitable.

Now that the market situation is clear, what will happen next? First, Lao Cao believes today’s correction is normal and doesn’t carry much negative news. After the impact of the Black Swan event, the market needs time to recover. Bottom oscillations are normal, and this process can be painful. Everyone should relax and be patient; ultimately, the market will give us the answer we want.

Second, the main players allowing the decline or even actively selling is to make those chasing the rally hesitate and to clear obstacles for future upward moves. Previously, when the index broke above the 5-day moving average, many retail investors chased the rally, and the short-term trend naturally entered a consolidation phase. You can do some high sell and low buy, but this does not affect the overall medium-term upward trend. Medium-term positions should be held with confidence.

Third, Lao Cao still believes the future market will oscillate upward. Everyone must not become pessimistic and panic at a decline, nor chase high in a frenzy at a rise. Be more rational and calm. As always, it’s better to participate with light positions in the short term.

(Editor: Wang Gang HF004)

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