The global market has entered a silent mode ahead of major events, with little volatility in major markets, with A-shares being the exception.
First, tonight Powell will give his 'final lecture', but very few analysts expect him to signal a rate cut in September. Therefore, global stock markets are under pressure, and gold has also fallen — but A-shares ignore this pressure and stubbornly surge to 3800 points, becoming the only 'agitator' in the world.
Second, it is now unimaginable what news could cause A-shares to fall; good news will rise, bad news will rise, and even waiting for news will rise. However, what makes this round of rally concerning is that the increase is too rapid; in the past 14 trading days, there have only been 2 days of decline, and the rise has not been digested through a pullback and consolidation. Once there is a slight change, the volatility may be amplified. It's like climbing a mountain; you reach the top in one breath, without resting, and then immediately go to conquer another peak.
Third, another characteristic of this round of market is the lack of participation from foreign investors. Goldman Sachs' data reveals a key point: global funds' allocation to China is only 6%, close to the bottom of the nearly ten-year range. This can be seen as a 'potential positive' — foreign capital may significantly increase its position in the future, or it can be understood as a 'negative signal' — indicating that they do not trust this rebound and lack confidence.
One fortunate aspect is that the market has not yet seen the kind of nationwide fervor and 'sloganization' seen in 2015 (for example, 'certain points are not a dream'). So, the current agitation resembles a 'forced march' rather than 'madness'. There may still be more upward movement in the short term, but the more one-sided it becomes, the more one should pay attention to turning points.