According to the rules, we should talk about the B-circle market first and then talk about A-shares.
After the market started the downward cycle last week, it began to trade sideways around 26,000. This is the beginning of sideways trading at a new position after trading sideways at 29,000 for a month.
From the perspective of rebound, the rebound strength last week was obviously insufficient. Bitcoin only reached a high of around 26,800, and Ethereum only touched around 1,700 at most, indicating that the bullish force was weak, and a wide range of fluctuations between bulls and bears was not formed. Instead, the market chose to consume the market by "horizontally replacing increases".
And this consumption will eventually make the bulls lose the best opportunity to rebound.
From the perspective of highs and lows, after the second decline last week, the 2H low signal that appeared in the middle of the week formed a certain rebound support. The impact of the current low has expired, and there is no signal of a larger cycle low, so the market cannot be judged to have stopped falling. Only if it continues to move downward below 25,800 and below 1,620 will new low support levels appear.
The strategy still maintains the viewpoint of last week's weekly report [After the end of the upward trend]. Since it is currently an adjustment period, in general, this quarter's strategy is still "mainly high-short, mainly low-long", paying more attention to the rebound highs of mainstream and copycat stocks, and selectively intervening at lows;
In addition, let's talk about the current A-share market. Since the last 253rd weekly report [Will the A-share market surpass the PIXNET market in the second half of the year?], the A-share market has seen a wave of upward trend at the end of last month. From a purely technical point of view, the three major indexes actually had very good support at that time. If they rise upward, there should be a larger rebound.
But the market is always right. In the past two weeks, the market did not choose to break upward, but chose to break downward.
We can see from the figure below that the "Shenzhen Component Index" broke through the triangular oscillation range, and the price directly hit the lowest point in May 2022; while the "ChiNext" index broke through the lowest point, setting a new low in the adjustment in the past two years.
From a technical perspective alone, the market after the break is temporarily not worth participating in.
But Sunday’s “nuclear-level good news” seemed to have restored hope for the market.
Several "stamp duty reductions" in history have almost always brought about a sharp short-term rebound. Without saying too much, a 20% rebound in the index within a week is possible.
However, judging from the trend this morning, the market opened high and ended low, and it seems that investors are not buying into the trend. Is there still no hope for the market?
Let's look at the impact of this news on A-shares from a technical perspective:
As for the Shenzhen Component Index, last week's low point reached support near the previous low point. The short-term positive rebound brought about a stop in the decline and a slowdown, which is of certain significance. Last week's decline was too fast to form a low point. If the decline is stopped this week and there is a short-term sideways movement, then this place has the opportunity to form a stage bottom.
As for the ChiNext, the wave pattern was quite obvious, with a 5-wave decline. However, since the 5-wave decline was relatively fast and the time was relatively short, it was impossible to judge whether the decline had stopped. However, the rebound brought by the news was like timely rain, which turned the rapid decline into a slow decline.
In terms of time, the ChiNext's first wave has gone through 34 cycles, and the current fifth wave has gone through 20 cycles. So assuming that this wave of rebound continues to go downward after sideways, around 2000 may be the "end point" of this round of decline. So overall, there is not much room left to the "bottom", and there is no need to panic.
Finally, the Shanghai Composite Index's trend is more inclined to the C wave decline of the ABC adjustment wave type. The same trend can also be applied to the "ChiNext". It will take some time, and in terms of space, above 3,000 points will be the "end point" of the market adjustment.
So on the whole, although today's high opening and low closing are somewhat disappointing, from a technical point of view, the rebound brought about by this good news is of certain significance. It has slowed down the speed of decline. Even if there is a volatile decline in the next two weeks, the space will not be too large. The wave pattern has also begun to enter the final stage. In terms of time, it only lacks a perfect low point signal.
Let’s be optimistic again and give the market some time. We’ll come back and see next month.