Hexun Investment Advisor Wu Gangwei: Sharp decline with decreasing volume, all the dirt and sand falling together! A key signal will appear tomorrow, Wednesday!

This morning, the market still looked like it was saying “don’t go, fellow villagers,” but by the afternoon, it stopped pretending. With a volume shrinkage of 100 billion and a sharp decline, are we heading into a 4,000-point defense battle again? Wu Gangwei, an investment advisor at Hexun, analyzed that the market’s poor outlook was evident right at the opening today. Both China Merchants Securities Insurance and Banking sectors started acting up, and although the index appeared peaceful, risks were hidden beneath the surface. The tech stocks that rebounded yesterday were sold off completely this morning, further confirming that funds are now cashing out at high levels. Have all the funds run to Laodenggu? Yesterday, the third “golden needle” hit a bottom, and we thought there might be at least a weak rebound like the previous two times, but it couldn’t even hold half a day. This morning’s retail investors who chased in are suffering. The current market features a volume-shrinking, downward shadow trend. Recently, high-level sectors have collectively pulled back, leaving few stocks with an upward trend. Without leading stocks hitting new highs, relying on sporadic rebounds in oversold sectors won’t stabilize the market, leading to a weak, fan-like rotation in the declining trend.

Today, the market has closed four consecutive down days. Can it recover tomorrow? Or will it drop below 4,000 points? The situation is becoming critical. Yesterday, the strategist advised waiting and reducing positions, but today, many still couldn’t hold back. What will happen tomorrow? Don’t panic. The market’s lowest point today was exactly at 4049, just above yesterday’s low of 4048. Although a quick drop tomorrow could break below that, at least it shows that some mysterious funds are willing to support the bottom. Under current quantitative dominance, the biggest risk isn’t a sharp fall but a continuous volume-shrinking decline. When sentiment returns, quantitative strategies can still help push the market up, so sentiment recovery is crucial. If tomorrow’s early trading sees a volume surge and a sharp decline, it could be a good opportunity to buy low and look for rebounds. Conversely, if a recovery and rebound happen in the morning, remember to hold back and avoid chasing. Until sentiment returns, any rebound is a good time to reduce positions.

Overall, the probability of a bottoming and rebound tomorrow is higher. Do you have any good advice for traders? Shantao’s family is currently staying on the sidelines, waiting for the market to break support and then for a violent rebound to consider exiting. For stocks that have just broken their trend, it’s best to run immediately. The risk of trend reversal is much higher than that of long-term declining stocks. As for holding cash or light positions, it’s still too early to enter; wait until the market completes the full process of breaking support, rebounding, and then falling again. After the second wave of decline establishes a bottom and sentiment returns, then consider deploying positions.

(Edited by: Wang Gang HF004)

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