Weekend A-Share News: Policy Bull Market Depends on Fate

Longing for a bull market, longing for stock prices to soar, and longing for a better future life is the vision of every investor when entering the market, but reality is not always like that! Take last week as an example, on the surface, after the market bottomed out on Friday and rebounded sharply, as shown in the figure below, the Shanghai Composite Index's weekly K-line also rose by 1.36%, and the All-A Index rose by 3.3%. However, due to the market not rising in a linear fashion, some people who think they are clever may not even be able to outperform the overall market after a few rounds of trading.

But this is the normal market condition. A bull market is also similar, with significant differences between ups and downs and the experience of retail investors. It's just that the probability of making a lot of money is increased. The market will always follow the normal distribution of seven losses, two breaks even, and one profit. I hope all investors can clearly position themselves to avoid being hit left and right by being overly ambitious.

Let's first take you through the weekend's news. Dear friends, remember to give a thumbs up before reading slowly~

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News 1: The first phase of 300 billion yuan of repurchase and increase in loans has entered the implementation stage, with the first batch of 20 companies, including China Merchants Shekou and Muyuan, having been disclosed.

The news is slightly positive. The market suddenly turned up last Friday, which is related to this news. At the last central bank meeting, the 300 billion yuan increase in loans and the 500 billion yuan swap facility were innovations specifically for the stock market. Compared with the real estate repurchase loans, the support from the higher-ups for the stock market is obviously much greater. The policy signal is certain and helps the stock market to be stable and rise in the long term.

However, it will also lead to another problem. The leverage of Huijin Company and major shareholders of listed companies will inevitably accelerate the de-retailization of A-shares. Whose feast this is, it's still uncertain!

News 2: The quantitative giant Huanfang announced the abandonment of the neutral strategy.

The news is neutral. Huanfang was once the leader of quantitative funds. This time, giving up the hedging strategy series of products also confirms my previous judgment about the significant change in A-share style. Now, the phenomenon of stocks rising and falling together is more severe, and the alpha characteristics of individual stocks are much weaker than the beta characteristics. How to play the stock market in the future, perhaps institutions and retail investors are on the same starting line until the day when A-shares begin to normalize. Considering the current excellent liquidity in the market, it is appropriate to be neutral towards the overall market and the market.

News 3: Next week, international events are surging. On Tuesday, October 22, the Kazan BRICS summit will be held, and the market is highly concerned about cross-border payments. On Wednesday and Thursday, there will be a series of high-level forums on space-based internet and economic provision, focusing on the direction of military industry and low-altitude, etc. In addition, Monday's LPR quote and the show of the old man and Harris in the United States will also affect A-shares.

The news is neutral, the market liquidity is good, and event-driven may have more explosiveness and sustainability.Overall, the weekend's news is generally seen as good news being realized, and the market sentiment is quite positive. Therefore, be cautious of a rapid rise and fall in the index. Against the backdrop of good liquidity and clear hot spots, the atmosphere for speculation may become increasingly better.

Regarding the broad market and hot spots:

Below is the weekly K-line of the broad market, as shown in the figure. After the single bottom probe last week, the market is likely to continue to rise rapidly. In the short term, attention should be paid to whether there will be a rise and fall near the 3336 points of the weekly K-line. This is consistent with our judgment last week that the broad market will fluctuate in the range of 3100 to 3300, with an amplitude of 2 points up and down, that is, it is highly probable to fluctuate in the range of 3038 to 3366.

In terms of direction, technology restructuring + independent control has become the strongest headwind in the current market, with Huawei's HiSilicon being the most representative. In addition, large finance represented by securities firms and central enterprise reform represented by Chinese characters are also the other two main lines of this round of rebound.