Retail investors and major players are inherently adversaries, which is the most important principle in stock trading, yet many friends just don't understand this principle. These days, I have been continuously providing a risk warning to everyone, which may be the first stock review on the entire internet to give such a warning. Since May, I have been saying this almost every day, hoping to draw everyone's attention. From the trend of the following sector, we can roughly see that the biggest risk in the A-share market is rapidly approaching.
This risk is to be vigilant about the oil, banking, coal, and other large index stock sectors, which are quickly entering a downward channel. These varieties in the A-share market are not just showing signs, but have already entered. Below, I will explain my views through the trend of the oil sector.
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Firstly, taking the daily and weekly trends of the oil sector as examples, I will explain from beginning to end why it is said that the entry of index stocks into a downward channel is the biggest risk in the market.
Firstly, the current major players are still using the old tricks from decades ago in the speculation of the oil index stock sector, only the times have changed.
Looking at the daily trend of the A-share oil index, the starting position of the oil sector on January 23 this year was 914.2 points, and it reached the high point of this rebound on April 19, 1343.47 points, with an overall increase of 47%, forming a double top on the daily line.
I'm not sure if everyone has seen my brief description above? The oil sector started on January 23 this year, and the market started on February 6. This time difference must be highly noted. On February 6, the oil index had already increased by 15%. On February 8, the A-share entered a frenzied rebound. Do you know why this is?
This is not a new technique, nor is it that the stock has fallen too much, and now it is the oil, banking, and other large index stocks that need to rise. These big guys want to rise and sell out, and they must be in a market with a high popularity, fanatical bullish sentiment, and everyone adds fuel to the fire, continuously passing the baton to drive the rise of large index stocks, and the market manipulators can sell out imperceptibly.
This is an extremely old-fashioned strong stock and the past fund's technique. How can we make the market popular? First, it falls deeply, second, the policy saves the market, and third, the market manipulators hype the atmosphere, always bullish, only in this way will retail investors enter and be full of confidence.Secondly, times have changed, and the market no longer recognizes the operations of major forces. What is different this time is that the social security and insurance funds, which have never directly traded face-to-face with retail investors, have directly entered the market to lift the stocks they hold. In the history of A-shares, social security and insurance funds have often sold at the lowest and highest points, leaving the market with a calm and composed demeanor, smiling and full of gains. They can achieve all this because there are a large number of domestic funds that take over the market, which is called value investment. Then, the funds distribute the market chips to retail investors, who buy the chips from the retail merchants - the funds.
However, since 2020, most funds have been trapped in new lithium, photovoltaic, and liquor, and many funds have suffered losses for several years. Now, there are already eight new funds that cannot be issued. In this way, social security and insurance funds have lost the middleman to take over the market and have directly entered the market, facing retail investors directly. Relying solely on the acceptance of retail investors cannot create an atmosphere of a bustling market. At this time, the high-profile bullish sentiment is filled with the market, seeing 3700, 4000 points, a variety of colors.
As a result, the time cycle for this shock and delivery has been extended. A super-strong market that often lies down and earns a lot of money is somewhat caught off guard. Therefore, even if it is difficult to get off the tiger now, it is sheared by the big and small market makers in the field, and can only swallow one's pride.
Secondly, after saying so much, I would like to remind everyone here to pay attention to the biggest risk in the market: the large index stocks entering the down channel! Its impact cannot be ignored.
The decline of large index stocks represented by the oil sector is unbearable for A-shares, because they are the backbone of A-shares. Any one of them can stir the wind and clouds of A-shares and affect the operation of A-shares.
Now, the large index stocks in the A-share market are divided into two categories: one is the heavy positions of social security and insurance, such as oil, banks, coal, and electricity, which are currently in a certain stage.Another is the liquor sector heavily invested by Northbound funds, as well as the new lithium, photovoltaic, and insurance sectors, such as China Duty Free and Longi Green Energy. These stocks have been out for quite some time.
Since the end of January last year, when Northbound funds began to sell off, the stock prices have been halved and then halved again. For example, China Duty Free's stock price plummeted 73% from 237.54 yuan on January 30th last year to 64.83 yuan at yesterday's close, and Longi Green Energy's stock price fell by 71%. Looking at the weekly chart of China Duty Free, it makes one want to cry without tears. Some people love to bottom-fish, but with these kinds of stocks, do you know how many bottoms there are below the bottom?
The area between the two circles in the chart is the range that deceives people into taking over and bottom-fishing. After January 30th last year, the stock began to decline gradually. The current trends of the oil, banking, and coal sectors are all like this, and even the A-share market is the same. This is the biggest risk.
The Northbound funds now hold a large position in CATL and Kweichow Moutai, which have been sold for nearly three years. Since these two are major index stocks in the Shanghai and Shenzhen stock markets, the pace of selling is slower. Coupled with the high stock prices, retail investors do not like or cannot participate, so they are used by the main force to control the index and play against the social security and insurance heavy positions, cooperating with each other to cover up.
In summary, we retail investors should know where the market hotspots and focus are. Here, we also need to correct a misunderstanding of everyone: buying stocks will definitely make money, which is a big mistake. In the stock market, most people lose money, and a few people make money, which is the rule. Because this is a capital market, it is the operation of money. Our retail investors' small capital, once entering the entire capital flow, will be quickly submerged. If you are not calm and do not understand the logic of market operation, losing money is the normal phenomenon, and making money is abnormal.
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