Which is better, high volume or a sharp rise? Which is more important to the market?
On Wednesday, the combined turnover of the two markets was 1.16 trillion yuan, 20% more than the previous trading day, nearly doubling the previous volume. However, the most concerning issue for everyone was the index's rise and fall. It seemed that 3,000 points were almost within reach, but in the end, the market painfully lost 2,900 points. Some people joked that the 1.5-day bull market experience card has come to an end.
In fact, we need to understand which is more important: high volume or a sharp rise?
I believe that volume is more important than a sharp rise. Why? The core issue of A-shares is not a sharp rise but a lack of money. People used to worry that there wasn't enough money, and they were unwilling to enter the market. Now, consider that the sudden increase in turnover to 1.16 trillion yuan indicates that money has arrived! With money, many things can be done, which is what veteran investors often say, "Volume precedes price."
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In the adult world, we should have both: a sharp rise and high volume. Of course, it's even better if they occur simultaneously. However, as long as there isn't a huge volume at a high level, the market trend is basically sustainable. For example, such a low-level high volume turnover, like a fishing line, indicates that it's time to increase positions.
In the evening, we also discussed two topics: one was my calculation of the market's target, and the second was the direction.
When it was about to break below 2,700 points, I clearly pointed out that 2,700 should be broken early and quickly to have a chance. I started to bottom fish relatively early, so being one step ahead is a martyr, and being half a step ahead is advanced. According to the normal oversold level, it generally does not exceed 5%, so you can calculate that basically 150 points are enough.
However, I repeatedly emphasized in the previous content that if there is policy support, the policy is not simply to stimulate the stock market but mainly to stimulate our economy, then you cannot simply measure it with oversold. Currently, our policy is not very clear, but the policy to stimulate the stock market is very clear. In this way, you can calculate that in the medium term, there is an increase in policy or funds, from 5% to 10%, which is basically not a high requirement. You can calculate that 3,000 points is the minimum.
If there is policy cooperation, especially economic stimulus policies, then 3,000 points is the bottom line. Without this cooperation, 3,000 points may still be a mountain because large funds are still unwilling to continue buying. Is there any? On Wednesday morning, there were rumors that this policy might be introduced during the National Day holiday, so let's wait and see. In addition, the trillion funds were traded around 2,900 points, so think about it, even if it rises to 3,000 points, it only rises by 3%, and the selling pressure is not actually high. Therefore, I personally believe that in the short term, there is no need to consider the overall trend at all, and it is more important to consider fluctuations and the direction we should focus on.Where are the opportunities and directions?
Securities firms, fintech, and real estate are the directions that have been stimulated by recent policies and are also the directions with the highest increases. There was some divergence on Wednesday, and I believe that capital is clustering within these areas. It is unlikely to end in the short term because a lot of money is involved. This situation reflects more opportunities for fluctuations. On Thursday morning, for example, most securities firms followed a fishing line pattern on Wednesday, making Thursday morning an opportunity.

In terms of the direction of mid-term incremental capital, in addition to high-dividend, high-quality companies, foreign capital may be more inclined towards technology and areas that policies may stimulate, such as consumption, duty-free, and tourism. Foreign investors particularly enjoy these areas. Personally, I pay more attention to state-owned enterprise (SOE) reforms. I believe that the SOE reform theme has a deep capacity and is not excessively overheated. It also aligns with the current situation where, in the absence of fundamental analysis, people are paying more attention to thematic investments. This is a big context. Okay, this is for your reference.