3.5 A roller coaster of twists and turns

Brothers, good evening! [Taogu Ba]

Yesterday I mentioned this, the market isn’t very good

The overall environment is poor, but there are structural opportunities. This phenomenon always exists—niche strategies, niche profit effects. The key difficulty is that some factor causes the original rules to change, which could be due to quantitative strategies or other reasons. In short, the pattern has failed.

If the rhythm is off, the first thing to do is control your positions. Stay calm and avoid making mistakes that lead to further errors.

The principle is simple: after a significant loss, rushing to recover by overtrading and trying to quickly get back to break-even often leads to poor decisions. When market conditions change and you fail to notice in time, or if you forget some important points out of impatience, you tend to repeat the same mistakes. Looking back, you think, “How could I make such a basic mistake?!”

Let me share tomorrow’s approach:

1. The general process these days: oil and gas open with a sharp drop, then tech stocks rally. Outside of the main intraday themes, everything else falls back in the afternoon. Oil and gas then rebound, with some random moves driven by quantitative signals, creating a rollercoaster.

If oil and gas drop at the open due to panic selling and you chase weak recovery tech stocks, it will be uncomfortable…

This week, the intraday main themes have been profitable, such as oil and gas on Monday, power grids on Wednesday, and LEDs on Thursday. Keep an eye on these details.

2. Regarding the indices, they are weak with low volume, not breaking above the 5-day moving average. Tomorrow’s levels are uncertain—could go up or down, with long-term oscillation.

In weak market conditions, avoid taking action in ambiguous positions.

3. The overall structure is quite chaotic; let me highlight a few points:

① Oil and gas, during a divergence phase. If the trend continues, it will be a consolidation with a small group of stocks. As I mentioned yesterday, this is different from Yageo. Influenced by futures, it’s unlikely to form a strong group like Shanhua Intelligent, but also unlikely to move like precious metals directly. These two days, it opened low and then rose, with some funds taking profits but still oscillating. Expect some turbulence, especially over the weekend with uncertain news. Just watch and wait.

② Old hot sectors: optical fiber + tungsten. One word: dull. Today’s broad rally mostly saw declines in these sectors. How to explain? They don’t resonate well together, so participating feels awkward.

Here, the elasticity is weakening. Some core stocks seem to be topping out, like Xianglu and Zhangyuan in tungsten, and Longfei, Tongding, Hang Electric in optical fiber. These stocks are high-priced, with abnormal movements over 30 days, limiting upward potential. If participating, it’s better to do so at high levels with a group, focusing on left-side positions and low buying.

4. Keep an eye on new developments, especially the three stocks I mentioned yesterday.

① Today added an LED stock. The main intraday trend is a one-word direction. Once the direction is set, focus on leading stocks, like Zhaochi and Shun Na today, which guide the LED and electric sectors. First see the one-word move, understand why it’s one word (avoiding wrong direction), then look for arbitrage opportunities in similar stocks. Simple and straightforward.

Sector strength anchor: Zhaochi Co.

Core sector capacity: Sanan Optoelectronics (10cm), Jufei Optoelectronics (20cm)

Tomorrow, if Zhaochi’s 20 billion order after 9:20 and more than three stocks in the sector show a one-word move, it’s within expectations. It’s better than today—try to find some contrast between weak and strong stocks, with logical and popular stocks involved.

② Power sector: Today Hanlan, if not bidding aggressively, will be hard to buy. Relying on stubbornness today was risky; tomorrow, it’s better to avoid chasing highs. Look for core stocks like Hanlan at intraday lows for the second or third wave, but watch out for resistance levels.

③ Storage: a trend-based play, separate from thematic stocks. A more romantic approach is to compare it to the previous optical fiber sector.

Baiwei Storage, Demingli, Jiangbolong

④ Domestic computing power: feeling weak, observe first, wait for unexpected opportunities later.

Chuanrun, Huasheng

5. Today’s top stocks hit a limit and were suppressed to the second board. The next cycle’s new leaders are likely to come from this group. Tomorrow’s first and second or second and third stocks can be actively tried.

In the bottom left corner of the article, seven coupons—let’s work together to use them.

Thanks for your support, brothers!

This article is for personal review only and does not constitute investment advice. Investing involves risks; please proceed cautiously.