Some reach new highs, some break even, and others still incur losses. Revealing market pain points and subsequent reflections!

Throughout the long history of trading, all setbacks are eventually covered by an ever-rising curve. Today’s close feels like a relief—on one hand, the market has clearly shown signs of stabilization: the Shanghai Composite rose 1.3%, directly returning to 3,900 points; the ChiNext gained over 2%, staying strong all day without the previous repeated dives; the entire market is exhilarating: over 4,800 stocks rose, with very few declining; total market turnover reached 2.18 trillion yuan, with a volume of 970 billion, and domestic institutional net buying was 21.48 billion, finally not just retail investors holding the line. [Taoguba]
On the news front, various positive signals have finally encouraged funds to step in and take profits. Additionally, I’ve received many thank-you messages from J粉 friends, and some are “showing muscle” in the comments, which gives me a sense of relief—allowing me to sleep peacefully at night. Today’s experience reminds me that trading, like life, has no fixed rules. What helps you reach new highs? Persistence + effort. Doing something is always better than doing nothing; starting is better than giving up. When the market was turbulent before, I kept telling everyone to persist in learning and working hard—only by doing so, when the land is full of gold, can you outperform everyone else. Reflecting on the darkest moments after returning from the carnival, a single strike in March broke through the gates of heaven. Some say to keep doing it; others say to stop. I just want to work hard and sincerely make myself stronger, and help my followers become better. May those with fate understand this!!!

These past two days, the market has performed so well, so don’t be stingy—get those data up, especially those who usually enjoy free rides every day. The backend actually has data on who’s freeloading the most. I won’t point it out specifically, but let’s give the posts some encouragement—like, click likes, and help with tips!!!

Today, I want to share some thoughts on position management. Many friends have seen the idea that the more the market rebounds, the more they should reduce their positions—that’s correct, and I mentioned it last night. But I want to go further: “Objective analysis, flexible adaptation.” The so-called oversold rebound, where the more it rebounds, the more you reduce, is generally correct in direction. But how can you maximize your trading? This requires “objective analysis and flexible adaptation.” For example, on Monday’s close, if everyone heavily bought in (the methodology for heavy buying and stock selection has been shared before), and on Tuesday, the market shows a volume-less rebound, it’s indeed wise to consider reducing positions, because the market’s expectation for Tuesday is a volume-constrained broad rise, which often peaks the next day. However, looking at today’s facts: after half an hour of trading, the market gradually increased volume. Using the “Four-Dimensional Price-Volume” Law, what conditions did today’s market meet?
1) High-level stocks performing well: met
2) Market starting to increase volume: met
3) Support for emotional continuation: met
4) High-level stocks performing well again: met
Our entry standard is generally set to three conditions being met, indicating low market risk. Today, it’s still possible to participate, but considering it’s the second day of the rebound, a divergence tomorrow is highly likely. So, with volume support, there’s no need to be completely out of the market—slightly reduce positions or even maintain Tuesday’s positions. When selecting stocks, focus on those with strong market consensus or intense betting expectations.

Since I mentioned focusing, how to focus? Many teachers talk about focusing on core stocks, but it often leaves people confused. Today, I’ll share how to focus.
1) Today, most friends saw Aoruite opening a one-word board and then choosing Meiliyun, which shifted from weak to strong. What exactly went wrong?
From the rebound rhythm, almost all core stocks rebound on the first day, so regardless of which core sector you choose, there’s little negative feedback. Some pick storage chips, others pick optical fibers, aerospace, power-related stocks, etc. As long as it’s a hot sector’s core stock, it’s relatively safe. That’s why, during Monday’s big drop, smart funds heavily bought in, expecting a broad rebound on Tuesday. When the next day’s rebound occurs, it’s time to focus. Not every sector can sustain the rally, so once the strength of a core sector is clear, consider taking profits.

Looking at today’s bidding, after 9:20, only two directions kept strengthening: optical fiber and power. Power was a strong sector yesterday, so its strengthening is expected. To extend the game, intra-day convertible bonds in energy-saving wind power can reduce the risk of sharp rises and falls. Optical fiber, which continued to strengthen after the open, indicates that if the market’s strongest sector peaks and then declines, choosing the second-strong sector—like computing power—may also face a similar risk of peaking and retreating. In other words, if the market’s top sectors aren’t very strong, the second-tier sectors’ expectations will also decline significantly. Given the anticipated market divergence tomorrow, if a stock hits the limit-up but doesn’t lock in the top, it might be time to consider unfollowing. This is one way to focus.

2) How to determine that focusing on optical fiber is stronger than computing power? Let’s look at the charts:

Chart 1: Optical fiber, characterized by not filling the gap from yesterday’s decline, and today’s gap-up opening directly fills the gap.
Chart 2: Computing power, characterized by not filling the gap yesterday, but filling it during the day with an upward move.
Chart 3: Power, characterized by filling the gap yesterday.
From these features: optical fiber filled the gap with a gap-up open today, showing stronger momentum. Computing power didn’t fill the gap at open but did so during the day. Therefore, optical fiber is more robust. If you want to enter today, focus on power and optical fiber sectors, preferably low positions or convertible bonds for entries; the leading stocks in optical fiber are mostly well-known, so focus on those.

That’s the summary and reflection on today’s market. Why, after the same rebound over two days, some have already hit new highs, some haven’t recovered their costs, and others are still losing money—this is a matter of position management and rhythm control. If you haven’t hit new highs or are still losing money, consider paying close attention to me. You’ll see some public comments in the comment area, helping you keep the rhythm and avoid missing opportunities.

Market rhythm tips:
Ordinary friends, please keep a calm mindset. Whether your account is red or green these days, it’s a fact. The broad rebound phase has officially ended. Starting tomorrow, be cautious with your trades.

Today’s market rebound was sincere. Based on the “Thinking-Volume-Price” law’s four key elements—volume, price behavior, capital flow, and public expectation—none are fake. Behind this genuine rebound, there are two key signals: first, the market’s height has not yet peaked, and there’s room for filling gaps; second, the market’s capacity to absorb divergence is strong—any selling pressure will be met with active support. But since the market has risen for two days, it’s likely to see a pullback tomorrow. If it continues to rise intraday, remember not to chase high; if you hold stocks that haven’t shown strong signals, consider taking profits at the high. If a rare decline occurs, don’t panic—there’s enough support below, and a pullback is likely, providing a good opportunity to buy low. Pay attention to rhythm.

On the thematic front, as mentioned, the strongest sectors are power and optical fiber, which have different attributes and require different strategies.

Optical fiber, as a core branch of tech, mainly trends. Longfei Optical Fiber hit two consecutive limit-ups, establishing sector recognition. But tech stocks tend not to chase after big gains, especially after continuous rises, due to high risk of catching a falling knife. The prudent approach is to wait patiently for a pullback or divergence, then buy low to continue the trend, rather than blindly chasing after consecutive limit-ups.

The power sector is the current emotional core. China Power Liao Energy’s 8 consecutive limit-ups have set a high, likely to drive short-term momentum. The sector is deeply tied to market sentiment. If you observe during the afternoon, when the index stabilizes, the yellow line representing sentiment doesn’t strengthen simultaneously—this divergence signals concern among funds, who are wary of tomorrow’s sentiment divergence. Therefore, power sector trading should follow the “focus on the two ends” principle.

“Highest” refers to the high-position leaders—though their stocks continue to ferment, showing recognition of their high levels, after 8 limit-ups, regulatory risks increase. It’s not advisable to participate in high-level continuation trades due to low cost-effectiveness. “Lowest” focuses on first-limit-up stocks and those with one-in-two patterns. Today’s first-limit-up stocks are mostly concept-driven or weak stocks relying on names, with poor quality—no need to follow. Tomorrow, prioritize first-limit-up power stocks, especially those with high turnover, since limit-up leaders are often those with high turnover. Low-volume continuation carries high risk. Also, wait for significant market divergence to do contrarian trades, exploiting the recovery of sentiment for arbitrage.

Finally, a reminder: after the broad rebound phase ends, the market will shift back to sector rotation. Don’t blindly hold large positions—consider switching to half positions, strictly follow discipline, and only then can you steadily profit and protect your gains!

Thanks to the friends who support with tips:
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