March 25 Review Notes

Today, the index is fluctuating normally upward because crude oil prices dropped significantly last night, leading to continued recovery in Asian markets including Japan and South Korea today. When oil rises, stocks fall; when oil falls, stocks rise. Recently, there have been constant news updates from the US, with ongoing boasts about negotiations and progress, while Iran keeps denying these claims. The latest news today is that Iran is still firing missiles at the US Lincoln ship. It seems that these actions are not exactly easing the situation. However, Brent crude oil has indeed fallen, which is a fact. Currently, crude oil is fluctuating between 95 and 100. As long as it stays within this range, the stock market is likely to continue recovering. So in the short term, let’s watch the gap above the main A-shares before they fully recover.

Additionally, regarding trading volume, today’s volume was less than 2.2 trillion yuan. Although it increased by 100 billion compared to yesterday, I still think this volume is insufficient; it’s still shrinking. This indicates that outside funds remain mostly on the sidelines, with fewer entering the market, especially since the Middle East situation hasn’t truly stabilized yet.

Currently, the US and Iran are still engaged, mainly trying to gain more leverage for future negotiations. As for the actual number of ships passing through the Strait of Hormuz in recent days, it remains very low—only a few ships sporadically. The actual shipping volume is still less than 10% of normal levels, meaning the strait remains essentially blocked. No matter what the news says, everyone should focus on the actual situation. Words can be spoken easily, but only when the number of ships begins to increase significantly can it indicate a real easing of tensions. Until then, the traffic volume remains low, and the market will continue to fluctuate based on news, dominated by short-term sentiment.

In this kind of market, I recommend not taking large positions. Whether you hold crude oil or non-oil sectors—mainly non-oil referring to metals and technology stocks—since these tend to move inversely to oil. Regardless of what you hold, you should consider selling high and buying low, because in a volatile market with daily news, yesterday’s limit-up crude oil stocks can be hit with limit-down today. The indices and stocks that surged today might be sharply down tomorrow due to a statement from some analyst or politician, causing oil to rally again. These are the realities right now.

Therefore, I personally think the best approach now is to keep some cash on hand, waiting for significant drops in oil and non-oil sectors. For example, today crude oil stocks hit the limit-down while non-oil stocks surged. You should reduce your holdings in the profitable non-oil stocks and buy some crude oil stocks at lower prices, engaging in high-low trading between these sectors. Since the market fluctuates daily with news, and the index has rebounded for two days while oil has fallen for two days and is now between 95 and 100, a single piece of news could drastically change the situation.

Whether you hold oil or non-oil stocks, it’s suitable to adopt a high-low trading strategy now. If you prefer not to buy oil because you think it’s risky at high levels, you can wait for your stocks to rebound, then sell high. Currently, the index is at 3931, a very awkward middle position. After a rebound, you can reduce positions at higher points and keep some cash. If oil suddenly surges the next day, causing non-oil stocks to fall sharply, you can buy in stages at lower prices. This is a low-risk approach for those who don’t want to hold oil stocks.

The market has over 5,000 stocks, with about 3,000 showing both red and green during trading. The simplest T+0 trading method is to sell red and buy green, and there’s no need to worry about missing the top because the Middle East situation isn’t fully resolved. You can’t expect the main A-share index to break through 4,200 points and start a major bull run independent of the global stock markets—that’s unlikely. Similarly, after a rebound, the market will continue to pull back.

Of course, the personal advice I shared above is for reference only. Everyone can make their own decisions and doesn’t need to follow what I say.