The recent US stock market performance has been almost like it's on steroids—six out of seven trading days have been up, and the trend is almost exaggeratedly strong. News from the Fed suggests there's now an 87% probability of a 25 basis point rate cut on December 10, and they're preparing to end balance sheet reduction as well, which means a wave of liquidity is about to hit. With these moves, the Asia-Pacific markets are likely to get excited too.

In contrast, the A-shares have posted two consecutive down days, with the Shanghai Composite dropping 36 points from its rebound high. But don’t panic—since April we haven’t really seen three straight daily declines, and this looks like an obvious shakeout. After this oversold phase and the usual weak open in the morning, there’s a good chance of a rebound later in the day.

Interestingly, both J.P. Morgan and UBS released bullish reports on A-shares almost simultaneously. One upgraded its rating from neutral to overweight, and the other raised next year’s earnings growth forecast from 6% to 8%. This shift in attitude from foreign investors definitely means something.

As December approaches year-end, funds do tend to get more cautious, so a weaker index is normal. But if overseas markets really take off, it will definitely act as a catalyst for us as well. The likelihood of a domestic rate cut early next year is also rising, so keep an eye on that expectation.

In terms of sectors, high-tech and traditional strong industries are the two main lines. The leading superhard materials stock soared 15.37% in a single day, while power, chemicals, and rare earths all rallied against the trend. The leading commercial space stocks with consecutive limit-ups still have plenty of room for imagination. Every major drop is actually a buying opportunity—this may sound clichéd, but the logic hasn’t changed.

The support from the May moving average has been solid, external geopolitical tensions are easing, and domestic data remains steady with some progress. The chances of a second bottom are low; the index is likely to consolidate around the moving average. Be patient—don’t rush.