Monday, September 7 Outlook

First, picture three scenes. Scene One: On Friday, the Y-sector stocks surged to exhaustion—yet the Shanghai Composite Index still closed in the red. Even the market’s defensive forces couldn’t hold it up; if that’s the case, just imagine how badly the leading tech stocks must have been hammered. Scene Two: Guofang Group—the highest-consecutive-day涨停 stock market-wide—opened straight into a limit-down halt. Meanwhile, within that same minute, Chutian and Gaozheng boldly pushed upward toward their own limit-ups. Scene Three: Haiou Co., Ltd. precisely edged its price two cents below the daily limit-up threshold—successfully skirting the red line. One side was smashed to the floor; the other soared to the ceiling. That was Friday. And Friday’s overall market action can be summed up in one sentence: A weak recovery turned into a sharp divergence. The moment pre-market bidding ended Friday morning, the market’s character was sealed: weak recovery. The rationale was straightforward—the leadership didn’t come from Jinjian, the strongest performer the prior day; moreover, Guofang—the highest-consecutive-day涨停 stock—was immediately slammed into limit-down. Yet Chutian and Gaozheng held firm, barely sustaining the premise of a weak recovery. Indeed, the morning unfolded exactly as scripted: earlier battered stocks like Shenzhong, Chuanshi, Aili, and Yiming merely passively rebounded alongside the broader market. The sole discipline of a weak recovery is simple: shed the weak, retain the strong. Selling any weak holding—regardless of price—was the right move. Then the script derailed. Conventional expectation held that big-tech stocks would merely oscillate this week; after all, U.S. equities rallied strongly on Thursday—so at most, Friday should have seen a gap-up followed by a gradual decline. Instead, the sell-off intensified sharply and brutally in the final minutes, dragging market sentiment straight into the ditch. Seeing the shift in momentum, liquidity-focused funds swiftly pivoted en masse into defensive pork-related stocks. As these safe-haven sectors surged, sentiment received a second death sentence: those wanting to sell couldn’t stop the slide; those hoping to buy dared not step in. Thus, cries of “tide receding” echoed everywhere. But if this truly were a tide receding, Friday’s count of high-flying stocks hitting limit-down would have been far higher; the limit-down order volumes would have been heavier; and far fewer counter-trend survivors would have remained. Haiou successfully skirted the red line; Chutian ignited a string of “Long-” prefixed stocks; Gaozheng maintained unshaken strength; Wanxiang and Jierong both stayed alive; and Jinjian never once touched a single limit-down all day. This isn’t the look of a receding tide—it’s divergence, classic of a chaotic, transitional phase. Now consider the ChiNext Index. Big-tech’s near-term fate hinges entirely on ChiNext’s performance—optical modules, optical communications, and other heavyweight components are largely concentrated there. Since July, ChiNext has traced a textbook three-wave downward pattern: first, a one-month decline (Wave A); then a rebound (Wave B); now entering the final leg (Wave C). Crucially, Wave B’s rebound level matters greatly: if the prior 100-point drop only recovered 38 points, that’s the weakest-tier rebound; recovering half qualifies as normal; recovering 60% counts as strong. This time, the market chose the weakest tier. Such a feeble rebound inevitably gives way to further decline—the ongoing Wave C. Wave C itself subdivides further. We’re currently in its first sub-leg—and a corrective rebound sub-leg must follow. If that rebound clears Wave B’s peak, the entire downward structure requires re-evaluation; if it fails, a third sub-leg of decline remains ahead. Only after completing that final leg will big-tech’s correction be fully exhausted. In the short term, watch for one thing only: when this rebound sub-leg begins. Timing also works out conveniently: U.S. markets rose Friday but close Monday for a holiday, resuming only Tuesday evening. So Monday’s rally—and the overnight period following—won’t be subject to external pressure. We’ll enjoy two full days of autonomous market operation. Passing up such a gift would be indefensible. Monday will likely open high—but trend lower through the day. The real intrigue lies *after* that decline: if buyers step in decisively and volume expands meaningfully, a large-volume bullish candle may emerge—potentially stabilizing the broader market. Stocks rise for only two reasons: either sentiment heats up—or prices become cheap.

Fang Xinxia’s Pre-Market Commentary, April 8: Ceasefire and Recovery

- Sentiment Stocks Set the Tone - Target consecutive-limit-up stocks and key sentiment names: Yangtze Optical Fiber & Cable: Entering its primary uptrend. - Pre-Market Trading Strategy - Unexpected ceasefire negotiations between the U.S. and Iran have shifted the conflict into a diplomatic phase—its market impact is now fading. Today’s market expects continued recovery; trading volume will determine both the strength and sustainability of that recovery. At around RMB 1.6 trillion in daily turnover, the market can only sustain narrow, concentrated rallies—leading to accelerated sector rotation. Today, watch whether volume breaks above RMB 2 trillion: volume is essential for any meaningful rally. - Heat Analysis - 1. Computing Hardware (Domestic Substitution): This sector is now extremely crowded—especially among industry leaders—where institutional funds dominate, treating it as a “safe harbor” amid market volatility. As soon as any hint of recovery emerges, these names lead the charge—three reasons make them easy to remember: First, stable earnings—virtually zero risk of earnings surprises, giving institutions peace of mind; second, low participation from retail investors and speculators—tight, concentrated shareholding makes them resistant to emotional swings; third, clear long-term trends—domestic substitution remains a hard, structural theme. So for current risk-aversion, prioritize these names—stability first. 2. Token Economy (Model + Compute Power): Entirely different from computing hardware, this group is driven mainly by speculators and quant funds—purely speculative. Its motto is simple: “Watch closely on sharp drops—but don’t chase rallies.” Recent moves in data center and compute-power leasing sub-sectors vividly illustrate this style: they hold up relatively well during declines, yet tend to peak and reverse quickly on rallies. Therefore, when participating, carefully assess each individual stock’s situation, enforce strict risk controls, and trade fast—never adopt a long-hold mindset, or you’ll easily get trapped.

Morning Bid: Markets Cling On as Ceasefire Tested

May 7, 2026

Global markets held steady despite US-Iran tensions pushing oil to $101 per barrel. Toyota warned of profit declines due to supply uncertainties, while Asian chipmakers led weekly gains.

reuters

2026-05-07

Morning Bid: Markets Cling On as Ceasefire Tested

Morning Bid: Markets Cling On as Ceasefire Tested

FAQ