The index continues its rebound—will tomorrow’s divergence present an opportunity or a trap? Has the market reversal already arrived? Unveiling the resource stocks’ 'golden pit' and the high-flying stocks’ 'gentle trap'; the sole dominant theme amid this market reversal—don’t surrender your chips just before dawn!

Evidence Two: The relationship between the U.S. dollar and A-shares. Previously, whenever the U.S. Dollar Index rose, A-shares inevitably plunged the next day. For example, on March 18, the dollar rose 0.5%, and A-shares fell 1.39% the following day; on March 20, the dollar rose 0.4%, and A-shares tumbled 3.63% the next day. Yet yesterday, the dollar rose again by 0.5%—did A-shares fall today? No! This reflects the market’s desensitization to the 'dollar strength' negative catalyst. Evidence Three: Gold’s price movement. Logically, when the dollar rises, gold should fall. Yet today, Shanghai gold surged 3.46%—another clear sign of desensitization. This desensitization stems from the market’s realization that even amid ongoing geopolitical tensions and adverse news, it no longer panics and sells off indiscriminately. The U.S., aiming to safeguard its capital markets, has been continuously signaling de-escalation (though Iran remains unmoved); meanwhile, A-shares have grown accustomed to this strategic tug-of-war and are no longer easily derailed. Thus, I divide this reversal into three phases: Phase One (now): Bad news = good news. Retail investors panic and sell upon hearing negative headlines, while institutions—recognizing the market’s desensitization—step in to absorb those ‘blood-stained’ shares dumped by retail. This is the consolidation-and-accumulation phase—sideways trading as institutions build positions. Phase Two: Retail investors gradually grow numb to bad news and adapt to market volatility. Phase Three: The market breaks out on strong volume—the main upward wave begins. The deeply oversold, low-priced shares you hold now are precisely what institutions are seeking—so don’t relinquish them just before dawn. Also, as mentioned yesterday, consider major shareholders. Many first-tier market shareholders possess far greater financial clout than retail traders or even institutional players. After all, the capital market boils down to a relationship between shares and money: if you hold massive quantities of shares and choose to sell, the question becomes whether counterparties’ capital can absorb the supply. If they can, the stock rallies; if not, it collapses—that’s all there is to it. Hence, these large first-tier shareholders—holding substantial share blocks—are currently executing large-scale acquisitions. Take Xiamen Tungsten, for instance: its acquisition of two resource firms signals long-term confidence. Though spot resource prices have recently corrected, they remain far from low—so launching acquisitions at this level implies bullish expectations extending well into the future. The same applies to Zijin Mining. For institutions, once major shareholders set a clear directional signal, they gain the confidence to act decisively. Institutions fear short time horizons—not long ones; brevity hampers deep positioning and coordinated ramping/distribution, whereas extended timelines support both. So, where does the market stand right now? I’m not sure how others view it—but my stance is unequivocal: this rally marks a genuine reversal. That said, reversal doesn’t mean uninterrupted bullish candles. There may be twists—e.g., two days up followed by a pullback—but the underlying trend remains intact: the second leg of the bull market has begun, and nothing will derail that conviction. Numerous sectors are already exhibiting early signs of this second-leg launch. Whether you seize the opportunity depends entirely on your own readiness. 2. Market bottoms typically form in two ways: 1. Index bottoms first, then thematic leadership emerges: All sectors decline until exhaustion, after which state-backed entities step in—lifting brokerages to ignite broad-based optimism among retail investors, who perceive the level as ideal for bottom-fishing. This triggers a broad-based rally; only afterward do sectors begin to diverge, themes emerge, and a dominant narrative crystallizes. Such a pattern requires immediate, strong volume. 2. Thematic leadership emerges first, then the broader index reverses: While the index declines, counter-cyclical themes quietly strengthen—delivering tangible gains to early participants (e.g., the current power sector). Once the index finally bottoms, these counter-cyclical themes transition into pro-cyclical drivers—and the full market reversal takes hold.

Moody’s downgraded the U.S. credit rating—what impact does this have on stock market direction?

Hello everyone, I’m Hairong Jun. After Friday’s close, the Nasdaq-100 Index plunged 1.32%, Tesla dropped 2.81%, and NVIDIA fell 2.44%, while gold rose 0.94%. The primary trigger was Moody’s sudden downgrade of the U.S. sovereign credit rating. Its rationale: projected expansion of the U.S. federal deficit into uncharted territory—reaching nearly 9% of GDP by 2035, up from 6.4% in 2024. This marks the third time a rating agency has downgraded the U.S.; historically, such downgrades triggered market corrections lasting two to three months. Normally, with such heavy debt burdens, fiscal prudence would be paramount. Indeed, earlier U.S. initiatives—including the tariff war and Elon Musk’s newly formed ‘Department of Government Efficiency’—were aimed at cost containment. The U.S. tariff war, for instance, is expected to generate $100 billion annually in revenue. Yet Trump recently advanced a sweeping budget bill—the ‘Beautiful Big Bill’—through Congress. Combining tax cuts, immigration reform, and domestic priority measures into a single, coordinated package, it aims for presidential signature by July 4. Independent analyses estimate this bill will add $3.7 trillion to the U.S. deficit over the next decade. In short, Trump’s entire effort hasn’t reduced deficits—it has massively expanded them. U.S. government spending translates directly into corporate revenues elsewhere. Markets actually favor deficits—partly explaining why U.S. equities have remained resilient lately. Another notable development: China continued reducing its U.S. Treasury holdings in March. Meanwhile, the U.K.’s U.S. Treasury holdings have now surpassed China’s, making it the second-largest foreign holder—Japan remains the largest. This shift indirectly supports gold. Other updates: 1. Tesla unveiled further details on its new products: Robotaxi remains on track for a June launch, initially limited to invited participants with a fleet of 10–20 vehicles. Optimus robot production capacity currently stands at 1,000 units per month; Tesla plans to open its manufacturing process to investor visits starting in Q4.

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