April 26, 2024 morning trading strategy: It is recommended to control your position.

Yesterday, the index continued to rise, with nearly 3,000 stocks advancing and over 60 hitting the daily limit-up. It seemed lively, but honestly, the 赚钱效应 (profit-making effect) was very poor.

This April has been hellishly difficult for most retail investors. The index only rose for three days, and the rest of the time was spent adjusting.

We thought the market was a seesaw, but it turned out to be a ceiling fan. Neither the tech sector nor flying cars showed good continuity yesterday. Instead, odd themes like phosphorous chemicals, chemical materials, and weight-loss drugs rose.

Will these have continuity? Most likely not. So, it's best to step back! The profits from these trades will likely be cashed out, and the question is where the money will flow next. Currently, two directions are favored by capital:

1. Low-altitude economy, 2. Big tech. The safe-haven direction is mainly: secondary new shares.

The only highlight yesterday was the total short-seller "ST 宁科" (ST Ningke), which rebounded sharply in the afternoon. Also, the A-share halt leader 春光 K 技 (Chunguang K Tech) rebounded, proving that the negative feedback has mostly been released.

This signals that the downturn in April is basically over, and the market is entering a new cycle.

In summary, we are more optimistic about the new cycle. If you believe in cycles, now is the time to gradually enter the market. At this juncture, the 共振 (resonance) is with the "low-altitude economy" and AI.

Today, note that the three major U.S. indices closed lower last night.

On one hand, U.S. GDP fell short of expectations; on the other, unemployment claims dropped, and the price index rose, indicating inflation is picking up. As a result, the Fed delayed rate cuts again, with bond traders pushing the first expected cut to December.

But after these U.S. data releases, the dollar index plunged, the RMB appreciated against the dollar, and gold and non-ferrous metals rebounded, showing the market doesn’t believe the data.

For today, there’s still selling pressure, and the weekend will see a wave of 上市公司业绩暴雷 (earnings bombs). But with financial stocks like 券商 (brokers) supporting the market and tech stocks active, at least the 大盘指数 (broad index) is safe. The focus remains on 个股 (individual stocks).

So, until U.S. debt is sold, inflation will artificially rise. If a major country buys U.S. debt, the data could flip overnight, and rate cuts could follow. But is that likely? It’s a game of endurance.

In short, you can 埋伏 (position) before the holiday, but control your 仓位 (position size). Avoid stocks with 暴雷 (bomb) risks and focus on those with disclosed annual/Q1 reports to minimize risk.

Now, let’s look at themes and stocks:

1. Big tech (AI)
Yesterday, Beijing released the "Beijing Computing Infrastructure Construction Implementation Plan (2024-2027)", outlining goals like achieving full-stack autonomy in AI infrastructure by 2027.

It promotes 适配 (adaptation) between AI models and domestic chips, offering subsidies for companies 采购 (procuring) domestic GPUs.

But last night, Tesla rose ~5%, Nvidia over 3%, Snap surged 30% after-hours, and Google over 15%. Today, A-share tech stocks should react.

These plans are bullish, but the market is weak. Good news used to last days; now it’s minutes. Still, post-earnings season, tech could rebound.

CPO leaders stabilized after rebounding. Beaten-down stocks with catalysts and high 辨识度 (recognition) have room to 反弹 (rebound). Watch closely.

2. Brokers
Post-market, the State Council released a report on financial SOE reforms, aiming to build a "national team" of world-class 金融企业 (financial firms).

国联证券 (Guolian Securities) announced plans to acquire 民生证券 (Minsheng Securities) via share issuance, aligning with the "national team" theme.

With Guolian halting trading, watch for a wave of 券商 (broker) M&A.

3. Secondary new shares
The new "国九条" (National Nine Articles) 利好 (benefits) secondary new shares and earnings growth. Recently, they’ve been 活跃 (active).

Weak markets favor 次新 (secondary new shares) + earnings plays. With 轮动 (rotation) and no breakout, they’re a go-to.

Recall last October when 大盘 (the index) broke 3000, "天元智能" (Tianyuan Intelligence) tripled, and 新股 (new shares) surged before the market rallied for two months.