Fighting again

Conflict has erupted again in the Middle East, directly roiling the commodity markets! International crude oil futures surged sharply last night, with Brent crude skyrocketing over 7%. In contrast, gold and silver futures experienced a sharp sell-off.

For the A-share market, this is positive for: oil & gas, chemicals, and coal sectors which directly benefit and are currently in the spotlight. However, the gold and non-ferrous metals sectors are under pressure, representing a negative direction.

Yesterday's A-share market performance was truly frustrating. The Shanghai Composite Index fell 0.49%, the Shenzhen Component Index dropped 1.87%, and the ChiNext Index plunged 1.7%. Nearly 3,800 stocks across the board closed lower, with the median stock price change falling a full 1.4%. Over 700 stocks declined more than 5%.

The combined trading volume for the two markets was 2.58 trillion yuan, 14 billion less than the previous day. It's clear that most investors are now lying flat, adopting a wait-and-see approach. This is understandable. The market has been weak recently, with nearly 4,000 stocks in the red almost every day. Repeated sell-offs have rattled everyone's confidence, making them hesitant to act.

I just saw an old joke that perfectly fits the current stock market, and it hits hard: Someone asked, why are old eunuchs richer than young eunuchs? The answer is simple: because they got castrated earlier.

While it's a joke, the principle is very real: The core of stock trading is preserving your principal. Never let yourself suffer significant losses. Being able to steadfastly protect your principal is the biggest trump card for our long-term survival in the stock market.

Now, let's look at the sectors and themes:

1. Technology Sector (primarily semiconductors)

Currently, within tech stocks, the semiconductor sector has the highest activity, especially concepts related to Tao's Law, which are performing very brightly. But honestly, the tech sector is particularly difficult to trade. It rises sharply and falls hard, with extreme volatility. It's only suitable for experienced traders to do intraday T+0 arbitrage.

At this stage, tech is still a high-position sector. Don't blindly try to catch the falling knife. Just follow the chart signals honestly and patiently wait for the adjustment to end. For instance, wait for signs of stabilization and a halt to the decline, or for a solid buy point like breaking previous highs before taking action.

This tech adjustment has lasted nearly 10 days. From a time-cycle perspective, the adjustment is basically nearing its end. As long as it stabilizes subsequently, there will definitely be rebound opportunities. It's just that the current bottom-grinding process is quite painful. Everyone, stay steady and don't panic.

2. AI Large Models, AI Applications

While the A-share market fell sharply overall yesterday, Hong Kong stocks rebounded on increased volume. The core driving force for the rally was AI application sectors like cloud services and AI large models.

My operational advice for you remains unchanged: This area is still driven by thematic speculation. Don't overcomplicate it. Just focus on buying on dips in the most fundamentally sound leading companies in the AI large model space.

3. Hog, Innovative Drug Sectors

Hog and innovative drug sectors had been rising consecutively for some time. Yesterday, they corrected along with the broader market. Many friends are asking: Has the trend ended? Is it starting to fall?

My answer is: Don't panic at all. Market capital cannot keep crowding into tech software forever. Sector rotation and balanced capital shifts are the constant rules of the A-share market.

This drop is just a normal pullback after consecutive gains, not a trend reversal. So, friends holding positions, don't blindly liquidate. Just hold on patiently and wait for subsequent capital to flow back and rotate. The sectors will warm up again soon.