After pondering for an entire year, I finally sorted out the tone of the market.
In four words, "support without lifting."
Let's first discuss what "support without lifting" means.
Actually, it's quite simple: continuously buying at relatively low positions without actively pushing up the stock price.
In any case, all the cheap ones are taken, and if the price goes up and becomes expensive, then whoever wants it can have it.
It is very common for a market based on valuation repair to have a "support without lifting" situation.
That is, large funds anticipate that this round of the market will not have a high degree of speculation, so they also actively choose a laid-back buying style.
Many people may be curious why the market in 2024 will be of this style.
In fact, there are mainly the following reasons.
1. Lack of incremental funds.Are there incremental funds? Yes, there are.
Incremental funds come from sources like Central Huijin Investment Ltd. and China International Capital Corporation, along with a significant portion of mysterious funds that are bottom-fishing.
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But what the market truly needs in terms of incremental funds is the willingness of market-oriented capital to enter the stock market.
From this perspective, at least for now, there is no sign of a large-scale entry.
It is normal for incremental funds to be scarce, as the market itself does not have the foundation for a trend-following rally.
Incremental funds are certainly not aimed at valuation repair, because the scope is too limited, and the profit effect will not be very good.
In a market without incremental funds, relying on this part of the funds that are already supporting but not lifting, who will carry the sedan chair is an inescapable issue.
Since there is no main force to carry the sedan chair, it is almost impossible for the market to go a long way.
Of course, how much this long distance and definition is, everyone should understand it in their hearts.
2. The valuation space is limited.Limited valuation space is the most important factor for supporting without lifting.
The essence of the market is to collect a large number of bargains, then slowly inflate the prices back to a reasonable valuation, and then inflate the bubble to sell out.
Is A-shares cheap?
If it is simply aimed at the large blue-chip stocks of A-shares, it is indeed cheap.
The valuation of the CSI 300 is indeed very low and has a strong attraction.
But what is the future growth potential of the CSI 300, and how much valuation space and potential does it have.
Let's also look at the technology that represents the future market. This direction has great opportunities, but judging from the current valuation situation and actual performance, it is already in a bubble area.
That is to say, speculation is possible, but there is not much substance to take out.
In the case of limited valuation space, supporting without lifting is a low-risk way for capital, and it is also the most fundamental reason for becoming the main tone.
3. The market lacks hot spots.Are there any sustainable hot spots at the beginning of 2024?
For the three days of rebound before the end of the year, is there a clear main line to ignite the market?
Think carefully, in fact, there is not, the market's funds do not have a clear main line.
This is very terrible because hot money has no place to speculate in groups.
But in fact, the funds are in groups, the direction of the group is inclined to high dividend, followed by blue chips, is the Chinese head.
Not to speculate on hot spots, not to find places with better money-making effects, but to group some anti-fall varieties, this also directly determines the main line of the market, which is valuation repair.
The market of valuation repair means to support but not to lift.
Everyone slowly brings the valuation back to a relatively reasonable, not undervalued position, and then prepares to retreat.
4, the time cycle is not enough.
The last point is that the time cycle of the market is far from enough to support a large-scale market.The essence of the capital market is the replacement of chips.
To put it bluntly, who holds the stocks determines whether they will rise.
If all the current chips are taken away by the bottom-fishing funds, and everyone collectively cuts their losses and exits, then the market will rise quickly.
But the decline in space is not deep enough, and the cycle below 3000 points is too short in time.
As the real main force of funds, have the chips been fully absorbed? Obviously not.
On the one hand, there is no obvious incremental capital, and on the other hand, the continuous washing of chips requires a time period.
Therefore, the super bottom of the market, every time it appears, will linger at the bottom for a long time, rather than being settled in a few days or dozens of days.
Looking back at the market before each round of bull market, the low position cycle, short for more than half a year, long for one or two years.
Looking at the time cycle below 3000 points in recent years, it will be clear why the time cycle is far from enough.
Under this situation, the capital chooses to absorb the chips at a relatively low position, supporting but not lifting, which is quite normal.There must be investors who are curious.
Why choose to support but not lift, let it fall when it should fall, and rise when it should rise, which is in line with market rules, isn't that good?
Because if the market really falls too much, there will also be great opportunities, but now it is quite awkward, and there are very few opportunities to make money.
If it is really a market that supports but does not lift, how should we deal with it better?
1. The need to maintain market stability.
Support but not lift, why support, in fact, the essence is to maintain market stability.
Many people do not understand the value of market stability, only feel that the money-making effect is poor, only see the micro-plate stocks that have plummeted.
Looking back at the rise of micro-plate stocks last year, it is always necessary to pay back when you come out, but this time it has made a historical level of big top, and the killing is more fierce.
The stability of the market actually refers to the stability of core assets.The A50 is the true core of the market, and it is certainly not in those small-cap companies.
That is the future, but it is not the cornerstone of the A-share market. Only by stabilizing the cornerstone can we stabilize the confidence of investors.
2. Focus on the layout of low-priced blue-chip stocks.
The market's weather vane is actually quite clear. At the end of December, the beginning of January, and the middle and late January, there is a clear layout of funds towards the blue-chip direction.
Many people will say that it is due to large funds bottom-fishing in the Shanghai and Shenzhen 300, but this is not the correct understanding.
The reason why the Shanghai and Shenzhen 300 is chosen first is because the valuation of the Shanghai and Shenzhen 300 is cheap, and the scale is large enough.
What large funds do is definitely to buy a large amount of cheap quality assets first, and this logic is correct.
But for them, if this part of the assets is not cheap anymore, then they will not buy it first, which forms a situation of supporting but not lifting.
3. The logic of survival of the fittest remains unchanged.
Many people ask, is there no opportunity for small and medium-sized market value stocks?The translation of the provided text into English is as follows:
"Dead wrong.
Great opportunities are always in this part of the stocks, but you need to be able to judge which ones are mistakenly killed and which ones are trash.
Like in the second half of 2023, the opportunity for such crazy speculation on loss-making stocks is definitely gone.
It can be said that the last madness of junk stocks has ended.
Because in the structural bull market from 2019 to 2021, these junk stocks actually did not rise. After a large amount of capital repeatedly washed and precipitated, they ushered in a round of 'catch-up' in the second half of 2023, which was actually just a high pull to sell.
The fate of small-cap stocks is that whoever can grow up with strength and high growth potential will win.
Survival of the fittest is a hard logic that is completely valid both in a bull market and a bear market.
4. Low-risk swing trading model.
Swing trading itself is actually the most suitable for the current market, this kind of market that supports but does not lift.
The market has actually shown everyone the bottom card, in what area, will continue to buy and buy."
Please note that the translation provided is based on the context given and may not be a literal translation of every word or phrase. The goal is to convey the meaning of the original text in a way that is coherent and understandable in English.This strategy is specifically targeted at core blue-chip stocks.
Under such a broad context, if you fully understand the concept of "support without lift," you will know when to add positions, and after the price rises to a certain extent, it is time to reduce positions.
The low-risk swing trading model is not difficult for the general investor as long as there is a profit target.
It's not a guaranteed money-sending market, but doing two small swings a year, even with only a 10-15% return, is quite good, amounting to 20-30% over the year.
If you don't know what to buy, you can simply buy the index.
5. The accumulation area during the large cycle bottoming.
The last point is that the ultimate purpose of the market's "support without lift" is actually to accumulate positions in the bottom area.
The area defined by the market is not for the Shanghai Composite Index, but for indices like the CSI 300.
Once the boundary of the blue-chip index is set, it will accumulate positions in this bottom area and then gradually build the base.
The necessary condition for building the base is for the short positions' chips to return to the hands of the long positions.This is a very lengthy process. The formation of a major cycle's bottom is certainly not something that can be achieved overnight; it is a region that requires time.
The market currently does not have the foundation to move in a trend-following pattern, as the macroeconomy cannot support a widespread increase in profits for listed companies.
The foundation of investment lies in the growth logic of major trends, not in the logic of speculation.
In such a complex environment, taking advantage of the low absorption of cheap chips is the best opportunity.
But the cycle will definitely not be short. The market, below the 3000-point mark, still needs to wander multiple times and requires a long time.
Many people are asking if this is the starting point of a bull market.
The year 2015 was a great bull market, and the new starting point of the bull market appeared in 2013. It was not until the second half of 2014 that it started, with a gap of more than a year in the middle.
Everything is still early, do not rush to conclusions, first do well in the market that can be understood at present.
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