When will China’s A-share market finally hit bottom? Even the institutions themselves haven’t reached a consensus.
Recently, the government and the China Securities Regulatory Commission have successively announced supportive measures in an effort to stabilize the market. In the last 10 minutes before yesterday’s close, several broad-market ETFs saw a sudden surge in buying. Many people are wondering: Is the A-share market about to bottom out?
But that could just be an illusion.
On the weekly chart, the Shanghai Composite Index is showing a complex M-top pattern, and there is still disagreement over whether the market has bottomed.
Optimists believe the correction is nearing its end.
CITIC Securities says the correction in core AI stocks is approaching the bottoming zone for the new energy sector in April 2022. Zheshang Securities, meanwhile, believes the surge in ETF buying fits the pattern of historical market bottoms.
The cautious camp thinks it’s still too early to draw conclusions.
Huatai Securities points out that the surge in broad-market ETF buying is more of a left-side signal. The negative feedback loop from leveraged funds has yet to fully unwind, and CATL has only just seen a sharp, high-volume plunge.
In fact, both sides have a point.
Left-side signals have appeared: ETFs have recorded net inflows for 12 consecutive days, totaling nearly 200 billion yuan.
But right-side signals have yet to appear: market turnover has shrunk to 642.8 billion yuan, a new low for the year.
The policy bottom and the funding bottom are drawing closer, but sentiment and the market itself have yet to truly bottom out in tandem.
What the market may be lacking now isn’t money, but the confidence to step in.
A bigger concern is that U.S. stocks are still trading near their highs. If they suddenly plunge, the A-share market will likely face another wave of pressure.
So here’s the question:
Will you wait for right-side signals to confirm before entering the market, or do you think the left-side signals show that the market has already bottomed—and are you willing to bet early?
Recently, the government and the China Securities Regulatory Commission have successively announced supportive measures in an effort to stabilize the market. In the last 10 minutes before yesterday’s close, several broad-market ETFs saw a sudden surge in buying. Many people are wondering: Is the A-share market about to bottom out?
But that could just be an illusion.
On the weekly chart, the Shanghai Composite Index is showing a complex M-top pattern, and there is still disagreement over whether the market has bottomed.
Optimists believe the correction is nearing its end.
CITIC Securities says the correction in core AI stocks is approaching the bottoming zone for the new energy sector in April 2022. Zheshang Securities, meanwhile, believes the surge in ETF buying fits the pattern of historical market bottoms.
The cautious camp thinks it’s still too early to draw conclusions.
Huatai Securities points out that the surge in broad-market ETF buying is more of a left-side signal. The negative feedback loop from leveraged funds has yet to fully unwind, and CATL has only just seen a sharp, high-volume plunge.
In fact, both sides have a point.
Left-side signals have appeared: ETFs have recorded net inflows for 12 consecutive days, totaling nearly 200 billion yuan.
But right-side signals have yet to appear: market turnover has shrunk to 642.8 billion yuan, a new low for the year.
The policy bottom and the funding bottom are drawing closer, but sentiment and the market itself have yet to truly bottom out in tandem.
What the market may be lacking now isn’t money, but the confidence to step in.
A bigger concern is that U.S. stocks are still trading near their highs. If they suddenly plunge, the A-share market will likely face another wave of pressure.
So here’s the question:
Will you wait for right-side signals to confirm before entering the market, or do you think the left-side signals show that the market has already bottomed—and are you willing to bet early?