"Alright," Jia Yongxiang nodded, then added, "Then let's keep watching and wait for further market feedback."
True to Song Shaopu's words, in a bear market, building positions on the left side is extremely hazardous.
This is because market liquidity is severely restricted during a bear run; if the underlying logic of a main theme rally isn't robust enough to secure the consensus long-side backing of the broader investor base—especially the countless retail investors—it becomes extremely difficult to forge a unified bullish landscape or sustain a lasting market trend.
Moreover, the powerful money-making effect ignited so vigorously last Friday
had barely survived a single weekend before exhibiting a decay in buying interest during today's morning session.
This hardly looked like the precursor to a sustainable market rally.
Therefore, maintaining a certain degree of vigilance was entirely appropriate.
"What about... our position allocations in other main themes, such as the 'new energy industry chain', 'pharmaceuticals', and 'consumption'?" Jia Yongxiang paused for a moment before continuing. "Should we still proceed with continuous position reductions according to the original plan, freeing up corresponding positions and capital ahead of time?"
Song Shaopu replied, "Our buying plan can afford to be slow; we can observe subsequent market trend feedback a bit longer. However, the selling plan must still be executed according to the previously established strategy."
Looking at current market performance...
Even though buying interest in the real estate, steel, coal, and non-ferrous metals sectors was decaying, overall, these major core main-theme sectors were still exerting a capital siphon effect on other market sectors.
In other words, while these core sectors were being driven higher, the market performance of other main-theme sectors showed no signs of improvement; in fact, due to active capital being siphoned away, they dropped quite significantly.
Under this landscape, reducing positions first to reclaim a portion of capital was definitely the correct move.
Furthermore, in a bear market with relatively constrained liquidity, the market lacks the capacity for a universal breadth rally.
This meant that regardless of whether the core main-theme sectors—real estate, coal, non-ferrous metals, and steel—could forge a sustainable trend, the other sectors that had their active capital siphoned away held very little upside potential.
"Understood," Jia Yongxiang nodded promptly.
Instantly, he transmitted the corresponding trading strategy adjustments to all traders in the trading room.
As the following-long 'Huairui Performance Elite Growth No. 1' fund product adjusted its trading strategy and slowed down its buying pace for core stocks in main-theme sectors like real estate, steel, coal, and non-ferrous metals, on the market order books, the upward pressure on these core sectors began to intensify.
As trading hours elapsed, the selling desire among various capital factions within the arena grew increasingly intense, while proactive buying dwindled further.
As the morning session drew near its close, this sluggish market trajectory became palpable even to the market's active retail investors, who were typically fond of chasing highs and killing lows and following trends blindly.
"Holy crap, this trend... feels like it's going to collapse in the afternoon. Sigh, I chased the highs again."
Faced with the widespread surge-and-pullback trajectories exhibited near the midday close by many industry bellwether stocks and heavily hyped small-cap thematic stocks across core popular sectors like real estate, steel, coal, and non-ferrous metals, users on stock investment forums frequented by retail investors expressed helpless sighs.
"I chased highs too. Sigh, volume is inadequate; the trading volume of the two exchanges still hasn't improved."
"Without volume, it's hard to have a market rally. There's simply no way around it."
"Is the trapped capital locked inside the arena still too heavy? Without large capital aggressively and continuously attacking, it's hard to truly drive a rally. Actually, that morning sentiment wave was decent, but unfortunately, subsequent buying failed to follow through."
"It feels like sectors like real estate, coal, non-ferrous metals, and steel still lack the stimulus of heavy-hitting policy catalysts, right? Relying solely on President Su's influence makes it hard to support a comprehensive breakout of these main themes or attract massive external capital to assist the charge!"
"I still feel that the trapped capital inside the arena is what's suppressing the market trend; it's not a matter of logic."
"These sectors indeed carry excessively heavy trapped capital."
"Steel, coal, and non-ferrous metals have at least a trillion yuan of capital trapped inside. With such massive trapped capital, absent heavy policy catalysts or a bull market atmosphere, who is going to rescue them in a game played purely by existing funds?"
"Haven't heavy policy catalysts been popping up consistently over the past half-year? Yet previously, there was no improvement whatsoever! So I feel it's not a matter of catalysts."
"To put it bluntly, the current market is simply too strapped for cash."
"It's not a shortage of cash; it's a lack of money-making effects, making external capital unwilling to enter."
In the wake of countless discussions among retail investor groups...
The midday break vanished in the blink of an eye.
Soon, 1:00 PM arrived, ushering in the new trading session for the two exchanges.
Following the sentiment fermentation during midday and the collision of viewpoints among various investor groups, the ultimate direction of internal consensus tilted toward the bearish side.
Consequently, from the afternoon open onward, the core main-theme stocks in real estate, steel, coal, and non-ferrous metals—which had been aggressively chased and bought by numerous funds during the morning—successively began sliding from their intraday highs, accompanied by a continuous decay in order book volume.
As volume decayed and core stocks continued their downward slide, retail investors holding positions within the arena whose resolve was already shaky escalated their follow-up selling.
"President Su, market volume can't keep up, and individual stock trends are clearly beginning to pull back."
Noticing the anomalies on the order books of the two exchanges at 1:30 PM inside the trading room of Huayi Capital's 'Huayi Expedition No. 1' main fund, Fund Manager Hou Baolong reported to Su Yi, who was likewise staring at the trading monitor.
"The broader market trend is feeble, and capital's willingness to chase highs is weak. The trends of the core individual stocks we plan to build positions in are exhibiting varying degrees of pullbacks, exactly as you anticipated earlier, and selling pressure on these stocks' order books is intensifying."
"Mmm," Su Yi nodded, saying, "It's not just a matter of capital's willingness to chase high positions; it's also because these sector core stocks previously suffered from depressed expectations, with virtually no major institutional capital stationed inside to lock up shares. In other words... these core stocks are fundamentally where retail investors congregate most densely. Moreover, the operational and trading psychology of market retail investors is largely uniform.
That is, they find it exceedingly difficult to clearly perceive long-term fundamental transformation expectations. They can only intuitively feel market price shifts, making them extremely susceptible to emotional influences and prone to chasing highs and killing lows.
During the morning session, bullish sentiment was fervent and capital's willingness to chase was high. Retail investors holding chips naturally exhibited a strong desire to lock up their shares, displaying obvious reluctance to sell.
Now that sentiment is gradually cooling off, and after other major funds noticed the cooling sentiment and excessive order book pressure, they are equally unwilling to chase highs and grab shares.
Consequently, the willingness of these retail groups to sell naturally grows increasingly intense. Coupled with the already low market liquidity during a bear run and limited active capital flows within the arena, the surge-and-pullback trajectory grew increasingly fierce following the midday intermission."
"That's how it is," Hou Baolong replied. "Should we now gradually absorb chips and buy in according to plan?"
Su Yi smiled and said, "No rush, let's wait a bit longer. The current market exhibits an easy-to-drop, hard-to-rise trajectory. Furthermore, the 'real estate' sector we are primarily attacking suffers from a relatively chaotic chip structure due to the absence of continuous share-locking by major institutional funds. Operating under the chase-the-rise-and-kill-the-fall mode of general retail investors, there will be plenty of low-position opportunities to pick up chips."
As he spoke...
The afternoon market dive continued.
At 1:52 PM, the Shanghai Composite, Shenzhen Component, and ChiNext indices all dropped over 1%. Among them, the gains in the 'real estate' sector slid from an intraday surge of 2.5% in the morning down to around the 0.5% gain mark.
Meanwhile, heavyweight bellwether stocks in the real estate sector such as China Vanke, Poly Real Estate, and Gemdale Group saw their gains generally pull back from around 5% in the morning to roughly 1.5% at present.
At 2:07 PM, the ChiNext index's intraday drop reached 1.5%.
Industry and thematic sectors across the two exchanges presented an almost universal downward posture.
At 2:15 PM, Pingdingshan Tianan Coal Mining, which had nearly hit its daily limit in the morning, had crashed back down near the flat line, trapping a massive wave of capital at intraday highs.
Seeing that market panic had basically formed and fractional volume was beginning to expand,
Su Yi, who had been staring intently at the market trajectory, finally revealed an expression of excitement in his eyes.
He turned and instructed Hou Baolong: "It's about time. Continue entering the market to absorb chips!"
(End of Chapter)