The market has been a bit worrying these past two days. The Federal Reserve is still shouting the slogan of "suspending interest rate cuts", but the A-share market seems to have pressed the downhill button, stumbling all the way. The large volume at the end of the trading day is very similar to the scene of people scrambling for eggs at the weekend vegetable market. Some people asked, is this market situation a sign that the bull market has stalled, or is it preparing for the next big surge? Let's take a look at the story behind this.
The Fed changes its face: the drama of suspending interest rate cuts
The Fed’s recent attitude is a bit like an adult coaxing a child: just after saying “rate cuts”, they say “wait, don’t rush”. Data shows that the US economy is quite strong, and inflation indicators do not seem to be causing trouble, so they are beginning to want to stabilize interest rates to avoid too much money release and cause trouble. This operation sounds rigorous, but the market is instantly sensitive. The interest rate expectations have dropped, and the probability of a rate cut at the end of the year has been directly cut. For investors, this is like hearing “there are two more mountains ahead” in the last kilometer of a marathon.
The decline of A shares is not just a "technical adjustment"
Our A-shares have been fighting a war of attrition recently, with continuous declines and heavy trading volume at the end of the trading day, but the trading volume is still stable at around 1.8 trillion. What does this indicate? It shows that the market sentiment is a bit complicated: on one hand, some people are shouting "a decline is an opportunity", while on the other hand, some people are secretly reducing their positions and running away. The Hang Seng Index has stabilized a bit in the past two days, but the short-term fluctuations in A-shares are more of a tug-of-war among investors. Some people are staring at the "policy bottom", and some are thinking about the "market bottom", but the bottom has not been found yet, and the mood has already reached the bottom.
Funding bottom-fishing: a game for the bold
But don't think that everyone is afraid. Some people are doing the opposite. For example, the semiconductor ETF attracted 864 million in three days. What's going on? One reason is that the logic of "self-control" supports semiconductors. The other reason is that the growth sector is suppressed low enough by the US dollar index and the hawkish Fed, and the valuation has also dropped to an attractive position. In plain words, this is called "cheap cabbage is not too much". Some funds took advantage of the market adjustment to buy low. On the surface, it is a bottom-fishing, but in fact it is also a two-way blessing of betting on policy and valuation repair.
The bull market is not dead, it’s just reversing to catch up?
Some people ask, is this the "graduation ceremony" of the bull market? Not really. From the long-term trend of the index, the temporary adjustment is just to wash the dishes and change new dishes. Looking at the capital flow and market hot spots, it is obvious that someone is secretly planning. Therefore, the correction in the past few days is more appropriate to say "reverse to pick up people". It is estimated that there will be a correction next Monday. The end of the bull market? Not so fast, market adjustments have always been part of the cycle.
How to face this economic fog?
In the final analysis, market fluctuations are the result of economic signals and investor sentiment. While the Federal Reserve is cautiously watching, domestic funds have already started to move ahead of time. For ordinary investors, the most important thing is to focus on the big logic: the global economy is recovering, domestic policy support remains firm, and market adjustments often contain opportunities. Of course, blindly buying the bottom is not advisable. After all, no one can say how deep the word "bottom" is.
