[Red packet] We were prepared to fight to the death, Your Majesty. Why do you surrender first?

Normally, the market should follow the upper line today. Generally, today is also a day to absorb buying power [Taogu Ba].

What has caused such a change in the market?

The external environment has actually stabilized. Looking at today’s market, there isn’t much capital betting on oil, gas, and chemical sectors.

This area’s influence has already diminished significantly.

But the problem is, in the morning, the market pushed CPO and the Paw Patrol, then at noon, it crushed the banks!

First, let’s talk about CPO. The main reason for the early high opening was the divergence in the US stock market yesterday, with optical communications soaring! Amazon also decided to place an order with Dongshan Precision, which requires some products to be produced by Xinyi Sheng.

Driven by multiple news pieces, plus the optical sector itself being quite large, such a big sector opening high directly lifted the indices that needed to recover from declines!

From this point, the market’s rhythm immediately became chaotic.

The market isn’t following our original script, so it’s normal that it can’t follow through.

Originally, the plan to increase positions in computing power today shifted from expecting a rebound to expecting a surge to take profits.

Reaching this point isn’t a big deal.

At worst, it’s selling computing power at the high and then looking for opportunities to buy back later.

In fact, the market also experienced a downward pullback in the morning.

The only shortcoming was that the decline was too slow in the morning, not a sharp panic sell-off during trading. Let me explain briefly: if it were a sharp sell-off, panic selling would be more likely. Or rather, panic selling causes rapid declines, while a pullback indicates large funds are buying back these chips.

The market didn’t have a panic sell-off.

But luckily, until noon, it was still within expectations—decline followed by a rebound.

The problem started at the opening of the afternoon.

First, Paw Patrol crushed bank stocks.

This was exactly the part we wanted to buy during yesterday’s intraday support.

Comparing the index trend, at this moment, the index was just turning red, quite fragile. It was the perfect time to choose either upward or downward direction, and crushing banks hit the vital point!

So, the afternoon decline in the index is also very normal.

What truly caused the computing power to collapse was a news story at noon.

At that moment, an announcement from across the ocean revealed that the founder of Super Micro Computer (a woman with a truly charming figure) personally used a hairdryer to replace the labels on AI server products that were originally embargoed to China, making these prohibited items legal and compliant.

It was said that these smuggled goods were sold to Xiechuang Data, causing Xiechuang to plummet again.

Moreover, this plunge from Xiechuang spread to the entire computing power sector.

But just imagine—

If the leasing sector of computing power crashes because of smuggling activities, wouldn’t that be a positive sign for domestic computing power?

Of course, I didn’t buy any computing power in the afternoon.

Because the index’s second decline was already abnormal.

During this phase of seeking a bottom, the more effort you put in, the more you lose money.

Even some individual stocks I bought low in the morning suffered a hit. It’s safer to wait until there’s more volume entering the market.

But—

I also mentioned yesterday that during this stage, the more it falls, the higher the probability of recovery!

It’s just that the recovery point might not be ideal.

So, subsequent trading should focus on the right side of the market.

The advantage of right-side trading is that it’s based on market filtering, so the certainty is higher.

Even if the market crashes, there will be some premiums.

Let’s rest early this weekend.

This week also featured a special bi-weekly edition. If there’s no further market movement, it will be extended until the week after Qingming.

Taking a longer break can reduce the sense of urgency. Sometimes, pushing yourself too hard isn’t necessarily good.

Next week, if there’s a general rebound, one important data point is the CSI 500.

Because of Paw Patrol’s previous dumping behavior, they made a big profit during the bottoming in April last year. Now, they have a lot of cash.

When the CSI 500 starts to rise, the market’s incremental funds are likely to come in. With this foundation plus recognition from other funds, a real market bottom will appear.

Normally, if this position is to recover today, it’s very likely that a process of re-finding the market bottom will quickly follow.

But today, it broke through the box range directly.

This adds the possibility that it might just fall through once and for all, then bounce back?

Overall, it’s better to stay optimistic.

Next week is expected to be a full-scale recovery (not just in computing power). Hopefully, there won’t be any surprises.