Market down 2 days in a row, external markets falling sharply: Is tomorrow a good opportunity to buy the dip?

The market has sharply declined. Will it open lower again on Monday? The trend is already downward. Is the bull market over? The index has already reversed, but there may be a gap down or further decline on Monday. However, there is support around 3910. The market has experienced two consecutive freezes, and Monday might see a third. This position offers a relatively high cost-performance ratio with expectations of recovery. Even if the market drops to extremely unexpected lows, those who buy the dip on Monday can exit calmly on Tuesday. The 4000-point level has been broken, and funds are less panicked. Tomorrow, we can expect a rebound to be possible. [Taogu Ba]

Last week, in five trading days, there were four bearish candles, with a significant loss effect. Even major liquidity traders collectively issued “surrender letters,” which shows the situation. However, those who made money last week had plenty of funds. The market is constantly evolving, and those who can’t keep up will eventually be eliminated. Past successful experiences may not apply to all markets, as the market is always changing. Currently, the market favors the strong, and it’s clear that quantitative strategies dominate. So, we should study what quantitative strategies prefer and what patterns they follow. We can buy in advance, lay low, and wait for quantitative buying to push prices up, then sell. This week, two positions we laid out were recognized by the market. Even amid continuous negative feedback, we maintained good positive feedback, gradually understanding the preferences and patterns of quantitative strategies. This is all based on leveraging our unexpected system’s momentum, hotspots, and rhythm to make core adjustments and achieve results.

Market Trend: On Friday, 620 stocks rose, 4,530 fell, 28 hit the daily limit up, 13 hit the limit down, with 13 large declines. The overall strength is 30. Based on this market data and combined with the Zhuque Road expectation system, the current index is in a downward phase.

Minor Trend: Currently, market hotspots are still in the energy sector—photovoltaics, energy storage, electricity, and lithium batteries. Due to external influences, energy security is now the top global concern. With the sharp decline outside, we expect a gap down or a dip tomorrow, with support around 3910. There will be expectations of recovery during the session, making tomorrow a good timing for bottom fishing.

Market Sentiment: The last five trading boards have been suppressed. DeepHuaFa A, China Power LiaoNeng—who can close with six consecutive boards is beyond expectations and contributes to the market. Last time, YuNeng Holdings unexpectedly broke through five boards and closed at six, contributing to the market and opening the height of consecutive boards. It then rose again. Currently, the market’s bearish leader is Jinniu Chemical, which also provided liquidity on Friday. So, overall, sentiment is not extremely negative or full of losses.

Hot Sector Analysis:
New Energy Sector: Although the power, photovoltaics, and energy storage sectors have already surged, they haven’t broken down yet. Other sectors have already broken down, so the rebound still favors energy sectors. This is the most solid logic at the moment. Due to Israel’s pressure from the US, indicating a pause in attacking Iran’s oil and gas facilities, Iran also announced a halt to bombings. Additionally, multiple countries have formed the Hormuz Strait escort alliance. It seems the situation between Iran, the US, and Israel is finally improving. However, the Houthi armed group has emerged with new threats, suggesting possible blockade of the Bab el-Mandeb Strait. If the Houthis act, global shipping costs will rise again. Because of today’s oil price drops and geopolitical news, tomorrow’s risk aversion and policy expectations, and the day after tomorrow’s new conflicts, the market will struggle to find clear trading logic amid these back-and-forth tensions. Oil prices remain an uncertain factor, which further highlights the potential of renewable energy sectors like green electricity, wind power, and energy storage. Regardless of how the Middle East situation unfolds, as the world’s largest energy importer, China’s push for energy independence will only strengthen.

Communication Sector: Leading companies in optical connectivity have high performance certainty, and new optical communication technologies are expected to benefit from technological iterations. Optical communication is one of the few sectors with both performance and growth imagination. From a trading perspective, when optical modules rise significantly, fiber optics tend to follow. When leading stocks surge, the laggards will catch up. Overall, optical communication is in a rhythm of valuation expansion in the first tier and supplementary gains in the second tier.

Summary: The index is expected to approach around 3910 tomorrow, which has support. After two consecutive freezes on Thursday and Friday, combined with a possible gap down or further decline on Monday, this could be a good bottom-fishing opportunity and one of the best timing points next week. If we grasp tomorrow’s rhythm well, it will be easier to avoid difficulties on Tuesday. Because the index is essentially betting on a small rebound, buying the dip tomorrow, and then pushing higher on Tuesday—whether that rally can hold is uncertain. If the index recovers as we anticipate tomorrow, there’s a high chance of a continued rebound on Tuesday.