[Red envelope] Empty position this week to dodge the big drop, contributing to the market today, will the index usher in a turning point next week?

1. Market Sentiment Cycle [Taogu Ba]

1. Index Cycle
   Today’s index continued to break down, closing at 3957, filling the gap downward. Based on the current index pattern, this round of decline is not over yet. Support levels are hard to predict, especially since the short-term 4000 points and the gap have not stabilized. Next week, a volatile sideways trend is expected.

Combining the index with today’s thematic stocks, the intraday chart showed two cycles of recovery, sharp reversals, and rebounds. Essentially, this reflects ongoing market disappointment and continued capital exit. The morning rally resonated with the electric power sector, which then surged and fell back. By midday, photovoltaic stocks led the rebound, but they also pulled back. By the end of the session, funds accelerated selling to fill the gap, yet this was not enough, and selling pressure continued downward. The outlook remains uncertain.

The current decline cycle from 3.12 to today has yet to stabilize.

2. Theme Cycle
   Regarding the current theme cycle, it is generally divided into two main phases. The first phase is the post-holiday rally in electric power, which short-term traders are familiar with. Last Friday, the trend started to retreat, with Monday marking the second retreat point, Tuesday the third, and Wednesday the end of the retreat. From Wednesday onward, stabilization began, and a second wave of sector movement started, led by Huadian Liaoning and powered by Shao Energy shares. The strength is similar to the first wave led by Yunnan Energy Holdings. Conversely, during weak market periods, the electric power sector remains relatively resilient. Next week, a climax may occur; if the sector continues to strengthen, the second wave of speculation will be complete, and short-term traders can exit.

Yunnan Energy Holdings main rally: 2.25–3.13 peak and retreat
Huadian Liaoning second phase main rally: 3.16–today

Summary of the previous cycle:
(1) Yunnan Energy Holdings (electric power)
(2) Gan Energy Shares (electric power)
(3) Shun Na Shares (electric power rotation)
(4) Zhongnan Cultural (electric power retreat)
This forms a large cycle connecting three smaller cycles. If Shao Energy Shares is considered a small cycle, then Huadian Liaoning’s second wave is a larger cycle, with Shao Energy Shares as the first small cycle—this makes understanding easier!

2. Core Stock Analysis
(1) Electric Power
Sentiment led by Huadian Liaoning
Today, it surged with high volume, hitting 5 consecutive limit-ups. Monday will test its strength. The short-term focus is whether it can break through the five-limit-up barrier to become a breakout point. Under this expectation, Monday is likely to see continued turnover; if it weakens, exit promptly.
Strength anchored by Shao Energy Shares
As the strongest single-stock rebound in the sector, it may push higher next week. It is roughly comparable to Tai Zi’s position. If either weakens or strengthens, it will influence the other. However, funds are holding some reserves—secondary opportunities—so if Huadian Liaoning doesn’t advance, funds will likely continue to favor Shao Energy Shares.
Old-timer Yunnan Energy Holdings
The late-session rally was slightly overextended, but given the current trend, it remains consistent with expectations. As long as it doesn’t actively decline, it won’t significantly impact the sector. The sector’s hierarchy is complete, and the attitude of the sector leader is crucial.

(2) Chemical Industry
Sentiment carrier
Jinniu Chemical was strongly affected by electric power sector strength intraday. However, based on the current rotation between sectors, if electric power diverges in the future, chemical stocks are expected to continue to be a target for positioning. The key is to observe Monday and Tuesday’s performance—these two sectors are in a seesaw relationship. If Huadian Liaoning can’t advance on Monday, Jinniu Chemical may have a second wave of stabilization. Keep an eye on it. Other core sectors lack significant value at this point.

(3) Computing Power
Sentiment led by Meili Yun and Aorui De
In yesterday’s review post, I mentioned that if the computing power sector can’t actively strengthen, the outlook for today should be lowered. This morning, core stocks performed poorly, affected by some factors—like Xiao Zuowen (small article)—leading to a broad sell-off in the sector, including weak performances from Meili Yun and Aorui De. There is still a chance for a rebound next week.

(4) Commercial Aerospace
Core development in capacity, with Goldwind Technology
This sector was mainly affected by the index’s late-day breakdown, which caused a sharp sell-off. Shun Hao Shares hit the limit down, and Aerospace Development first broke below the 60-day moving average. Short-term, the sector has mostly held above the 60-day line; a break below will depend on Monday’s fund attitude—whether it chooses to recover. The aerospace sector is currently very subdued, but there is potential for further strengthening next week.

Additionally, Goldwind Technology was hit by large orders, which has recently suppressed the sector’s enthusiasm, causing funds to hesitate in bullish positions.

3. Sector Analysis

1. Electric Power Sector
   As discussed in the previous review, electric power retreated to the second and third levels on Monday and Tuesday, respectively. Since then, the sector has begun a second wave of stabilization. The key focus today is whether electric power or computing power can continue to strengthen. Sector rotation always involves some luck. Yesterday, a minor negative news for computing power caused core stocks like Jihong Technology to drop sharply, which supported the expectation that electric power might strengthen. Yesterday’s plan also mentioned monitoring Yunnan Energy Holdings alongside Huadian Liaoning. Today, Yunnan Energy Holdings opened lower but quickly rallied, which is a crucial move—like a “one mountain cannot hold two tigers,” a sector must lead with a counter-move.

2. Computing Power
   After rotation and strengthening on Wednesday and Thursday, today saw a correction. Afternoon negative news continued to weigh on core stocks like Hongjing Technology, which fell sharply. The next step is to see when the sector recovers. I believe the earliest could be Monday; if slower, it might be Tuesday or Wednesday. After each wave of sector rotation, the subsequent trend depends on whether the market continues to push higher. If it chooses to sell off directly, that’s also possible, so avoid blindly bottom-fishing.

3. Chemical Industry
   Next Monday, focus on the leading stocks in electric power. If Huadian Liaoning and Shao Energy Shares lack strength, funds are likely to flow back into chemical stocks for grouping. These two sectors are essentially in a seesaw relationship. Given the current market conditions, a sideways or downward correction is expected, and the second wave in chemical stocks has not yet ended. Although Jinniu Chemical hit the limit down today, overall, a crossing of the trend is anticipated.

4. Trading Plan for Monday
I am currently fully invested in Huadian Liaoning. Here’s my brief outlook for Monday: a gap-up or flat opening is normal. I will share real-time updates during the day. New followers, remember to pay close attention!

I hope friends who support me will like and cheer for me, helping the review post look good and attract more followers. That’s my motivation to keep updating! Also, my motivation to share live trading. Once I reach 10,000 followers, I plan to do live broadcasts. From my perspective, analyzing short-term patterns, everyone can become a short-term trading expert!

Thanks also to friends who are cheering me on!