How to proceed next week? Patiently wait for the "cup smash signal"!

Hello everyone, recently the market can only be described as “harsh,” and it’s not an exaggeration. Since March, it has been normal for thousands of stocks to decline every day, especially last Thursday and Friday, when only a few hundred stocks rose for two consecutive days. The market was generally quiet over the weekend. I was originally feeling lazy because of a cold, but I had previously made “breaking the cup as a signal” type predictions for major market nodes. Many friends still have a deep impression and high expectations for my analysis, so I can’t slack off now. New friends can refer to the 2024 September 24 big market event, when we also used “breaking the cup as a signal” during the intraday, and the main article title that night was directly titled “Breaking the Cup as a Signal, Market Bottom Signal Confirmed, Attack Route Map Here”:

[Taogu Ba]
1. Why wait? First understand the reasons for the market decline.
Why has the market recently fallen? Many friends think it’s due to conflicts in the Middle East. But brother, if you score this answer on a 100-point scale, you only get 30 points!
Here, I personally have two deep impressions:
First, the “cooling down” of the market was an important node. On January 17-18, a certain newspaper published “坚持稳字当头 A股要的不是 ‘疯牛’ 而是 ‘长牛’” (“Prioritizing Stability,” A-shares need not “crazy bulls” but “long-term bulls”), followed by “坚决防止市场大起大落” (“Resolutely prevent large fluctuations in the market”). Stability first, suppress excessive speculation, crack down on thematic hype and high leverage arbitrage, guide value investing, long-term capital investment, etc. Since then, everyone has felt how the market has behaved. So, will there be a “warming” signal when the market stabilizes?
Second, investors find it hard to establish a long-term investment view.
A large part of friends, including myself, have not fully understood theoretically: on one hand, emphasizing “guiding value investment, long-term capital investment,” but on the other hand, allowing quantitative strategies to harvest heavily. How can investors believe in value investing and commit to long-term investment? What’s the relationship between the 299 trades per minute of quant trading and “value investing, long-term capital investment”? If the theory can’t take root in the heart, the “long-term investment” tree will find it hard to grow.
Third, quantitative trading constantly brings despair to retail investors.
I am very familiar with quant trading. I have provided extensive training on how to respond to quant strategies in my training camp. For example, last Friday, after the market opened, everything was normal. The number of stocks rising in the two markets once reached over 4,000, with over 80% turning red, and many sectors showed a broad rally. But 15 minutes after opening, trouble arose! The yellow-white lines became abnormal. At this point, we already knew it was a sign of impending disaster. For friends like us who are familiar with market signals, this is a clear warning to reduce positions:
Later, the market suddenly changed dramatically, indices started to fall endlessly, and a weak rebound appeared, which was also a trap to lure in buyers. The number of stocks rising shrank from over 4,000 to only 620. The entire market had no support:
This is also why I emphasize in my training camp the “Trading System: Selling Point Rules”: in a market dominated by quant strategies, once a weakening signal appears, you must run!
2. When is the market a good time to add?
Having discussed last week’s market and core issues, the next concern is: what will happen next week? What are the signals for the market to stop falling and rebound?
Last week, I clearly told everyone that the current trend is downward. The market has not yet shown clear signs of stabilization. It is still in a correction cycle. To truly turn bullish, we need a clear market bottom signal, including strong signals like large bullish candles, volume, yellow-white lines, gap openings, etc. Due to time constraints, I won’t elaborate here. In simple terms, at least a large bullish candle with over 1% increase on high volume is needed.
Before that, if tomorrow’s market drops sharply, early traders might try to “play the oversold rebound” at some small nodes. But after such small nodes, it’s uncertain whether the trend will continue. Meanwhile, latecomers need to be patient and wait.
Please pay close attention; when the right signals appear, I will promptly “break the cup as a signal” for everyone!
3. What sectors should we watch next?
Next, let’s discuss sector opportunities—what sectors performed strongly last Friday? Which sectors should we focus on next week? Based on last Friday’s market and recent industry logic, I have identified two core directions, especially the second one, which is likely worth following up next week.
First, the strongest sector last Friday was energy, including power, energy collaboration, energy storage, space photovoltaics, etc. Within power, wind power and green electricity may be worth watching. For example, in green electricity, the “Data Center Green Low-Carbon Development Special Action Plan” clearly states that new data centers at key nodes must use over 80% green electricity, and renewable energy utilization is a key part of energy-saving reviews. The logic is that as long as conflicts in the Middle East persist, attention is needed. Specifically, tomorrow, analyze China Power Investment + Yunnan Energy Holdings + Jinkai New Energy. If China Power Investment + Jinkai New Energy cool off tomorrow, this sector might lack opportunities. But if Yunnan Energy Holdings hits new highs later, it could indicate further potential in power.
Additionally, we should gradually follow the commercial space sector. Why focus on this? The core reason is that commercial space is about to enter a period of intensive launches, and industry prosperity will continue to rise. Next week, it may attract significant capital attention. Recent industry trends show that global commercial space launches are accelerating. SpaceX has completed 36 orbital launches by 2026, with 11 since March alone, continuously setting records for launch density. Domestically, 2026 is called the year of breakthrough for reusable rockets, with models like Tianlong-3, Xingyun-1, and Zhuque-3 planning maiden flights within the year and aiming for recovery validation. The intensive launch period for commercial space is arriving, with opportunities likely between late March and April.
Finally, if the Shanghai Composite Index shows a large bullish candle with over 1% increase on a certain day, the sectors resonating with it should be promptly followed according to the “trust early, trust late” principle.
4. Tomorrow’s strategy.
Finally, the most critical part—tomorrow’s approach and the overall operation plan for next week. Based on the current market environment, I will clarify two core principles that must be strictly followed, whether for left-side trading or right-side trading, to avoid pitfalls again.
First, for left-side trading, strictly control positions and never blindly add. Left-side trading, often called “bottom fishing,” is suitable for experienced investors with strong risk tolerance. But in the current environment, position size must be controlled—absolutely no full positions. My approach is to keep left-side trading positions below 30%, and adopt a “gradual addition” method. For example, when the price hits a key support level, add 10%. If it continues to fall, add more gradually. Never go all-in at once to avoid deep traps.
Also, remember that left-side trading is not “holding on to death.” If the price breaks below key support (I personally avoid stocks below the 20-day moving average), you must cut losses decisively to protect capital. Many people get caught in bottom fishing because they lack stop-loss awareness, holding onto the hope of a rebound, but end up deeper in the trap. This must be remembered.
Second, for right-side trading, patiently wait and do not rush to enter. Right-side trading, often called " chasing the rise," is suitable for most investors, especially beginners. The core logic is “going with the trend”—wait for trend confirmation before entering, avoiding bottom fishing in the middle of a rise. As previously mentioned, the key is to wait for a volume-driven bullish candle over 1%. Before such a candle appears, be patient and do not rush in. Even if there is a small rebound, avoid blindly following. Weak rebounds in a downtrend tend to be opportunities for reducing positions!
In summary, next week’s core strategy: the market is still in a correction cycle with no clear stabilization signals. Most traders should wait for a volume-driven bullish candle over 1% before considering adding positions. Sector focus should be on power (including energy collaboration, energy storage, space photovoltaics, etc.) and commercial space (the upcoming launch period). Operation-wise, strictly control left-side positions, patiently wait on the right side, adhere to stop-loss rules, and avoid blindly adding or chasing high.

The market is very difficult right now. If you can’t predict potential hot spots and key stocks a day in advance like in this article, the difficulty will be very high. At this stage, it’s better to rest and observe!
Read my articles more often, and don’t miss my live broadcast every Thursday. You will definitely improve quickly!

Thanks to all dear friends who have supported my creations and live streams recently! Wishing everyone a long-lasting bull market and all the best! @CupWaterReflection @ChivesMonkey @lcq1678 @PeonyBloomingPeony @ShortSnipeTrader @ThreeThousandTriumph @FreeLife118 @Sunflower23 @TimeRoseCompound @CottonFlowerBloom420 @FollowTrend1126 @BigSisterStock @Seagullh @SmilingDiamond @FlyToTheSky @zymdfd @000880 @SecretClassmate @HeartfeltLetter @TaoliSong @AllThingsRevive @WisteriaBeautiful @BigChen @Starboy @Aromi @CNG01 @SageSage @RedApple33 @168DaoFa @ClearSkiesAfterSnow @ZhuoerUnique @MissingJilian

Disclaimer:
Investing involves risks. Trading should be cautious. Plans are never faster than the market. Follow the market movements. The content reflects personal ideas and records, only sharing my understanding and review of the market. It does not constitute any investment advice. Operate at your own risk!