【Investment Notes】Is the market bottoming out or just continuing to "dig a hole"? We'll find out next week!

Author of this article: Yu Hanxin (Te Li Zhang)

Last week, I thought the market would choose a sideways pattern, but to my surprise, today the Shanghai Composite Index has directly dropped below 4000 points, and after 75 calendar days, the market has shown us the Shanghai Composite Index starting with a 3 again.

However, one strange thing is that apart from Thursday when there was some trading volume, the trading volume on the other trading days has been pitifully low. Why? If the trading volume is not released, where is the panic selling? Has everyone chosen to lie flat?

From the weekly chart of the Shanghai Composite, since the “924 market,” the number of weekly candles breaking below the 20-week line is very few. This is the third time the weekly closing has broken below in this large cycle. There were also a few instances where the index broke below but closed back above by the week’s end! So from a trading perspective, the market is very likely to see a recovery next week. If it really continues to drop from here, I’ll just say one thing in one position: “lie flat”!

Let me show you this data; since the beginning of the year until now, as of the close on March 20, 2026, more than 3000 stocks have turned negative this year! To be honest, this data is still somewhat inaccurate because some stocks have seen a rise and then a fall. It is easy to imagine what everyone has experienced in this short half-month!

But from the perspective of the entire large cycle and trend, it is still a pattern of oscillating upward. The bull market is still largely intact; now it’s a matter of patience. Furthermore, if this place continues to drop, how much can we see? 3500 points or 3600 points? So for the current index closing, there is actually only a 10% space, so there is no need to be overly anxious! And really, if it drops that deeply, I have to suspect it is a huge pit-digging behavior, and this kind of trend is similar to the pit-digging before the rise of the 924 market.

In summary, I personally think that next week will directly show whether it continues to dig the pit down or takes a pause to recover first! But here, as I said, the slow bull is still there!

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