"Holy crap, what's going on? Is the market style shifting this obviously? Super large-cap stocks with a market value of hundreds of billions like Shenhua Energy and Hikvision are actually sustaining such explosive volume, skyrocketing all the way without the slightest pullback. Judging by this trend... are they going to race toward the daily limit up by this afternoon?"
At the midday close, many retail investors who had already noticed the unusual market movements, as well as the hot money groups still active in the arena, couldn't help but voice their surprise and amazement.
Among them, within the 'Foshan faction' major hot money group chat:
Li Jinshi of 'Foshan Guijing Road' couldn't help saying, "Over the past week or so, the market's 'black series' and 'real estate' sectors both seem to have experienced some degree of unusual movement. Institutional funds have been increasing their positions significantly across these two main themes. I'm thinking... could we seize this opportunity to ride a wave of market momentum?"
"Coal, steel, non-ferrous metals... do these have any expectations built in?" Chen Guiyun of 'Zumiao Road' disagreed somewhat with Li Jinshi's view. "The current market speculative sentiment is weak. Without sufficient expectations, pulling up the stock prices makes it easy to get smashed down. Even if we manage to lift the intraday market, it'll be hard to generate sustainable momentum, let alone make a clean getaway!"
"There are still expectations, aren't there?" Li Jinshi countered. "Isn't the 'supply-side' reform going full swing? Plus the explosion of the real estate market—these are all catalysts for sentiment. The main thing is that today, heavyweight stocks like Shenhua Energy, Jincheng Coal Industry, Hikvision, Poly Real Estate, and Gemdale Group have already generated intraday money-making effects. During the morning session, a certain amount of profit-making sentiment has accumulated.
In other words, the institutional funds have pretty much built the stage of market sentiment for us. Given that kind of sentiment assistance, using our funds to pull up smaller stocks for arbitrage will become a lot easier."
"Brother Liao, what do you think?" Chen Guiyun pondered for a moment, not answering directly, but instead turning his gaze toward Liao Guoxiang of 'Jihua Sixth Road'.
Liao Guoxiang thought for a moment and said, "Jinshi makes some sense."
"So Brother Liao thinks this market is playable?" Chen Guiyun asked.
Liao Guoxiang replied, "We can give it a try. Looking at the morning's market performance, the inflow of funds is quite substantial, and it is indeed flowing primarily into sectors like 'real estate', 'coal', 'non-ferrous metals', and 'steel'.
Also, I don't know if you noticed... today in the Hong Kong stock market, mainland real estate stocks have also experienced a concentrated, widespread anomaly. Right now, a bunch of mainland property stocks are showing a massive volume breakout and surge.
Combined with the current red-hot housing market and the 'new infrastructure' strategy proposed by the state, I think the real estate sector, after correcting for such a long time, should possess strong bullish momentum."
"Does Brother Liao mean... we can cut in from the real estate sector?" Li Jinshi asked. "But I feel that the 'coal' and 'steel' sectors have a larger expectation gap and better chip accumulation. Although the real estate sector's expectations are strong enough, there are simply too many lurking funds. Almost every real estate stock has a mixed internal chip structure with quite a few institutional funds lying low inside.
Affected by these lurking institutional funds, once we try to push the price up, the selling pressure on the market will probably become very heavy.
On the other hand, look at the 'coal' and 'steel' sectors. Since these two sectors were absolute cold-spots in the market previously, and the continuous decline lasted long enough, institutions have basically cut losses and left.
Furthermore, the retail investors in the market have essentially been trapped by the prolonged downward trend in stock prices. Under this kind of scenario, if we concentrate our funds to push the prices up, it will be relatively easier.
Moreover, the sentiment in the coal, non-ferrous, and steel sectors is not bad today. Once the stock prices surge rapidly on heavy volume, it will attract other active short-term funds in the market to join forces and go long."
"Just looking at the chip structure..." Chen Guiyun thought for a moment and said, "I agree with Lao Li's opinion. Indeed, many heavily oversold stocks in the steel and coal sectors have a simpler chip structure."
"Alright," Liao Guoxiang pondered for a moment. "Then let's cut in through the steel and coal sectors?"
"The main sectors to cut into are decided, but what about the targets?" Chen Guiyun paused and asked again.
Li Jinshi replied, "From the perspective of floating shares and positive drivers on the news front, Hualing Steel and Pimei Energy should fit quite well. Of course, the stock Bayi Steel has a relatively more active stock price, so its market recognition might be higher."
"They are all small-cap stocks under 4 billion," Liao Guoxiang said. "Since we intend to make a move, there's no need to hesitate—just evenly spread across these few stocks. If we can spark market speculative sentiment in one fell swoop and attract other active major hot money groups in the market to join forces, then... our capital volume will be enough to lock these stocks at their daily limits."
"Good," Chen Guiyun smiled and said, "Then let's go for it."
During this period, market hotspots had been scarce, and trading volume could be said to be worsening day by day.
Active hot money in the market was dwindling, and an increasing number of active retail investors, realizing the market had fully entered a bear market, began cutting losses and exiting.
This resulted in them making virtually no money and finding no decent opportunities during this period.
Their few attempts to enter the market ultimately ended in cutting meat and leaving.
Thinking carefully, it seemed like more than a month ago since the last time they made a massive profit—when they followed Su Yi to short the pound sterling during the Brexit referendum event.
Just as the core major hot money players of the 'Foshan faction' noticed the market anomaly and planned to guide market sentiment and ride a wave after the afternoon market opened, inside the Yuhang major hot money group chat during the midday break, Zhao Qiang also spotted the current market opportunity.
However, unlike the Foshan faction's focus on the steel and coal sectors, after careful consideration, Zhao Qiang's focus was more centrally set on the real estate sector.
"Brother Sun, the real estate sector is gaining momentum, should we play a wave?" Zhao Qiang tagged Sun Chengyu in the group chat.
Sun Chengyu replied, "Although the momentum of mainland property stocks in the Hong Kong stock market has picked up, the sentiment in the A-share real estate sector still lacks a bit of a spark. Let's see how it goes in the afternoon; if it really gains momentum, we can play a wave."
"Today's market trend is very strange," Zhao Qiang said. "I don't know which fund is guiding it, but it feels a bit like a linked market trend between the A-share and H-share markets."
"It does feel a bit like that," Sun Chengyu responded. "Regardless of the background of the funds guiding the market today, they certainly have some substance. Moreover, the absorption in the real estate sector during the morning was quite good. Through the changes in volume, you can clearly sense that major institutional funds are continuously absorbing shares."
"However, the 'new energy industry chain' main theme plummeted today," Zhao Qiang said. "If it weren't for the plunge in this main theme dragging down the entire market, today's broad market would have had a great chance of closing with a large bullish candle, driven by sectors like real estate, coal, non-ferrous metals, and security lenses."
"The 'Huayi Expedition No. 1' fund product has significantly reduced its positions in the 'new energy industry chain' main theme," Sun Chengyu said. "It's hard for the market trend of this main theme not to be affected. However, based on logical expectations, the trend for the 'new energy industry chain' is definitely not over. Once it falls to its bottom and fully prices in the negative news of the 'Huayi Expedition No. 1' fund reducing its positions, there should be a wave of momentum to be played."
"Yeah, I think so too," Zhao Qiang replied. "But the timing is definitely not right yet."
Amidst their discussion, the midday break passed by rapidly.
Soon, amidst the private discussions of various active hot money players across the market and the discussions of numerous active retail groups on major stock investment forums nationwide, 1:00 PM arrived in the blink of an eye.
As the two stock exchanges re-entered the continuous auction trading session, and as the market tickers began to fiercely fluctuate once again, sectors with heavy institutional inflows in the morning—such as real estate, steel, coal, and non-ferrous metals—brewed their sentiment over noon and were instantly rushed by various funds right at the opening of the afternoon session.
The corresponding core industry leading stocks, as well as concept-themed stocks with good chip accumulation and smaller floating shares, rapidly climbed higher, even more swiftly capturing the attention of all market investors and drawing in a rapid surge of following funds.
(End of Chapter)