"Bull Market Losses? A-Shares See Biggest Loss Today, 7.7B Yuan Chased One Stock, Ending with 2.7B Yuan Paper Loss"

On October 8th, the market opened sharply higher throughout the day, fell back, and then rose again, with the ChiNext Index continuing to set a new record for the largest single-day gain in history.

As of the close, the Shanghai Composite Index rose by 4.59%, the Shenzhen Component Index rose by 9.17%, and the ChiNext Index rose by 17.25%.

In terms of sectors, semiconductors, software development, memory chips, and data security were among the leading gainers, while a few sectors such as tourism fell.

The total turnover of Shanghai and Shenzhen markets for the whole day was 3.45 trillion yuan, an increase of 860 billion yuan compared to the previous trading day, setting a new historical record. Overall, more stocks rose than fell, with more than 5,000 stocks across the market rising.

What does "it's easy to lose a lot of money in a bull market" mean? Today's market taught a lesson to new investors.

At the beginning of the trading, the Shanghai Composite Index stood at 3674 points, which can be described as an opening limit up; the lowest point during the trading was 3372.19, and the closing point was 3489.78.

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Despite more than 5,000 stocks rising across the market, the short-term situation can be described as perilous—

At 9:30, as many as 942 stocks hit the limit up, meaning the market limit-up rate exceeded 17%;

At 10:40, the number of stocks hitting the limit up was reduced to only 50;

By the end of the day, as sentiment warmed up, by 15:00, the actual number of stocks hitting the limit up was 791.For those stock investors (likely new ones) who were eagerly anticipating a bull market during the holiday and blindly added positions at the opening, today might be the day when chasing highs is most easily trapped in this major rebound trend.

What everyone needs to be more vigilant about is:

If your own funds are trapped, you can pay the tuition for the next trading day and leave.

But what if you use leverage and accidentally get a margin call?

From a short-term perspective, the reason for being trapped is simple - buying those "second-tier" stocks that are not firm in their price limits and experience a significant drop after disagreement. Some software statistics show that there are hundreds of stocks that meet the "sharp pullback" criteria during the trading day.

Some stocks, even if they are not second-tier, are difficult to grasp in terms of their trend.

The most typical example is three newly listed stocks with "C" at the beginning, which all experienced a cliff-like dive in the morning, with a daily fluctuation of more than 90%.

Take C Hehe, which rose to a high of 507 yuan during the trading day as an example. Wind data shows that at 9:41, 4,215 shares of this stock were traded at 507 yuan, meaning that about 213 million yuan of funds were taken over at the peak.

After the temporary suspension, the stock dived straight down, falling to a low of 270 yuan at 9:44, triggering a temporary suspension. That is to say, the funds that entered at the high point experienced the taste of being "halved" in just 3 minutes, and they couldn't recover at the end of the day.

Of course, on the other hand, the funds that bottom-fished between 270 and 280 yuan ended up making a fortune.There is also C Wireless, with a retracement of 36.84% from its closing price compared to its intraday high, ranking first in A-shares (retracement of 36.84%). A total of 2.172 million shares were bought at high positions above 350 yuan, with a total transaction amount of 769 million yuan. However, the closing price was 228.01 yuan, corresponding to a market value of 495 million yuan, resulting in a combined loss of 274 million yuan for these high-chasing funds.

There are many similar situations today, so I won't list them one by one.

Back to the market, I guess what everyone cares about most is:

After today's huge fluctuation, is the bull market still there?

1) From the comparison of long and short curves, it can be seen that after the market bottomed out at 10:30 in the morning, the selling pressure was basically cleared, so it could rise again at the end of the day.

In terms of absolute gains, today's short-term divergence actually "screened" out the direction that is more likely to become the main line. Those stocks and sectors that failed to rebound face a greater test tomorrow.

As of the close, the ChiNext Index and the STAR 50 Index still rose by more than 17%.

Among the leading sectors, semiconductor equipment and securities have been almost firm.

The former is a growth style + elastic target preferred by funds under the bull market expectation;

The latter is an indispensable "flag bearer" of the bull market.2) Looking back at historical market trends, there are some phenomena that can be referenced and some that cannot.

Reference-worthy: After the market on August 28 last year, it consolidated for nearly two months and was unable to break through a second time, leading to a decline.

However, on May 22, 2022, the Wind All-A index saw its first significant bearish candle during the rebound, and the subsequent trend was unaffected.

What cannot be referenced is the recent market turnover repeatedly hitting record highs.

Looking back, when the turnover in the A-share market was around 500 billion yuan, it was difficult for us to expect the market to develop a sustainable main trend.

When the turnover increased to around one trillion yuan, sentiment warmed up, and the profit effect improved.

Now, with turnover continuously exceeding two trillion and three trillion yuan, it is a situation rarely experienced by both new and old investors.

Therefore, after a significant daily fluctuation in the market, we should not judge the subsequent trend based on past common sense.

Finally, in terms of news, the significant fluctuation in A-shares is also related to two events during the trading day.

First, around 10:30 a.m., the China Financial Times reported that financial regulatory authorities have provided guidance to commercial banks, requiring financial institutions to pay great attention to investor suitability management and investor protection, strengthen internal control and compliance management, and strictly control leverage. Bank credit funds are strictly prohibited from entering the stock market in violation of regulations, which is a financial regulatory red line that commercial banks must adhere to.This is actually a wake-up call for those irrational investors who claim during the holidays that they want to "go all-in" with leveraged investments.

Secondly, the three major stock indices in Hong Kong opened lower and continued to decline today, with the Hang Seng Index falling nearly 10% at one point, and still falling by more than 7% close to the close of the A-share market.

According to media reports, Yan Zhaojun, a strategist at Zhongtai International, believes that the investment strategy added the point of "timely profit-taking at high levels" yesterday, because the extremely high slope of the violent rise in Hong Kong stocks is difficult to sustain for too long.

Wu Lixian, a strategist at Everbright Securities International, said that the significant pullback in Hong Kong stocks indicates that the market is paying more attention to the performance of A-shares. If we look at the cumulative increase in Hong Kong stocks over the past few weeks, the current pullback is relatively reasonable.

He believes that the trading volume of Hong Kong stocks today is relatively large, reflecting that under the resumption of A-share trading, investors' speculative activities have also become more active. It is expected that the short-term performance of Hong Kong stocks still depends on the trend of A-shares, and in the medium to long term, it is expected that investors will continue to look forward to policy benefits, and the stock index still has a certain performance space in the future.