At what stage is the current round of increase in the interpretation?

Executive Summary We have attempted to measure market sentiment from three perspectives: A-share volume and price data, fund flows and structure, and comparisons with prices of other assets. Over the course of more than a year of tracking, the A-share market sentiment index we constructed played a rapid alert role in market sentiment shifts. Now we are trying to analyze the characteristics of this round of upward trend and the stage to which this upward trend has evolved from these three perspectives. Key Points: Recently, after the market sentiment index fell below the 10% level and entered an extremely oversold state, it rebounded from the bottom, leading to a rapid warming of market sentiment. Volume and price indicators rose to bull market levels. However, on October 9th, stock prices experienced a significant pullback, indicating some differentiation in market expectations. Is this a normal pullback in the upward trend, or does it signal the end of this round of upward trend? Overall, the current bull market characteristics show rapid increases in volume and price, driven more by relatively flexible funds brought about by market expectations of A-share uptrend following policy announcements. There is still room for incremental funds to enter, stock valuations and cost-effectiveness remain at historically normal levels. In the absence of detailed policies and unproven upward logic, it is difficult to determine the peak of this round of market trends. During the policy and data vacuum period, price fluctuations are more driven by trading behavior. The pullback on October 9th may be due to the rapid rise in prices earlier, as well as some investors choosing to take profits after turning losses into gains. It is expected that the downside space in the A-share market is limited. Looking ahead, the current uptrend was ignited by policies, and based on the policies already implemented and related statements, there is still room for imagination in future policies. After policies ignite the market, the subsequent market evolution will mainly depend on the entry of incremental funds, including incremental funds from other markets and those transferred from other asset categories, which need to be continuously monitored. Ultimately, the realization of policy effects and fundamental data conditions will determine the market trend. Until fundamental data is released, the upward logic cannot be refuted. If the fundamental situation improves, especially if the issue of weak domestic demand improves, the market upside potential is expected to exceed expectations. Volume and Price Perspective: Relevant indicators have risen to historical bull market levels, but have not yet signaled a reversal From the turnover rate perspective, the speed of turnover rate increase in this round is rare in history, with the absolute value of turnover rate reaching historical highs. This reflects the high market sentiment in this round and also indicates that the speed of market trading information is accelerating. In terms of price characteristics, the proportion of stocks exceeding the average price of the past year is a very effective reversal indicator, which has now risen to historical highs but has not yet reached the level to signal a reversal. Fund Perspective: Relevant indicators are on the rise but still have room to reach historical highs, indicating potential for more fund inflows Looking at leveraged funds, the balance of margin financing and margin buying has risen rapidly, but it still has some distance to reach historical highs. The proportion of margin buying has risen to historical highs. In terms of public funds, the estimated stock investment proportion of open-end funds by Wind has increased significantly but has not reached previous highs. In terms of incremental funds, the fermentation time of this round of uptrend is short, and the share of newly established equity funds has not changed significantly yet Price comparison perspective: Relative cost-effectiveness decline, but still at historical median level From the perspective of equity premium rate, as the stock market surged, the equity premium rate has dropped from historical highs to normal levels; from the stock-bond yield spread, in the recent trading days, the equity market has shown strength while the bond market has been relatively weak, leading to a rapid increase in the stock-bond yield spread; from the stock index futures contango, the Shanghai and Shenzhen 300 futures have changed from contango to backwardation recently. Author: Gao Ruidong, Source: EB SECURITIES Research, Original Title: "【Macro】At what stage is the current rise in? - The 18th article of "EB Investment Clock" (Gao Ruidong)"