Likes ReceivedAre the two main themes coming back?!
$SentinelOne(S.US)hanghai Composite Index sh000001$ Today, the A-share market showed clear divergence: precious metals surged close to the daily limit at the opening, only to plunge shortly after, while cyclical stocks fluctuated so violently it made investors' hearts ache. In contrast, AI application concepts bucked the trend and rose, indicating that the two major market themes might be making a comeback!
1. Precious metals surged and then plunged—short-term risks are piling up!
Recently, international commodities have gone crazy, with gold prices hitting new highs daily. Combined with geopolitical tensions and a weaker dollar, this has directly lifted the A-share precious metals sector. But let’s be clear: the logic behind gold stocks in the A-share market is entirely different from that of international gold prices. Expecting a one-way rally is simply unrealistic.
Lately, several major gold stocks have issued warnings about potential short-term declines, and the Shanghai Gold Exchange has also cautioned against significant price volatility—clear signals of market cooling! Last night, I reminded everyone to watch for short-term signals. Now that cooling signals are in place, don’t impulsively chase the rally!
Even if it’s unclear whether international gold prices have peaked, A-share gold stocks have already risen significantly, with plenty of profit-taking pressure. Funds could dump positions at any moment, and risks could explode. Retail investors who missed the early rally should avoid buying at highs—it’s just asking for trouble!
As mentioned this morning, gold retailers are the first to crack. Look at today’s early session—they fell the hardest, which is no surprise!
Historical trends show that in every commodity bull market, rallies rotate. After financial-heavy sectors like precious metals surge, the momentum usually shifts to energy, chemicals, and agriculture—sectors with weaker financial attributes. Today, rare earths showed signs of movement, and low-priced chemical stocks are worth watching.
2. Cyclical stocks diverged and adjusted—AI + commercial aerospace themes are set to return!
As predicted in yesterday’s review, the precious metals sector indeed diverged and adjusted today. While this dragged down the broader index, it also freed up space for thematic stocks! Yesterday, cyclical stocks led the index higher; today, their adjustment caused volatility, while AI applications surged intraday, and commercial aerospace rebounded from lows—this shows funds are flowing back into these two major themes, a clear positive signal!
At the start of the year, AI applications and commercial aerospace were performing well before cooling measures hit. The market has been debating these themes endlessly, but let’s be honest: given the depth of capital inflow, the broader tech trend, and the market’s upward momentum, these are undoubtedly this year’s clearest themes!
Why are major themes so important? They drive market-wide profitability, lift more stocks, reduce declines, and boost trading volume—that’s their core value!
Of course, prolonged rallies invite cooling measures, but this doesn’t change the long-term trend: commercial aerospace sees daily positive news and just needs to consolidate holdings; AI applications are just rolling out, with industries still competing for market share and tech—far from over. Supporters of these themes, don’t be swayed by short-term volatility. Stay the course, hold your positions, and trust the bigger picture!
3. Broad-based ETF reductions aren’t exits—they’re portfolio optimizations!
Lately, major players have been trimming broad-based ETFs during index rallies, leading many to misinterpret this as capital flight—overthinking! This is classic portfolio rebalancing, not an exit!
In recent years, to rescue the market, major players loaded up on broad-based ETFs and blue chips. Now, A-shares’ structure has shifted, with tech themes gaining prominence—it’s a new game.
With tech stocks cooling short-term and broad-based ETFs seeing huge volumes, it makes sense for major players to trim ETFs and allocate more to tech themes, balancing “blue chips + tech” holdings. This allows finer market control and steadier slow-bull progress.
4. Market sentiment reversed—rotation hides pre-holiday opportunities!
Today, A-share turnover rose significantly, and thematic stocks’ mood improved dramatically, confirming yesterday’s call: after days of broad declines, sentiment has turned, and thematic stocks are rebounding!
Retail investors, stay sharp—no more chasing rallies or panic-selling! This market alternates between large-caps and small-caps. Index breakthroughs need large-caps; sustained slow bulls need active AI and aerospace themes. Different rhythms, but both offer chances.
After major players trimmed broad-based ETFs, institutional funds lifted blue chips while big capital simultaneously positioned in tech themes, keeping tech stocks lively—rotation is improving!
Look today: AI applications surged collectively, while oversold sectors like liquor and property rebounded, and insurers stabilized the market. After precious metals’ wild swings, the market finally moved past the mono-cycle-stock frenzy, with multi-sector rotation allowing broader opportunities.
With clear major themes and supporting sectors, patience and smart rotation can easily net a holiday bonus!
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