Global crash, numb!!

$Shanghai Composite Index sh000001$ A-shares got hammered again yesterday! The Shanghai index once fell by more than 1%, and the ChiNext index was even worse, directly dropping by more than 2%, which was disheartening to see. The most critical thing was the trading volume—the turnover of the two markets directly shrank to 2.18 trillion yuan, a new low for this round of the market. At this rate, it might break the 2 trillion mark today—unthinkable!

As for individual stocks, it’s even worse—3,719 stocks fell, with a median decline of 0.85%, fully reflecting the loss effect! Honestly, if it weren’t for heavyweight stocks like banks, brokerages, and liquor taking turns to prop up the market, we might have seen a 4,000-point defense battle yesterday—just thinking about it is scary.

The market performance was the same as usual—dominated by old-school stocks! Banks and consumer sectors continued to rise, and brokerages also started to jump. In contrast, small-cap tech stocks were weak again—AI computing power, commercial aerospace, robotics, and semiconductor chips were all beaten down, with no resistance at all. Those trapped in these stocks are probably numb by now.

Last night’s two major negative factors directly crushed the tech sector. One was the collective risk warning for space photovoltaics, and the other was the sharp drop in U.S. tech stocks, which spilled over to A-shares, causing the entire tech sector to flatline. There’s no way around it—A-shares have developed a habit of following U.S. stocks in recent years: whatever rises in the U.S. rises here, whatever falls in the U.S. falls here—no backbone at all, frustrating!

From a technical perspective, yesterday’s drop was more like a second bottom test. Moreover, the sharp contraction in trading volume isn’t necessarily a bad thing—it shows that at this level, the willingness to continue selling is weakening, and there’s not much panic selling left. This could be a small positive signal.

U.S. stocks continued to sell off last night, so A-shares are likely to follow suit and drop further at today’s open. Theoretically, this could be a good entry point for a tactical play! After all, there’s only one week left before the holiday, and funds are well aware of this—they’ll likely want to make one last push before the new year to earn some money for the holidays. There’s some consensus on this.

But we also need to be mentally prepared—the pre-holiday market is likely to be tough, for three reasons:

1. Big funds have long lost interest in playing! A few big players I know in the industry have already shut down their computers and gone on vacation. Some have cleared their positions to invest in other assets, while others have shifted to domestic demand sectors—all about risk avoidance.

2. Margin trading has declined for five consecutive days, with a cumulative reduction of 30.7 billion yuan. Since the new margin trading rules came out, everyone has been deleveraging, and market liquidity itself is shrinking.

3. Hong Kong stocks have been falling sharply recently, and funds have started flowing south to buy the dip—yesterday saw a net inflow of 25 billion yuan into Hong Kong stocks. With A-shares about to go on holiday, many active funds will likely shift to Hong Kong stocks, leaving even less liquidity in A-shares.

Actually, the biggest problem in the market right now isn’t how much the index has fallen—it hasn’t fallen much at all. The real issue is the "fan-blade rotation"—the switching is too fast! Yesterday was a deep dive, and today might see a surge—constantly switching between ICU and KTV. It looks lively, but it’s actually very hard to make money, and retail investors are just being harvested.

My personal view is that we’re probably still in the mid-stage of the bull market. Only when old-school stocks have also risen to expensive levels and there are no bargains left will we truly enter the late stage.

A word of advice: the biggest taboo in stock trading is clinging to past profit-making patterns. Just because you made money with one method doesn’t mean it will always work. A-shares have always been cyclical—there are no eternal trends, only eternal fluctuations. During the ebb tide, be extra cautious with high-priced stocks—you can’t earn all the money, but you can lose it all!

Finally, let’s talk about sectors and individual stocks to clarify the thinking:

1. Big Tech (Avoid the Pitfalls)

Semiconductor chips: Now we just wait to see when the source of the decline will stabilize. Before that, stay away—touching it is just asking for trouble.

Computing hardware: AMD fell 17% last night, Nvidia dropped 3.4%, and even Google’s earnings beat sparked market worries. The bottom line is, no matter how good the fundamentals are, tech stocks are going down. Most of our computing hardware companies rely on orders from overseas giants—when they fall, we get hit hard. Again, don’t look until things stabilize.

Robotics: Yesterday, the sector was already deep underwater at the open, effectively signaling no hope for today. The market’s excuse for the drop was ridiculous—something about robots knocking over elderly people… The truth is, the whole sector was falling, and they needed an excuse. Don’t be fooled.

2. Defensive Sectors (Focus Areas)

Agriculture: If the market continues to shrink and sentiment remains weak, agriculture is worth watching—it has cyclical expectations and strong defensive attributes.

Coal: No need to rush in—wait for another drop and then accumulate gradually, focusing on stability.

Consumer: The entire consumer sector has already started rising. Compared to agriculture and coal, it has a better chance of sustaining momentum—focus on commercial chains. As for liquor, let it keep rising—it’s just looking for bagholders. What fundamental logic is there? Selling a few more bottles during the holidays won’t cover the annual losses. Don’t get trapped at high levels.

3. AI Applications (Track on Dips)

There’s positive news: the Ministry of Industry and Information Technology is pushing hard for "AI + manufacturing" and aims to break through key technologies like computing chips and industrial large models. Guangdong has also pledged support for cultivating "AI + industrial software" and smart robotics service providers in vertical fields.

Additionally, in the model calls of AI agent Open Claw, our domestic Kimi K2.5 has become the most popular and was officially recommended as the main model—another small positive.

So the AI application direction has plenty of catalysts—keep tracking AI agents, ERP, and industrial software on dips. The software industry will inevitably undergo a major reshuffle—only companies that ride the AI wave will survive, while those that can’t keep up will be 淘汰. Moreover, AI applications have fallen too sharply recently, so a rebound is likely—worth watching.

4. Commercial Aerospace (Long-Term Watch, Wait for Opportunities)

One piece of news stands out: Nasdaq plans to introduce a "fast inclusion" rule specifically for large IPOs like SpaceX. Current market estimates put SpaceX’s potential valuation at $1.3 trillion—if the rule passes, it will likely become the largest company by market cap in the Nasdaq 100 after listing.

Plus, the AI computing boom has driven demand for space data centers. Musk also said he aims to achieve 100GW of space photovoltaics by 2030—a trillion-dollar market expectation. Domestically, Tianbing announced that its Jiuquan satellite testing facility passed pre-acceptance—the first of its kind in China’s commercial aerospace sector, marking the transition from rocket R&D to mass production and testing, with full-chain closed-loop engineering applications.

Overall, commercial aerospace is gaining momentum globally, with low-Earth orbit satellite networks accelerating and creating large-scale demand. There will also be frequent catalysts ahead—focus on companies with core beneficiary businesses and wait patiently for opportunities.