The index continues to fluctuate within the range, the future market trend depends on trading volume!

$Shanghai Composite Index sh000001$ The market was unexpectedly strong in the morning session today, completely reversing yesterday's false bearish candlestick that opened high and closed low. However, sentiment clearly weakened in the afternoon, with the index surging then falling back, and a large number of stocks plunging. This was mainly due to adjustments in state-owned enterprises and banks, coupled with a lack of support from brokerages, which dragged down the entire market.

The index is still trapped within the 4000-4200 point range. Without strength from brokerages and major weighted stocks, a breakout remains difficult. Key points for the future market: If volume expands and the index stabilizes above 4190 points, new upside space will open. If trading volume remains around 2.2 trillion yuan, the market will likely oscillate around 4120 points, with rotation being the main theme.

 Now let's look at the sector performance:

1. Chemicals + Cyclicals: The strongest theme today (price increase logic)
The hottest trend recently has been price increases + re-inflation, with solid logic:
1. The US listed phosphorus and glyphosate as national defense priorities. With almost zero domestic production capacity, global orders are shifting to China.
2. Supply contraction from Morocco and Russia controlling output.
3. Peak spring farming season driving strong demand for phosphate fertilizers.

Chemicals, precious metals, and non-ferrous metals surged across the board this morning, with small metals and energy metals gaining over 6%. However, leading stocks started to fall back in the afternoon, suggesting possible divergence tomorrow. Strategically, avoid chasing highs and wait for dips during the divergence.

2. Computing Hardware: The only active sector in the tech space
While AI applications are adjusting across the board, only computing hardware is holding the line. Catalysts include the $60 billion AI chip orders from Meta & AMD, and the strong performance of US hardware stocks boosting A-shares.

Computing power is the most certain direction for AI performance, combined with the price increase logic. Focus on sub-sectors like CPO, electronic cloth, and PCB.

Note that there have been gains earlier, so only buy on dips, not chase highs.

3. Commercial Aerospace: Fully adjusted, turning around and warming up today
The commercial aerospace sector officially turned around today, with the index above 2300 favoring a bullish view.

Positive news includes: 1) Musk's concept of lunar electromagnetic catapult for launching AI satellites; 2) Blue Arrow Aerospace's Zhuque-3 recovery test is imminent.

With technical and news factors aligning, watch for the strength of capital inflows next. Focus on the electromagnetic launch and rocket recovery industry chains.

4. AI Applications: Continued pullback, forming a seesaw with resources
AI applications continued to fall sharply today, clearly showing a "one up, one down" relationship with the resource sector. Many star stocks have fallen near their previous adjustment lows but haven't clearly bottomed out yet.

The market style has already shifted, with capital moving from purely sentiment-driven AI applications to more certain sectors with solid earnings and price increases. Watch for potential oversold rebounds tomorrow, but overall, the focus should remain on risk aversion.