There's an 80% probability that the Shanghai Composite Index won't hit new lows in the short to medium term. Today's news has effectively blocked any possibility of breaking previous lows. Moreover, I have a vague feeling that even bigger positive policies might be coming.
Today's official statement shows that top leadership has recognized the deflation issue and started addressing it. Although this isn't massive stimulus, it directly targets both the property market and stock market.
I suspect the authorities want to test whether a 20% stock market rally could temporarily boost consumption. After all, with the market at such low levels, a 20% rise carries little risk. If it effectively stimulates consumption, it would kill two birds with one stone. Even if it doesn't work, there's little to lose.
In the short term, avoid short selling recklessly. Even if there's a pullback, the extreme limit would be around 2700.
$Shanghai Composite Index(SH000001)$
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