[Red Envelope] Stock Obsession Notes: Did you invite the gods during last night's livestream? Today, five celestial mechanism charts to invite them once more!

The darkest hours are over, a new week begins. Today, I continue to share insights from Tianji, teaching everyone how to navigate this hellish market with the “correct approach”! Seize the ice point for a long opportunity! Remember to like, follow, and support with a triple engagement—no free rides~ [Taogu Ba]

Today’s market clearly shows a bottoming rebound structure, which we often call the “Bull Exhaustion Yang,” meaning a phase of volume contraction and stabilization followed by volume expansion to establish a bottom. So, for the short-term confirmation of the 3800 effective bottom, we’re only missing two things: 1. Continued volume expansion with a bullish candle tomorrow; 2. Easing tensions between the US and Iran with no surprises.

Once achieved, the index will establish a short-term bottom, and after the darkest hours, there will be a “1-3 day small recovery cycle.” Then, around 3983, resistance and divergence will reappear. So, how should we prepare for this potential recovery window?

Stock Enthusiast Notes Point 1: The themes and core stocks resonating at the bottom of the box often mark the end of a small cycle

For example, on March 4th, the index hit its lowest at 4055. The bottom of the box was around 4050. When it dipped to the bottom, a technical ice point appeared. The themes resonating at this ice point were primarily in power, with the most limit-ups that day in power stocks, followed by tech. Be prepared: within personal mode, choose Yunnan Energy Holdings and Huagong Tech for the first rebound. Soon, you’ll notice that opportunities resonating at this ice point and box bottom tend to end with the cycle. From the ice point on March 4th, the index rose to around 4150, where high-level stagnation began, followed by a top reversal with power stocks retreating. So, stocks that strongly resonate at the bottom of the index box often mark the end of this small cycle. Usually, this cycle lasts about 3 days to a week, during which you can buy near 4150 while managing risk and then exit. This applies to Huagong Tech as well: the first bullish rebound on March 4th, triggered by the technical ice point at the box bottom, marked the cycle’s end, with profits taken at around 4150. Many explosive or arbitrage opportunities are linked to the index, especially with leading stocks maintaining momentum.

Stock Enthusiast Notes Point 2: “Anti-nuclear or high breakout” signals the early warning of emotional rebound
Looking back at March 17th, the power sector was risky. The rebound of Shun Na Co., which day, was driven by sentiment, not a sign of power stocks strengthening or sustaining. Its rebound only indicated a potential future index recovery. A more logical power stock, GCL-Poly Energy, reacted earlier with a nuclear rebound. If someone wants to play power stocks’ rebound, a large portion of funds would prefer GCL-Poly over Shun Na. On that day, Shun Na opened low and declined throughout, while GCL-Poly initially surged early in the session, indicating a nuclear rebound. If you wanted to play power, it was easy to get caught in GCL-Poly’s move from -7 to +4, then back to -6, nearly the intraday low. This shows that without a nuclear rebound, the path is blocked. The focus isn’t purely on power stocks but on sentiment. On March 17th, both index and volume declined, with market volume shrinking and only sentiment holding the market up. GCL-Poly, as a nuclear rebound indicator, lacked funds to push it higher. If it’s purely sentiment-driven, then Shun Na’s concept is somewhat related, as its recent high and subsequent two-day limit-up also reflect sentiment. This distinguishes between funds that truly want to play the logic of power stocks and those reacting to sentiment. The main signal here is Shun Na, which, in the following week, was an early indicator of arbitrage opportunities, with storage chip maker Demingli as the choice, which surged on Wednesday, completing the cycle.

Today, sentiment rebounds are easy to identify. Huadian Liaoning Energy and Huadian Energy showed early breakout signals, indicating sentiment rebound signals. Even if the index opens high and then drops sharply, there are still opportunities in resonant stocks that flow back. The main sectors that flow back are “power” and “tech.” If power stocks don’t chase high early on, then tech rotation becomes the best choice. Today, within the pattern, there are three options: focus on recognizable core stocks, such as last week’s storage chips “Demingli,” fiber optic core “Changfei,” and the trending “Guangku Technology,” which appears weak but has formed a trend. Picking two out of three with high attention is manageable. By the end of the day, tech stocks resumed strong inflows, and the intra-day profit/loss ratio was realized.

Next, we observe that today’s funds, due to the index’s high level and volume contraction, showed smaller gains in large caps like Yizhongtian and Shudian. Many large-cap stocks are still adjusting. So, in detail, when large caps show weak recovery and have already surged, it’s better to choose stocks with smaller or moderate market caps, avoiding the very large ones. Tomorrow, when these stocks fall or rise with divergence, rotation will occur again.

Stock Enthusiast Notes Point 3: When the market attempts to recover, be cautious of delayed buy points and avoid rushing in
For example, March 4th was a technical ice point. The core stocks at that time were Yunnan Energy Holdings and Huagong Tech. The overall trend was decent. The next day, after 5000 stocks surged to recover, Huagong Tech opened high but then declined, with the market opening high and then falling. Huagong Tech started to drop from over 4 points, indicating that sometimes the ice point isn’t the time to rush for recovery. It’s better to wait for clear reversal signals before acting. After March 4th, the market’s bidding surged to around 5100 with a high open, and after triggering early moves and profit-taking, the market strengthened again, creating new core opportunities. Waiting for confirmation is smarter and more certain. Huagong Tech and Yunnan Energy Holdings then moved smoothly.

From the perspective of outside funds, consider that most of the current market is underfunded. Many traders are already heavily in the red and eager to recover. It’s easy to make impulsive trades, like yesterday’s quick rise and fall, which can lead to losses. From an outside fund view, if the next day’s recovery occurs, the index will also attract impulsive trades, further amplifying the effect of quant strategies—helping to push prices up or down. Yesterday’s Sun Power’s intraday chart showed a trigger, with a weak-to-strong shift after a red opening, tempting to sell. But this influx of funds chasing the move led to new lows. So, it’s advised not to rush into recovery trades. Wait for delayed buy points, look for resonance opportunities, and then act. Yesterday, many thought the market would open low and go high, but the index opened low and continued to decline, which was abnormal. Last Friday’s energy storage didn’t meet expectations, and many stocks that surged last Friday opened below previous levels yesterday, with no red days all day. Many stocks fell from high levels. Until a clear reversal appears, stay cautious. Avoid chasing the ice point blindly, as it might be a continuation of the downtrend. Many who bought at the bottom yesterday may not recover their losses today.

Stock Enthusiast Notes Point 4: How to select sectors or core stocks resonating with the index?
Referring again to March 4th, when the index bottomed and recovered over two days, power stocks had the most limit-ups, and the sector with the most limit-ups was power. The sector’s rally was driven by power synergy, with the core trend in tech. Huagong Tech was the core tech trend at that time, resonating with the index bottom. When selecting stocks, focus on “high recognition,” uniqueness, and stocks that are unavoidable for outside funds to buy, ensuring liquidity.
For example, in our early “Ditching Heart” method, during such resonance phases, look for stocks with good positioning, elasticity, and high turnover, preferably in the front ranks. When the strongest sector shows divergence, identify which sector has the best rebound and proactive flow. If you miss the top sector or buy at suboptimal points, don’t buy the laggards. Observe whether the second-strongest sector can break away during divergence, focusing on core stocks with high liquidity in the bottom phase. For example, on March 4th, many power-related stocks like Baobian Electric surged to limit-up, but the key was Yunnan Energy Holdings, which hadn’t hit the limit. Look for stocks with good elasticity and profit/loss ratios, like Tongguang Cable or GCL-Poly Energy. These are safer because even if the sector diverges the next day, their positioning and elasticity make them unavoidable. The absolute recognition of positioning and the uniqueness of elasticity are important indicators for outside funds. Stocks with clear positioning and elasticity are highly distinctive, which is why funds returned to GCL-Poly Energy. When the sector resonance begins to explode, the first and second limit-up stocks are rare—only 1-2 with such elasticity, offering good profit/loss ratios.

Divergent sectors are even easier to handle. Why don’t we chase power stocks in the pattern today? The core reason is the above logic. Last night’s live broadcast predicted that the most resonant sectors today would be power and tech, with divergence between them. When the index opens high and then drops, what sectors diverge? It’s obvious: during power sector divergence, “tech trend divergence” occurs. After the index rebounds and then falls back, tech continues to make new highs, with rotation. When power stocks retreat at the end of the day, tech still hits new highs, confirming the divergence.

So, the early focus should be on tech stocks. Now you understand the careful planning behind my guidance. Why last night’s live broadcast clearly predicted that the best buy points for recovery would be delayed, and that bottom resonance with tech and divergence in the top sectors would be key? It’s the same approach as March 4th, when power sector divergence was first, followed by tech. Yunnan Energy Holdings was still hesitant, while Huagong Tech led with a gap-up and then a limit-up. Learning from setbacks is part of mature trading!

Stock Enthusiast Notes Point 5: Foreseeing the future
Yesterday’s index gap-down and decline were followed by news of a rebound overnight. Since March, it’s clear the index has been in a downtrend. Over the past two to three weeks, many days saw the index below 4000, with few limit-ups. The number of limit-ups directly reflects market sentiment. When market volume was around 500 billion, limit-ups were below 50 or 60. Now, it’s almost none. The number of limit-ups indicates market sentiment is very poor, from the Spring Festival to yesterday. Although the number of limit-downs isn’t high, many stocks are trending down 10% or 5%, indicating a nearly three-month consolidation. So, the 3800 level is a strong short-term support. I personally can’t judge the medium-term bottom yet, as this might be a downtrend channel. Looking back at previous slow bull markets, such a decline hadn’t occurred until March this year. The short-term bottom is likely the 3800 support identified in last night’s live analysis. The current view remains that the market may stabilize and recover over 1-3 days (small cycle), offering a small arbitrage window. Then, there’s a risk of a second bottom, which, if it completes, marks the end of the spring rally. A new large opportunity could then emerge. This is my personal outlook on the index. Long-term, the structure might still be a slow bull, but with rapid declines.

Combining this with our Tianji insights, the sectors like power and tech are still likely to end their recovery cycles within 1-3 days or before the index’s 5-day moving average resistance, or before the 3983 level and the 120-day moving average. Simplicity is key: focus on “tech trend + power synergy,” buy on dips, switch when high, sell at peaks, and play small positions with caution.

Why could we predict the strong support at 3800 last night? One chart reveals the core! That’s the essence of simplicity~ (Last night’s live analysis content)

If we only look at data, today’s 5136 stocks up is a very high figure. If the market recovers again tomorrow, it will reach a technical top. So, tomorrow aligns with our “Ditching Heart” rule: “After a climax, be cautious—leave the weak and hold the strong.”
Therefore, tomorrow’s focus is on the top themes today, like power stocks with the most limit-ups, and second, the “computing + power” theme, which indicates divergence expectations. The laggards will fall behind, a process often called “elimination.” How strong is this divergence? If US-Iran tensions don’t worsen, the key factor remains market volume. Today’s market recovery was most disconnected in “volume,” which nearly fell below 20 trillion yuan. Volume reflects the market’s fundamental health. Tomorrow, watch whether volume expands. If yes, divergence will be smaller, and initial divergence could still be an opportunity to target a 1-3 day small recovery cycle. Starting Thursday or Friday, risks will gradually be released. If volume continues to shrink, intra-day risks increase. Pay attention to one-day trading quant strategies: if today’s rotation is followed by a big surge tomorrow with no follow-through, consider taking profits.

Stocks that didn’t move today, if sentiment divergence occurs tomorrow, or if Huadian Liaoning Energy and Huadian Energy show divergence after Yunnan Energy Holdings’ double top, and the feedback is weaker than expected, then sector divergence and large-cap stocks may stabilize the index. The cycle of “fate turns” continues!

Regarding when to identify high-low turning points, here’s an exclusive tip from the Ditching Heart system: focus on these key points!

1. The turning point from top to down (e.g., 10.31 Pingtan Development Strait Innovation’s first limit-up);
2. High-level limit-up break or major divergence day;
3. High-level small black day with suspension;
4. Emergence of new impactful themes;

Data summary:

Up/down stocks: 5136 / 329
Limit-up stocks: 28 / 83
Limit-up rate: 64% / 78%
Intraday limit-down: 71 / 1
Total market turnover: 20963 billion, down 3522.3 billion from previous session

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