"Now that Brother Chen puts it that way, it all makes sense," Old Zhang chuckled and said. "In other words, Brother Chen, you're short-term bearish, but long-term bullish!"
Brother Chen replied,
"The recovery in the offline real estate market isn't going to reverse in just a day or two, or even a month or two, right? Since the property market is continuing to heat up, major real estate companies across the real estate sector and local government entities are all expanding aggressively, driving urban development forward.
At the same time, infrastructure projects—high-speed rail, urban rail transit, major bridges, highways, and so on—are still being launched rapidly and in huge numbers.
With such strong demand, and with both industry demand and market scale continuing to expand, the stocks related to core sectors in the main 'Big Infrastructure' line—such as real estate, steel, coal, non-ferrous metals, architectural decoration, and building materials—have yet to fully price in the offline fundamental changes.
Naturally, their underlying logic remains quite solid, so there's no reason to be long-term bearish.
As for the short-term logic... You have to remember we're currently in a bear market, and the pool of active short-term capital in the market is extremely limited.
Furthermore, after more than six months of continuous decline, almost all retail investors in the market are fearful of chasing highs and averse to risk.
Since active short-term capital is limited and retail investors have little appetite for chasing highs, when the 'Big Infrastructure' main line has surged for several consecutive trading days and short-term capital in the market has accumulated substantial profits, the moment the market enters a phase of divergence, there's no reason for those profit-taking funds not to lock in gains and exit.
That's why capital was jumping the gun late in the session, executing a high-to-low rotation."
"Thinking about it from another angle, when market divergence occurs, profit-taking sells off, and institutional funds absorb the selling, isn't that a short-term buying point?" Xu Qiao mused for a moment and said, "It's just that this buying point requires enduring some intense short-term market volatility."
Old Zhang pondered for a moment before responding,
"So you mean it's suitable for buying low below the water line, rather than aggressively taking over at highs. Buying low below the water line is great—I personally... love bottom-fishing the most."
"You could say that," Brother Chen replied. "In any case, at this level, maintaining a certain position size is still very necessary."
"Besides the divergence at the end of the session in the 'Big Infrastructure' line today, there's another unusual movement worth paying attention to..." Old Wu paused briefly before continuing, "The 'State-Owned Enterprise (SOE) Reform' line seems to be showing signs of making a move today. What do you all think of the logic behind this line?"
"The 'SOE Reform' line did show intraday movement," Xu Qiao said. "However, I feel this line is a secondary branch companion to the main 'Big Infrastructure' theme, so it's unlikely to develop an independent trend on its own, right?"
"Mm, I feel the same way,"
Old Zhang agreed.
Brother Chen pondered for a moment and replied,
"I think it ultimately depends on whether there are favorable policy stimuli. The unusual movements in the two stocks 'Wuhan Iron and Steel' and 'China Baosteel' today were a bit strange. I wonder if there's new news about mergers and reorganizations in the market.
If there is such news, and if national policy supports deep reforms, mergers, and reorganizations of SOEs to achieve the macroeconomic policy goal of 'supply-side structural reform' and clear excess capacity, then it's entirely possible for the 'SOE Reform' line to break away from 'Big Infrastructure' and run its own rally."
Xu Qiao thought it over for a bit and said,
"I don't think there's much opportunity there. Besides, the intraday performance of 'Wuhan Iron and Steel' and 'China Baosteel' today didn't look like the work of major institutional players. They pushed the price up too aggressively, almost as if they were intentionally painting the tape for everyone to see to lure in retail followers.
If institutions had received insider news in advance, or if there were new favorable policy developments regarding 'SOE Reform' in the market, first of all, 'Wuhan Iron and Steel' wouldn't have had that kind of intraday minute-by-minute trend.
Secondly, they wouldn't hold back capital or hesitate to continuously attack a mega-cap heavy-weight stock like 'China Baosteel'."
"Haha, that's what I think too," Old Zhang laughed out loud. "If there really were blockbuster news, we'd know by now. But right now, there's still zero news, which shows it was just some hot-money capital in the market deliberately pumping the price to attract eyeballs. Their goal is simply to arbitrage the premium on tomorrow's higher open.
We just don't know exactly which fund was driving these two stocks. If 'Wuhan Iron and Steel' could make it onto today's Dragon and Tiger List for both exchanges, allowing everyone to see the true face of the capital manipulating it, that would be great."
"Not a chance," Old Wu said. "With 'Wuhan Iron and Steel's turnover rate, intraday gain, and three-day cumulative gain today, it doesn't qualify for the Dragon and Tiger List."
"Ah, that really is a bit of a pity,"
Xu Qiao sighed softly.
"However, 'China Metallurgical' is certainly worth paying attention to today," Old Wu paused, then added, "That limit-up hit was somewhat beyond expectations."
"That limit-up on 'China Metallurgical' completely established market recognition," Old Zhang said. "It has turned this stock into the capacity leader and core flagship of the market's main trend. I expect it to open significantly higher tomorrow, and indeed, a limit-up like this deserves a high next-day premium."
"If Brother Su weren't no longer trading solo using the 'Fuxing Road' seat, I would have almost suspected today's limit-up on 'China Metallurgical' was his doing," Old Wu said. "The technique used to seal the limit-up, the choice of target, and the timing of stealing the spotlight from 'Gemdale Group' were all commendable. I feel the capital behind today's move on this stock definitely belongs to a market master."
Brother Chen nodded in agreement.
"It's likely one of those well-known hot-money groups in the circuit."
"To dare to launch a main assault on a core mega-cap stock like 'China Metallurgical,' the capital size must be substantial," Xu Qiao said. "I feel like 'Huzhou Laodong Road,' 'Jintian Road,' 'Liyang Road,' or 'Sangtian Road' are all possibilities. Of course, it could also be a joint operation, in which case the 'Jinling Gang,' 'Foshan Clique,' or 'Yuhang Clique' are more likely."
"Regardless of who moved it, the market absorption and combined buying strength for this stock should be quite strong tomorrow," Old Zhang said. "Let's see how it goes. I feel like... this stock might still be worth playing tomorrow."
Just as the group was discussing the market conditions after hours and focusing their attention on 'China Metallurgical', inside other internal groups of major hot-money players both online and offline, as well as on online stock investment forums where countless retail investors gathered, everyone's eyes were also focused on 'China Metallurgical', with almost everyone discussing its intraday movements and guessing the identity of the capital behind it.
Then, amidst these heated post-market discussions...
time quickly reached 5:00 PM, and the Dragon and Tiger Lists for both exchanges were published.
The popular stocks with high market recognition that everyone was watching closely—such as 'Shenhuo Shares,' 'Pingmei Energy,' 'Tianshan Cement,' 'Beijiang Communications Construction,' 'Capital Group,' 'Chongqing Development,' 'Bayi Steel,' 'Linggang Shares,' and 'China Metallurgical'—were virtually all on the list.
"Huh, 'Foshan Shadowless Kick' actually locked in positions on several stocks today."
Seeing the Dragon and Tiger List data released by the two exchanges, some among the vast retail investor community on online stock forums exclaimed in surprise.
"Holy crap, 'China Metallurgical' was actually moved by the 'Qilu Gang'!"
"Lishan Road, Rongcheng Shidao, Rongcheng Chengshan—those are basically all the core trading seats of the 'Qilu Gang.' That's insane... Has the 'Qilu Gang' changed its nature? Why does this move feel completely different from their usual trading style?"
"It really is a bit unexpected. I originally thought it would be the 'Foshan Clique.'"
"I thought it was 'Laodong Road' or 'Alliance Leader Zhang.' Never expected this..."
"Since it's the 'Qilu Gang' guys, the expectation for 'China Metallurgical's performance tomorrow will probably have to be heavily discounted."
"That's for sure. Those 'Qilu Gang' guys rarely hold long-term views; they're almost always the type to dump their shares the next day as soon as there's a premium. But their style this time seems a bit different from before, so who knows if they'll hold out for a bigger move?
After all, I bought into the limit-up of 'China Metallurgical' today, hoping to ride another one or two limit-ups for profit. Now... I'll have to lower my expectations."
"On 'Pingmei Energy,' institutions were actually competing with hot money to scoop up shares today. How strange!"
"Right now, the market's main trend is driven by institutional capital. Seeing institutions among the buy seats on the Dragon and Tiger List for 'Pingmei Energy' means we can keep holding high hopes for it. Tomorrow, with the three-consecutive-limit-up breakout, a lot of popular stocks will definitely fall behind, but I'm betting on 'Pingmei Energy' to advance."
"Hard to say, but feeling institutions snap up shares like this, 'Pingmei Energy's run definitely isn't over yet."
"'Shenhuo Shares' today had a Dragon and Tiger List that was a bit below expectations—no famous hot-money seats showed up. It seems nobody wants to lift the sedan chair for the 'Foshan Clique'!"
"On the buying seats for 'Capital Shares' on the Dragon and Tiger List, however, prominent names were gathered in force."
"Too bad 'Wuhan Iron and Steel' didn't make the list. I really wanted to see who moved it today. Even up to now, there's no news of any reorganization in the market, yet somehow intraday... it mysteriously dragged out the whole 'SOE Reform' line."
"No news by now probably means 'Wuhan Iron and Steel' will open significantly lower tomorrow, right?"
"Not necessarily. Intraday today, this stock exerted a powerful driving effect on the 'SOE Reform' line and other related target stocks."
"It had a driving effect, but it felt a bit like forced tape-painting."
"As long as big capital is leading the way, who cares if it's forced tape-painting? As long as it goes up, that's what matters."
"In the entire 'Big Infrastructure' main line today, among the listed stocks, institutional seats decreased a bit compared to yesterday. And Mr. Su's 'Fuxing Road' seat seems to have stopped buying—no sign of it for two consecutive days."
"With the 'Big Infrastructure' main line surging like this over the past two days, I doubt Mr. Su would chase highs to buy in."
"I feel that the main fund managed by Mr. Su, 'Huayi Yuanzheng No. 1,' has shifted its key layout focus toward the Hong Kong stock market. Over the past two days, mainland real estate stocks in the Hong Kong market have surged noticeably harder than real estate stocks in the A-share market, and the buying style looks very much like Mr. Su's."
"Whether it's Mr. Su or not, the continuous unusual movement of mainland real estate stocks in Hong Kong is definitely a positive catalyst for the continued momentum of the 'Big Infrastructure' main line in the A-share market."
"Overall, the total buying volume on today's Dragon and Tiger List still exceeded the selling volume."
"Does this mean active main capital in the market is still continuing to increase its positions?"
"Even so, today's late-session price action clearly showed divergence. A lot of capital was already starting to front-run and exit late in the day."
"A market rally needs divergence to sustain itself. I don't think it's a bad thing."
"I hope the market keeps surging tomorrow."
"That depends on whether there will be more blockbuster favorable policy stimuli tonight. If there are no new positive catalysts, I feel tomorrow's market is destined to fall into a state of heavy divergence."
"If the 'Big Infrastructure' main line experiences a divergent trend, active funds recede, and high-to-low rotation takes place... which other main line will become the new destination for receiving capital?"
"Who could know that? We can only watch the intraday combined strength of capital."
"Divergence doesn't mean the end. I feel that even if the 'Big Infrastructure' main line diverges tomorrow, it'll just be mid-air refueling."
"Anyway, with such continuous big gains, I wouldn't dare chase it."
"Could funds choose the 'Film and Media' sector to speculate on next? Feels like over the past half year, the 'Film and Media' sector fell disastrously, with almost all related stocks cut in half and halved again."
"I feel the 'Film and Media' sector doesn't stand much of a chance. After all, the fundamentals are still worsening, and there won't be any improvement for the next few years. That sector was pumped to the sky before largely due to national ticket subsidy policies. Now that ticket subsidies are gradually being phased out, there are no new expectations to look forward to at all."
"Well, looks like I really need to steel myself to cut my losses and exit."
"What about 5G? Is nobody speculating on 5G? I've been lurking in 'Huaxin Communications' for so long I'm practically growing mold."
"4G isn't even fully perfected yet—isn't speculating on 5G a bit premature? 5G expectations... would be next year or the year after at the earliest, right?"
"After analyzing it carefully, I feel subsequent market movements will still revolve around 'Big Infrastructure,' 'Pharmaceuticals,' and 'Consumer Goods.' After all, these core main lines are where institutions are truly coalescing their power."
As everyone continued to speculate on subsequent market developments based on the Dragon and Tiger List data, time marched on...
In the evening, while everyone was eagerly awaiting fresh positive developments, whether regarding real estate, infrastructure, or the 'SOE Reform' main trend, everything remained dead calm.
There was virtually no major market news worthy of special attention—neither clear positives nor clear negatives.
Fortunately, overnight international markets performed quite strongly.
US stocks posted broad-based gains, providing a timely degree of optimistic expectation for the A-share and Hong Kong markets the following day.
(End of chapter)