The three main forces with the greatest impact on the short-term market trend at present are broad-based funds, conventional institutions, and speculative capital. Here is their thought process for portfolio adjustments this week! To allow everyone to more intuitively feel the changes before and after the holiday, I have specifically included the trading data from the last trading day before the holiday, September 30, for comparison.
I. Broad-based ETFs: Trading volume fluctuates with the market, and a large number of positions have not yet entered the market!
Previously, broad-based funds were considered a channel for the national team to enter the market. However, under the continuous promotion of the regulatory authorities, broad-based funds have now become an important channel for ordinary investors to enter the market! Especially for new stock investors who know nothing, they are more willing to enter the market through broad-based funds, which can reduce the risks caused by their own lack of cognition.
It is understood that on the first day after the National Day holiday, more than 100 billion yuan of funds subscribed to stock ETFs, which is also the first time that the net subscription amount of ETFs has exceeded 100 billion yuan in a single day. On October 9th, although the subscription amount of stock ETFs sharply decreased to about 40 billion yuan, the total subscription amount for two days also reached 140 billion yuan. Judging from the recent market value fluctuations of stock ETFs, although some newly established ETFs have started to build positions, most are still in a state of being empty or lightly positioned. That is to say, this part of the funds will become an important external aid for the entire market in the later period. As long as there are signs of the market stopping falling, they can participate in the rebound market at the first time!
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For this point, it can also be seen from the changes in the trading volume of several key index ETFs.
According to observations, the trading volume of the Shanghai Stock Exchange 50 ETF, the Shanghai- Shenzhen 300 ETF, the China Securities 500 ETF, and the China Securities 1000 ETF. The trading volume of these four ETFs has remained highly synchronized in the last five trading days, which is significantly different from before. Among them, the trading volume on September 30th, October 8th, and October 9th was the largest, and the trading volume on October 10th shrank sharply. That is to say, in the first four trading days, the trading volume of several ETFs almost kept pace with the changes in the market trading volume, which does not indicate too many problems.
However, the following trading day is very interesting. On October 11th, the market shrank sharply to 1.5 trillion yuan, but the trading volume of several ETFs not only did not shrink sharply on this day, but also showed a slight increase in volume. From a technical perspective, this situation of increasing volume at a low position after a continuous sharp decline indicates that funds are bottom-fishing!
It also indicates that broad-based funds with bullets in hand have already taken action to bottom-fish on Friday. The current position of broad-based funds is still not heavy. If the market continues to fall next week, then the willingness of broad-based funds to bottom-fish will probably be stronger!
It is worth noting that the layout direction of broad-based funds is basically weight stocks, especially the Shanghai Stock Exchange 50 ETF and the Shanghai- Shenzhen 300 ETF. When these broad-based funds start to bottom-fish at the low point of the market, the entire market will be quickly driven by weight stocks to rebound! This is also one of the reasons why Jingyang believes that the market will stop falling and stabilize after touching the 10-day line next week.II. Mainstream Institutions: Significant Shift in Pre- and Post-Holiday Portfolio Adjustment Strategies!
Broad-based indices have been the focus of the A-share market recently and are also the primary direction for the inflow of incremental funds. However, ordinary equity-type public mutual funds remain an undeniable force, and their portfolio adjustments often lead to hot spot rotation within the market. From the perspective of the pre- and post-holiday portfolio adjustment strategies of institutional seats, there has been a significant change, which will have an important impact on the transformation of the entire market structure in the future!
Observations indicate that for a long period before the National Day holiday, institutional seats were essentially in a state of silence. Especially between September 24th and September 30th, the market's activity had significantly increased, but institutional seats did not make any substantial adjustments. Between September 24th and September 30th, both the buy and sell orders of institutional seats were at relatively low levels every day. Taking September 30th as an example, there were only seven stocks with net institutional buying exceeding 10 million yuan, and five stocks with net institutional selling exceeding 10 million yuan, which is similar to the situation in August when the market was still in a bear market.
However, the situation changed on the first trading day after the holiday. On October 8th, there were more than 11 stocks with net institutional buying exceeding 10 million yuan, and the buying volume reached a new high since the end of May; the selling volume increased even more, reaching 27, which was only less than the forced liquidation during the stock market disaster at the beginning of the year. This indicates that on the first day after the holiday, mainstream institutions had a very strong desire to sell high.
On the second trading day after the holiday, October 9th, when the market plummeted, both buy and sell orders of institutional seats increased simultaneously, with 27 stocks reaching a record high of net institutional buying exceeding 10 million yuan, but the selling was even more, reaching 44. This was also the day with the most active trading by institutional seats after the holiday, but it was still dominated by selling.
On October 10th, after the market touched the 5-day moving average, the institutional seats' buy and sell orders shrank significantly, but the sell orders shrank more. This indicates that at this time, institutional seats had developed a reluctance to sell, unwilling to hand over their chips when the market fell to the support level of the 5-day moving average. The overall flow of institutional funds also shifted from a significant outflow on October 8th and October 9th to a slight inflow, marking the only inflow among the four trading days after the holiday. This shows that there is still a willingness to bottom-fish near the 5-day moving average.
On this Friday, October 11th, both the market and the ChiNext index opened directly below the 5-day moving average, failing to hold the key support level, which led to a significant decrease in the willingness of institutional seats to support the market. Therefore, the buy orders of institutional seats yesterday decreased significantly compared to Thursday, but the sell orders were basically the same as Thursday. It can be seen that the market breaking the 5-day moving average also affected the portfolio adjustment sentiment of mainstream institutions. Precisely because of this, it is believed that if the market continues to adjust next week, the willingness to bottom-fish near the 10-day moving average by institutional seats will also increase!
Looking at the sectoral fund flow, from September 30th to October 11th, the sector with the most institutional funds added was diversified finance, among which the digital currency branch saw a significant increase in institutional seat attention on October 10th and October 11th. In addition to diversified finance, institutional seats also successively added a small amount of funds to real estate in the first three trading days, and significantly added funds to the connected car network on October 9th. These are the directions of institutional seat fund addition in the last five trading days.
In terms of reduction, the semiconductor sector, which rebounded significantly in the first two trading days after the holiday, was the direction with the most significant reduction by mainstream institutions in these five days. Among them, October 8th was a moderate net outflow, October 9th was a significant net outflow, and October 11th was another significant net outflow. Following the semiconductors is the high-dividend sector, but this direction was only significantly reduced by mainstream institutions on September 30th, and the reduction effort was significantly reduced afterward.
The greatest divergence among mainstream institutions is in the new stock and Huawei concept sectors. In terms of new stocks, due to the significant contraction of IPOs, the new stocks that can still enter the A-share market have been selected through multiple layers, so the quality is mostly not bad. Moreover, the number of new stocks is not large, and there are not as many positions above the old stocks, so recently, institutions have shown considerable interest in new stocks. However, it has been observed that recently, while institutions have been adding funds to new stocks, the reduction effort has also been significant, so the operation of this sector still depends on specific stocks. In terms of the Huawei concept, after the pure-blood Hongmeng landing after the holiday, it is definitely a bad thing for the sector, and at this time, the divergence of institutional funds has increased, which is worth our vigilance!III. Swing Fund Titans: Sniping at 3 Sectors, the Engine of Market Hotspots!
Swing funds are the most sensitive capital in the A-share market. In the vast majority of cases, the core mainline hotspots in the market are first unearthed by swing funds, followed by institutional capital that then follows up and adds positions. Therefore, by closely tracking the movements of swing funds and combining them with the portfolio adjustment ideas of major institutions, one can discover where the new hotspots in the market are.
Observations indicate that from September 30th to October 11th, over these 5 trading days, the swing fund seats showed very weak buying intentions on October 8th, while the strongest buying intentions were on October 9th. From the general portfolio adjustment ideas of swing funds, it can be seen that on October 8th, when the market opened with a limit-up, swing funds were very cautious, to the point of being in a wait-and-see state for the day, which is something we retail investors should learn from. On October 9th, the market saw its first long bearish candle, but it was still stable above the 5-day moving average. On this day, a large amount of swing funds opened positions to bottom-fish. This indicates that swing funds generally believe that the market will not break below the 5-day moving average, which is also similar to previous views. However, looking back now, we were still a bit too optimistic.
In the following trading days, although the entire market continued to adjust, the buying volume of swing funds remained at a reasonable level and did not show too obvious changes due to the continuous decline of the market.
Let's take a look at the sector-specific portfolio adjustments by swing funds this week. There are three sectors where swing funds have added positions with the greatest strength:
The first is Huawei's HarmonyOS. On September 30th, Runhe Software was targeted by the stock-raising family with 199 million yuan, and Ruan Tong Power was targeted by Zhang Mengzhu with 50.1586 million yuan. On October 9th, Changshan Beiming was targeted by Ningbo Sangtian Road with 22.6434 million yuan, Runhe Software was targeted with 33 million yuan, Zhang Mengzhu targeted Runhe Software with 37.4895 million yuan, and Fang Xinxia targeted Topway Information with 65.8129 million yuan. These stocks all come from the Huawei HarmonyOS concept.
From the timing of swing funds' layout in Huawei HarmonyOS, it can be seen that the purchase volume between the festival and October 9th was still relatively large, but after the pure-blood HarmonyOS landed, the willingness of swing funds to buy decreased significantly. Considering that the divergence of institutional seats on the Huawei sector also increased at the same time, this laid the groundwork for the short-term cooling of Huawei concept stocks later on!
The second is the semiconductor sector. On October 9th, Ningbo Sangtian Road targeted Guomin Technology with 25.6332 million yuan, Zhang Mengzhu targeted SMIC with a huge amount of 458 million yuan, and Xu Liusheng targeted Silan Microelectronics with 54.6675 million yuan. On October 10th, Ningbo Sangtian Road targeted Guomin Technology with 121 million yuan, and Hujialou targeted Tianjin Pulin with 38.6972 million yuan. These stocks all come from the semiconductor sector.
From the timing of swing funds' layout in the semiconductor sector, it can be seen that when semiconductors collectively hit the limit-up on October 8th, swing funds failed to enter the market in the first place and only bought high on October 9th. Since swing funds only entered the semiconductor sector on October 9th, they definitely did not avoid the sharp decline in the following days. Therefore, after the semiconductor sector sharply declines, swing funds are likely to take self-rescue actions! However, as mentioned above in the analysis of the portfolio adjustment trends of institutional seats, institutions did not add positions in semiconductors. Therefore, it is believed that the semiconductor sector will have a strong rebound after touching the bottom with the market, but its sustainability may not be too strong!
The third is the diversified finance sector. On September 30th, Zhang Mengzhu targeted Tonghuashun with 63.4888 million yuan, and Xu Liusheng targeted Tonghuashun with 38.2208 million yuan. On October 8th, Shanghai Liyang Road targeted COFCO Capital with 34.0353 million yuan. On October 9th, Xu Liusheng targeted Hang Seng Electronics with 91.5127 million yuan. On October 10th, Zuoshou Xinyi targeted COFCO Capital with 75.1429 million yuan. On October 11th, Ningbo Sangtian Road targeted COFCO Capital with 67.7295 million yuan, Fang Xinxia targeted COFCO Capital with 75.3956 million yuan, and Hujialou targeted Sifang Jingchuang with 140 million yuan. These stocks all come from the diversified finance sector.From the timeline of speculative capital's investment in the semiconductor sector, it can be observed that from September 30th to October 11th, over the span of these 5 days, there has been a near-daily increase in positions in diversified finance, with the amount invested being relatively consistent. Considering that there has also been a significant influx of institutional funds into diversified finance during these days, it is believed that next week, diversified finance will continue to be the core of the A-share market.
In addition to these three sectors, speculative capital has also allocated considerable resources to the ride-hailing and shipbuilding industries this week!
The above outlines the main direction of portfolio adjustments by various major funds this week. It can be generally seen that the broad-based funds that can influence the overall market trend still have ample ammunition, and they can quickly replenish their positions as soon as the market stabilizes. The institutions and speculative capital, particularly institutional funds, which can influence the direction of hot spots, have started to regain vitality after the holiday. Institutional funds have a strong preference for technology stocks. If the trading activity of institutional funds continues to increase, the rotation opportunities for some fundamentally strong technology stock sectors will become significantly enhanced, such as autonomous driving, robotics, flying cars, commercial space, and semiconductors.