[Red Envelope] Rebirth in Adversity First Battle: All three dimensions—index, sentiment, and theme—predicted correctly!!!

The market recently has been like a long ordeal, wearing down many people’s patience and confidence. Amidst the ups and downs, I’ve come to understand more about Jensen Huang’s path to success—resilience is the strongest foundation to survive the cold winter. The strong may not always sail smoothly through adversity, but they will grit their teeth and persist in the lows—never admit defeat, never give up. The more you set high standards and expectations for yourself, the easier it is to feel suffocated by disappointment and fall into self-doubt. But true greatness is never the result of smooth sailing; it is forged through storms, shaping character and spirit. Over a month of stumbling and falling is not just accumulation, but also tempering and gathering strength before breaking free from the cocoon. Those who cannot defeat us will ultimately make us stronger. After enduring the darkest moments, with a steady mindset and a restored rhythm, having gone through extreme tempering, the king has returned. From now on, focus on moving forward, live up to this time, and live up to yourself.

Returning to the market, although today’s A-shares showed an overall decline, they exhibited a highly resilient V-shaped reversal throughout the day, standing out amid a global market crash. Japan and South Korea’s stock markets both fell over 5%, with Korea’s index triggering a circuit breaker, and Hong Kong stocks nearly down 2%. In contrast, the A-shares’ adjustment was relatively mild, fully demonstrating market resilience. It can be said that the big A may not always shine brightly when rising, but at critical moments, it is tough—focused on “stability.” [Taoguba]

Last night, I warned about today’s overall divergence in the indices. It’s easy to pull back after a quick rise, especially in the early trading hours. The first half-hour this morning didn’t need much attention, as chasing too much can lead to impulsiveness. Under external influences, the market opened higher due to oil but then dropped sharply on increased volume. A quick rebound would likely be met with a pullback. If you chase the recent high, it’s almost certain to be a big loss. I also mentioned that if the oil sector opens too uniformly, it’s not sustainable to follow through. On Friday, everyone already made this clear—you should have started to position on Friday if you wanted to, as many big funds did. Today, the market opened sharply and kept falling!

Currently, the electric power and electrical grid sector remains the most profitable. Its earlier trend was smooth with minimal selling pressure, making it a safe haven for funds. I mentioned last Friday to focus only on the main expectation of the electric power sector. The stocks I outlined then mostly closed in the red today, but considering the external environment was close to collapsing, those who entered on Friday are already seeing positive feedback. Operationally, the Friday breakout confirmed the strategy; after that, I repeatedly advised to stay close to the main line, paying attention to China Western Electric and China Central Electric. Even as the market neared the close on Friday, I kept reminding everyone. Today, two high points for T+0 trading—how high did they go? The highs in the morning and afternoon were what they were.

After UCloud’s success in the computing power sector, funds started flowing back; in the afternoon, driven by MINI max, the sector collectively strengthened. I continued to remind everyone at midday: the key focus in the afternoon is computing power. When the market opened in the afternoon, computing power stocks rose as expected, and the index rebounded quickly. However, a downside was that the rise was too fast, leaving no passive opportunities for the front runners, and after big fluctuations in the back, there’s a risk of quick pullback. Among the stable stocks, Runze Technology has support at the 20-day moving average and a gap underneath, with good technical and logical support. The index is currently at a stage low point, so even if there’s a big drop later, it’s likely to rebound.

The ability to grasp the main theme has been repeatedly validated over the past year. I promised to hold a weekly live session when I have time. Today, the platform asked me to explain “formation and operation methods of main themes.” Understanding themes, recognizing fermentation signals, and capturing the main line are my strengths. Interested friends can look forward to it.

Talking about tomorrow’s market rhythm:
I still believe the overall market risk remains low, but we must pay attention to the influence of external markets on A-shares. Recently, Japan and South Korea’s markets both fell over 5%, nearing technical breakdowns. Under continued weak external sentiment, the Shanghai Composite Index still has the possibility of a second bottom. From a technical perspective, a truly strong and sustained rebound usually doesn’t touch key moving averages easily (Arrow 1); repeated touches tend to trigger breakdown expectations (Arrow 2). Currently, the index is under multiple moving averages, with increased volume and downward trend, indicating strong selling pressure. In the short term, it’s easy to see a pattern of quick rises followed by quick retreats.

Operationally, tomorrow’s focus is on two points: if news overnight eases, a recovery rally may occur in the early session. Avoid blindly chasing highs or rushing in out of fear of missing out; if the market continues to decline into a second bottom, don’t overreact—current conditions don’t support a sustained big drop.

UCloud and Computing Power:
The core of the computing power and electricity sector now is emotional resonance and recovery, with funds rotating around power and computing branches. Previously, I emphasized that the power sector is more proactive than computing power and has been the main leader in this round of rally. But after several days of strength at high levels, divergence is emerging. Operation should shift to a high-low rotation.

Power stocks have risen strongly for four days, with divergence at high levels becoming apparent. Today’s operation follows two paths: internal switching within power (high-low switching), focusing on low-level first boards and one-in-two targets. The market signals are clear: on Friday, the index closed higher with fewer second boards; today, the index adjusted, and the number of second boards increased. This indicates funds are actively avoiding high and seeking low, reinforcing low-level rebounds and healthy sector rotation. External switching involves funds flowing back into the computing branch during the divergence phase, with the logic of computing and power not invalidated. With positive news, the certainty of the computing sector increases, leading to healthy sector rotation.

From the market, today’s power sector divergence was insufficient. After a brief divergence in the morning, it quickly surged, with four consecutive positive days. The market is dominated by stock rotation, and the divergence isn’t enough; short-term profit-taking has accumulated. The best entry point will be when the daily chart shows sufficient divergence, providing an opportunity for low buy-in during the digestion of selling pressure. Conservative traders can consider T+0 operations around the core of the sector, reducing costs through rolling trades, and avoid blindly chasing highs.

Xiaolongxia/OpenClaw:
Tonight, related news about OpenClaw is expected to continue fermenting, and combined with tomorrow’s weak market recovery expectations, the computing power sector is likely to rebound and rise. But everyone must be clear: the current market is still a high-low rotation, not necessarily a sustained or smooth trend.

Today, most stocks pulled up from the bottom, with intraday gains of over ten points, and profit-taking was substantial. If tomorrow’s recovery lacks strength or volume, funds will easily switch sides, causing sharp declines after rises. So, chasing highs is not recommended. Strictly follow the “early conviction” principle: if you don’t buy today, don’t rush tomorrow. Don’t be tempted by the highs. I already advised everyone to pay attention today, and the market has rallied again. The safer direction remains in power stocks—wait until the power sector shows full divergence before low buying, and avoid betting on the weakness of computing power. If computing power opens high and rises, focus on profit-taking; if power stocks pull back on divergence, they offer better low-cost entry points, aiming for next-day recovery rather than immediate activation.

Oil:
My view has always been consistent: news will gradually fade, and the sector’s elasticity will weaken accordingly. Friday is the last key window to watch; future operations will become increasingly difficult. I will no longer focus on this sector moving forward.

That’s all for today. If this helps, please highlight the post. Persistence is a virtue—I hope I keep writing, and everyone keeps organizing the data. More likes, please! Wishing everyone five consecutive positive days this week!