0304: Yet another day to see something I never thought I'd see.

The day before yesterday, there were 79 first boards, and yesterday’s second-board breakthrough had a success rate of up to 41%. Suddenly, there were 33 second boards, which is extremely rare. I didn’t expect today’s second-board success rate to be 0. Occasionally, there are gaps above the second board, but a break in the second board is once again a rare sight. Yesterday’s first boards were mostly oil and gas stocks, showing how intense the divergence in oil and gas is today. [Taogu Ba]
Trump initially announced that the battle would end in two weeks, then changed his statement to plan for four weeks. Yesterday’s latest statement was to avoid mentioning four weeks, instead saying that ammunition reserves are sufficient to keep fighting. This change indicates major issues, and the pre-war plan has encountered significant uncertainties. Then Iran first blocked the strait and later said don’t expect to fight anymore and just leave. This is one of the main reasons for the global market panic selling. Logically, if the conflict is delayed beyond expectations, oil and gas prices should continue to rise. Why did they suddenly plummet?
The reasons currently visible are: first, news that the US military plans to escort and ensure navigation, which triggered market expectations of falling oil prices; second, large profits from recent gains are being realized; third, multiple stocks issued regulatory risk warnings, dampening speculative sentiment.
This morning, I saw Trump post on social media announcing US military escort, and I couldn’t help but laugh. This big talker is lying again. The narrowest part of the Strait of Hormuz through Iran is only 39 kilometers wide, meaning the most common 122mm rockets used worldwide can cover attacks. Foreign media reported yesterday that the USS Lincoln began to withdraw to avoid missile attacks, yet today he dares to claim that warships are passing through the strait? Surprisingly, the market actually believed it! As for the news that Chinese and Russian oil ships received exemptions to pass, it was announced by Iran on March 2. That evening, I saw a phone interview with a long-distance vessel on Phoenix News, saying they are preparing to go in to load oil. This news wasn’t just today’s surprise.
Yesterday, Trump also caused another panic. He said US ammunition reserves are very sufficient and can keep fighting. He forgot that during the 12-day war last December, the US only assisted and consumed 80% of its intercept missile stockpiles. This time, the US is the main force, and the main weapons for the fleet’s protection are standard 6-year production of 125 mid- to long-range missiles and 40 super-long-range missiles produced in 3 years. The naval SAMs have an annual output of less than 180. With such capacity, how can he still claim they are very sufficient (Eastern University’s export-type P-15 missiles are produced on a 24/7 unmanned black-lit factory line)? If Iran fires a few more days of missiles, the US fleet will have to withdraw entirely.
Today at noon, there was news that Iran hit a Aegis destroyer and a supply ship with the latest missiles. If true, it would set a precedent. The last successful missile attack on a modern destroyer was 44 years ago during the Falklands War, when Argentina sank a British destroyer with a Flying Fish missile. Today, shareholders losing money in oil and gas stocks should all curse that lying old dog! I’ve been saying for the past two days that I won’t participate in oil and gas because I don’t want to gamble on such volatile swings. But today, shipping stocks were also dragged down. Yesterday, I bought a 30cm limit-up GuoHang YuanYang, but today it opened at the limit down, so I quickly sold. Yesterday’s profit was even offset, but then it unexpectedly rose another 20 points. Sigh.

Many expected a recovery today, especially since it’s the first day of the Two Sessions, so some market support was expected. But today, over 3,600 stocks declined. Compared to yesterday, today can be seen as a weak recovery. Trading volume sharply decreased by 700 billion, indicating a significant reduction in panic selling. Compared to external markets, that’s quite good. Many professional analysts believe today’s large A-shares were dragged down by Hong Kong and Korean markets. No wonder Korean media made such comments:

Funds flowing out of oil and gas stocks today mainly went into the electric power sector. Yesterday, I bought Xinte Electric, which surged 18% intraday, and Tongguang Cable hit the limit with a 20cm rise. Shares like Shun Na Shares, Jicheng Electronics, Han Cable, etc., all hit the daily limit. The driving logic comes from the State Grid’s “14th Five-Year Plan” investment expectation of 4 trillion yuan, combined with increased AI computing power electricity demand and outbound investment logic. The sector has policy and performance support, making it the strongest main line today. Other sectors like Bawei Storage announced outstanding performance, hitting the limit with a one-word board, boosting storage chip rebounds. Military, agriculture, and environmental protection stocks also showed some activity. Power sector has been a key part of the HALO concept I’ve been sharing these days: heavy assets with low淘汰, like Hunan Huayin Power, which has been losing money for seven years until last year when coal prices dropped, turning profitable. But its debt ratio is 91.98%, with interest-bearing debt about 23.6 billion yuan, and about 6.7 billion yuan due within a year. Its cash cannot cover that, yet it remains irreplaceable, and its stock price often hits the limit up.
A few days ago, trading volume surged continuously, but today it sharply declined, at least confirming the rumors. During the meeting, institutions were restricted from selling, so the index had no downward pressure. The only concern is where the funds will go next. Today, they went into power stocks, with 38 first boards accounting for nearly half. Whether power stocks will continue tomorrow depends on whether they hit the second board. Like me, many hope that after oil and gas stocks diverge, funds will flow into technology. Unfortunately, that didn’t happen. However, today I opened a new position in a tech stock that made a profit. There are still many tech-related news today: Huawei Ascend shipments in bulk, DS V4 released during the Two Sessions, and Nvidia chain-related news. There’s also a lot of analysis on the HALO theme. Personally, I feel conflicted about the HALO concept. I think our logic and Wall Street’s are fundamentally different. They worry about AI investments not paying off; we are driven by policy support. Just like Korea’s stock market reacts so strongly, it’s not really related to our A-shares. Their main oil tankers are almost all stuck in the strait, while ours can pass freely. There’s no need to watch Korea’s market trend.
Today marks the start of the Two Sessions, so keep a close eye on capital movements. Yesterday’s oil and gas surge saw funds flow into power stocks today. If tomorrow funds flow out of power stocks again, where will they go? I hope it’s into technology.

Today’s operations:
No action. Yesterday’s floating profit has almost disappeared, and today’s floating profit was offset by floating losses. Shenhuo Shares was based on news of rising aluminum prices before the market opened, so I didn’t buy the limit-up but it wasn’t a mistake. JuFei and HeZhong followed intraday. These three stocks all have appealing charts.