March 21st, only concerned about systemic risk

Good morning everyone!! [Taogu Ba]

The idea of clearing positions yesterday was mainly due to concerns about upcoming systemic risks.

After Thursday’s market close, the prevailing sentiment was to stabilize the stock market.

Yesterday, the market did see an influx of new funds (although rotation still makes it difficult).

The entire morning was still okay.

Until the afternoon, when things started to deteriorate, which meant the stabilization attempt was failing.

So I decided to clear out Litong (a double top at 71.88 yuan at a high level).

Lio fell below the 7.5 platform low, so I followed the plan and cashed out.

Huaneng Power, although hitting the daily limit up, was very weak; Jinkai also showed significant divergence during the trading session.

Plus, if Huaneng Liao were to experience a delayed correction on Monday morning (which would cause a strong negative feedback in the power sector),

and the other two storage chip stocks were directly cashed out in the morning, with Jinniu being cashed out below water,

then considering systemic risk plus the potential for a correction on Monday,

I decided to liquidate even the two power-related stocks with profits as a cushion.

Our A-shares have always been unhealthy; once they weaken, they are artificially supported (by the national team rescuing the market).

Actually, it’s better to let them fall naturally.

After all, many tech stocks last year hit all-time highs.

With these companies undergoing structural adjustments,

hidden risks are emerging.

So it’s better to let the market fall thoroughly.

Unfortunately, the authorities won’t let the market fall easily.

They will inevitably intervene to stabilize and rescue.

If they insist on taking risks, it will still be a few heavily grouped stocks.

A few low-priced, trend-following power stocks that are heavily held.

When regulation was less strict before,

even if the market index kept hitting new lows,

the speculative stocks would still soar.

Speculative stock features: low price, low position, attractive patterns, some story expectations.

But now the problem is: the authorities won’t allow speculation without fundamentals—garbage stocks, and when they rise too much, they get regulated.

Last week, Yunnan Energy Holdings was adjusted until this Friday; it didn’t fall much.

Will Yunnan Energy Holdings imitate Pingtan Development from last year?

During that period, the market had little activity.

The Strait cross-strait concept was purely speculative.

Does the market only speculate on a few heavily grouped stocks?

Certainly not; just that the grouping might go higher and further.

Between AI hardware, computing power, and some news catalysts (short-term trading themes),

the key is to stay alert to systemic risks.

Also, observe whether Yunnan Energy Holdings will delay regulatory actions after the current crackdown.

If there’s no delay, then the later stage of the Pingtan Development pattern (regulation expiring on March 27) might repeat.

But is there a low-level alternative to replace the current profit-making effect?

Funds are still focused on Yunnan Energy Holdings (power and computing concepts), looking for low positions to rebound.

The concept of computing power synergy was a term that appeared during the Two Sessions.

It means that until bigger themes emerge,

the computing power synergy trend will be hard to end quickly.

Remember, AI hardware stocks are mostly at high levels (all-time highs),

while computing power synergy stocks are mostly at relatively low levels.

A good way to gauge what funds are doing is to compare.

Currently, high-tech stocks have already priced in the growth for the next 3-5 years.

This bubble is temporarily unburst in public funds, but once it does, it will cause systemic problems.

So don’t let my actions influence your judgment.

If I continue next week, I will keep watching opportunities in the computing power synergy sector.