Hello everyone, it's the morning of September 6th, and the Chinese stock market has just closed for the Friday morning session. The merger of securities firms has not brought the bull market in A-shares that you were eagerly anticipating late last night. Do you know why? There are four main reasons for this, so please watch carefully and patiently, and I believe you will gain clarity.

Firstly: In yesterday's closing review, I still expressed my uneasiness about today's A-shares. Suddenly last night, Guotai Junan announced the absorption and merger of Haitong Securities. Both securities firms were suspended from trading today. The financial circle was excited, with many people unable to sleep due to their excitement, thinking that the bull market in A-shares would start today because the leading securities firms were rising. I can only silently wish that your expectations will come true, but we still have to face reality.

Secondly: Today's A-shares opened slightly higher and surged, with the index maintaining a horizontal fluctuation for an hour before breaking below the average price line at 10:40 AM. It then fell back and dived, losing 6 points. More than 4,400 individual stocks in the two markets were in the red, with only 700 rising, 30 hitting the daily limit up, and one hitting the daily limit down. The main force of capital in and out was 10.4 billion. In fact, it was impossible for the bull market to start as soon as the A-shares opened today because there were already 4,000 individual stocks in the red at the opening. So, what exactly is the reason for this? The four main reasons are as follows.

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The first reason: In yesterday's closing review, I reminded everyone again that the adjustment in the external stock markets has not ended. As expected, the three major U.S. stock indices rose and then fell, closing with a negative adjustment. The ADP data released in the U.S. last night was below expectations. Therefore, influenced by this, the three major U.S. stock indices rose and then fell last night. Tonight is when the U.S. will release its non-farm data, which means that the U.S. and external stock markets will still be watching for the release of this data. Last night's ADP data in the U.S. was already below expectations, so it is possible that tonight's non-farm data will also not be very good. As expected, the Japanese and South Korean stock markets continued to adjust with negative closes today.

The second reason: Affected by the typhoon, the No. 8 gale or No. 8 storm signal will last until at least noon today. The Hong Kong stock exchange was closed in the morning and may be closed all day in the afternoon. The Shanghai Stock Exchange has officially announced the suspension of Shanghai-Hong Kong Stock Connect trading for the whole day. This means that there was no inflow or outflow of Northbound capital today. If a bull market were to come, based on past experience, Northbound capital would generally flow in significantly. Due to the typhoon affecting the Hong Kong stock market, there was no Northbound capital trading, and without Northbound capital, today's trading volume was even smaller. Based on my own observation and experience over the years, when there is a typhoon, the stock market generally falls.

The third reason: Many people were so excited last night that they couldn't sleep. Last night, Guotai Junan and Haitong Securities both announced that they would be suspended from trading today. The merger of the two leading securities firms has a very high probability of success, and after the merger, the total market value will exceed that of CITIC Securities. This also triggers the entire market's expectation that leading securities firms will accelerate mergers and reorganizations. The market expects that in the future, firms like CITIC, CITIC Construction Investment, China Galaxy, and China International Capital may also merge and reorganize, so today's securities sector was able to rise in volume.

However, we should note that after Guotai Junan and Haitong Securities resume trading, it will be after the Mid-Autumn Festival. So, will it be 1.5 daily limit ups or two daily limit ups when they resume trading? The last time Guolian Securities acquired Minsheng Securities, it was only two daily limit ups. This week, when Guoxin Securities resumed trading after acquiring Wanhe Securities, it opened high and then fell. Therefore, the short-term rise in the securities sector's volume will be limited, and the medium term will continue to rise in volume and continue the oversold rebound.

The fourth reason: In fact, as soon as the market opened today, it was already clear that there would be no bull market in A-shares today. Just like when the stamp duty was halved, the bull market only lasted for a minute. Today, as soon as the market opened, it was clear that the index would maintain a red disk for an hour, but there was no bull market as soon as the market opened because the banking and high dividend sectors were lifted again today. The rise of the big finance and high dividend sectors today once again created a seesaw effect on the market. Think about it, with a trading volume of 35 billion in half a day, such a market can only be a seesaw, not a comprehensive bull market.

Today's A-share market saw the securities sector's volume rise and exceed 2% at one point, but there will be pressure from the short-term half-year line. The securities sector will maintain a fluctuation before it can replenish its volume and continue to rebound and rise. At the same time, the recent promotion of the old-for-new policy in major cities has been beneficial to the automobile manufacturing sector, and today the automobile manufacturing sector once rose by more than 2%, with JAC Motors once hitting the daily limit up and setting a new high. Furthermore, boosted by the high-quality development policy of the insurance industry, the insurance sector has indeed continued to rebound and rise this week. These are the three sectors that have been relatively stable today. However, today's lifting of the big finance and high dividend sectors has led to a full adjustment of other thematic stocks.

Thirdly: So, the question arises, how will the A-share market perform in the future?Firstly, this morning, the CSI 1000 index fell by 1.31%, the ChiNext index declined by 1.29%, and the Shenzhen Component Index dropped by over 1%. These three major indices, after six consecutive days of rebounding and rising, failed to break through the 30-day moving average. Since there was a reduction in trading volume yesterday, and it continued today, without volume, the rebound cannot continue. Therefore, as I mentioned in yesterday's closing review, I am still uneasy. The three major indices may fall back again to test the support levels near the previous lows.

Secondly, whether it's the SSE 50 index, the CSI 300 index, or the Shanghai Composite Index, they also opened higher this morning and had a wave of upward movement, but it was evident that they did not even reclaim the 5-day moving average, nor did they touch the 10-day moving average. Moreover, the volume was reduced by 35 billion in the first half of the day, which is a clear downward bearish trend. That is why I repeatedly emphasize that the A-share market has not finished adjusting.

During the Spring Festival of 2024, when the index was at 2635, I said there would be a super over-sold rebound, with a target of 3172. After May 20th, I believed that the stock market would fall back and adjust again. On July 2nd, I clearly and repeatedly told all my followers that 2024 is still in a bear market cycle, still a bear market. Of course, whether it's a bull market or a bear market, those with skills in stock trading can make it a bull market at any time, and there are good stocks even in a bear market. That's for the experts. But 90% of the investors in the market are ordinary investors.

Lastly, as expected, the Shanghai Composite Index indeed fell back after rising higher today, with a volume reduction of 35 billion in the first half of the day, falling back by 6 points. I have repeatedly said that a decline does not need volume. The external markets are all waiting for tonight's U.S. non-farm payroll data. I mentioned that if there are no significant positive news, the Shanghai Composite Index still needs to retest around 2738, including the STAR 50, which is also in a completely bearish trend. Therefore, the A-share market is still weak. Do you understand?