Here comes the first test

The first trading week after the Spring Festival is finally over.

A good start, indeed it is here.

Subsequent adjustments also appeared.

The Shanghai and Shenzhen 300 Index, which led the gains earlier, opened higher and moved lower, but fell by 0.95% in a week.


Of course, from a technical perspective, adjustments are not a bad thing.

This is more like the “first test” of this round of gains.

The picture below is the hourly RSI chart of the Shanghai and Shenzhen 300 Index. It can be seen that this wave of rise began at the end of last year. After the continuous “overbought”, it was the first decent callback. The RSI index was just at 40 points of bull market support The position has temporarily stopped falling – if the upward trend remains unchanged, then the adjustment should stop here and continue to rise next week.


Will A shares continue to rise?

From the perspective of small and medium-cap stocks, this is not a question, but a description of the status quo.

Judging from the six-style index of the National Securities, the growth of small-caps continued to lead the rise in the past week, while the value of the large-caps led the decline.


Therefore, it is not surprising that the CSI 1000 Index continued to rise while the CSI 300 Index was soft.


Judging from the RSI hourly chart of the China Securities 1000 Index, it has not yet experienced a decent correction. Next week, we should pay attention to whether to break through the upper limit or the lower limit of the blue box first.


A pleasing thing is that in the external environment, the 10-year U.S. bond yield is still low and has not rebounded, while the U.S. stock S&P 500 index has hit a new high.


However, I still want to remind you that from the perspective of the “greedy index” of Jiuquaner, A-shares are already extremely greedy at 98 points, and the daily chart is similar to that of the CSI 1000 Index. The RSI is also above 70 points. Forget it.


As mentioned in the weekly closing summary before the Spring Festival, the 30-50 rotation model (for the specific ideas and backtest data of the “30-50 rotation”, please refer to “Is Earl 28 rotation okay? Three new optimizations Direction”. Since the valuation is currently at a low level, I only use 3-week and 4-week rotation in my actual operation, without introducing a timing mechanism) from this week to 50% CSI 1000 Index + 50% CSI 300 Index .

Apparently, this rotation has avoided the fall of the Shanghai and Shenzhen 300 Index and enjoyed the rise of the CSI 1000 Index this week, which is welcome.

According to the model, next week will completely shift to holding the China Securities 1000 Index Fund.

As for the industry momentum model (for the specific usage of the industry momentum model, please refer to the old article “New Upgrade of Industry Rotation, 38% Annualized in the Past 2 Years”), the past week was a week of changes in both large and small stocks and styles, so I will not publish Surprisingly, the three industries tracked before performed poorly and underperformed sharply. The three industries fell by an average of 1.99%, while the 19 industries tracked rose by 0.37% during the same period. Over the past period of time, the excess return of industry momentum has been shrinking. In the past year, it has shrunk from nearly 20 percentage points at the peak to less than 10 percentage points today. The recent twists and turns in the market are still a difficult time for the momentum of the industry. When you can enter the comfort zone, you can only wait.


Next week, we will focus on chips, non-ferrous metals and steel.


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