$Oriental Fortune (SZ300059)$ $Muyuan Shares (SZ002714)$ $Minhe Shares (SZ002234)$
When the disk changes, the plan is not as good as the change. Although the short-term trend cannot be predicted, the major trend direction can be basically determined. A few days ago, I published an article “Writing at the Dawn Before the Bull Market Started”. The main judgment is based on the fundamentals and the trend of the weights of the Shanghai Stock Exchange 50, CSI 300 Medium and Large Finance, and real estate, but it backfired and was interfered by the external environment. And the sell-off of the high-level track, as well as the negative impact of brokerages, originally had the opportunity to get out of the technical side of the bottom of the W on the Shanghai Stock Exchange, and was smashed down abruptly. At present, the technical averages have been twisted, and it will take quite a long time to repair multiple moving averages, and the trend has made some new changes. But no matter what, I still insist that the bull market is not far away, and it is currently in the dark before dawn.
I. Sufficient Conditions for Fundamentals
1. The economy is bottoming out . Due to the Shanghai epidemic, the PMI index was at its lowest point in April. After rebounding in May and June, it pulled back again in July, but it started to rise in August (Figure 1), and the trend began to reverse. Although the epidemic has repeated, its negative impact on the economy will gradually diminish marginally. Later, with the advent of new crown preventive drugs, the situation will gradually be reversed, and consumption will recover slowly.
The economy has bottomed out and the profit margin of enterprises has improved, especially as the real estate becomes financially independent, the cost of land and rent will be reduced, and the gradual reduction of interest rates will increase the profit level of enterprises. This is the basic condition for the start of the bull market.
2. Massive funds require reservoir sedimentation . According to the latest data released by the central bank on September 9, M2 currency increased by 12.2% (Figure 2), while the CPI and PPI both fell in August, indicating that the demand side and the supply side were both sluggish, and the market money neither flowed into the consumer market nor did it. into the production supply chain. Especially recently, the central bank has lowered the deposit interest rate. The loose currency and ultra-low deposit and loan interest rates cannot flow into the consumption and production side, but the financial system is idling, and it is easy to fall into the Keynesian “liquidity trap”.
The history since 2006 shows that whenever the growth rate of M2 exceeds the 12% range, the property market will always rise vigorously. , then the huge amount of funds will inevitably need a reservoir to settle, and this reservoir can only be the securities capital market in addition to the real estate market. Ample and abundant funds are a prerequisite for a bull market, and only with active funds is it possible to start a big market.
3. The undervalued blue-chip margin of safety is sufficient. The valuations of financially weighted sectors such as SSE 50 and CSI 300 have all fallen to the historical score range below 25%. These weighted sectors are suitable for large capital and long-term capital inflows, and have reached a relatively low percentile in history, with a high margin of safety.
4. The appreciation of the offshore RMB exchange rate is the basis of the bull market. Comparing the RMB exchange rate and the Shanghai Composite Index trend chart, it is not difficult to find that each bull and bear market of A shares basically corresponds to the appreciation and depreciation of the exchange rate. Sometimes there may be a trend inflection point where the stock market predicts the exchange rate in advance, and capital runs away in advance. However, in general, the bulls and bears of the stock market have a strong correlation with the appreciation and depreciation of the exchange rate. The picture below shows the comparison between the offshore RMB exchange rate and the Shanghai Composite Index. Each larger bull and bear market in the box corresponds to the rise and fall of the exchange rate.
So, how will the exchange rate move next? The USD/CNY exchange rate should be pegged to the USD trend. Below, we analyze the trend of the US dollar index from the fundamental and technical aspects.
(1) Fundamentals : The U.S. inflation data in August slightly exceeded expectations at 8.3% (previous value 8.5%, forecast 8.1%). The market believes that the Federal Reserve will continue to aggressively raise interest rates in September, causing the US dollar index to soar and the RMB exchange rate to break 7. Although the U.S. CPI slightly exceeded expectations, observing the bear market of international oil prices and commodities, the trend of the U.S. CPI has indeed begun to turn downward, and the follow-up still needs to observe the trend for confirmation. Considering that the United States has entered a recession, the number of unemployed has climbed, and the yields of long-term and short-term government bonds have been inverted for a long time. It will greatly increase the cost of issuing new bonds, overwhelming the already serious deficit of the US government. It is very likely that the Federal Reserve will gradually slow down the pace and intensity of interest rate hikes after the expectation of the downward trend in CPI is confirmed, and even do not rule out gradual interest rate cuts in the future, which will lead to the weakening of the strength of the US dollar, especially the gradual fluctuation of the petrodollar.
(2) Technical aspects : The US dollar index will have signs of making a big monthly top. It can be observed from the rising channel of the monthly chart of the US dollar index that its possible top position is around 112. The recent rebound in the US dollar index at the daily level may also be the end of the game.
Looking at the USD/CNY (off) exchange rate trend, although it has broken 7, breaking 7 has no practical significance, it is just a psychological barrier and an emotional inflection point. However, judging from the trend, this wave of devaluation has basically completed the five-wave uptrend, and has basically reached the end of the five-wave market. 7.2 is the ultimate pressure level for the RMB exchange rate (since 2008, it has not depreciated below 7.2).
2. Necessary conditions
1. The pension that cannot make ends meet needs to be maintained and increased in value. The A-share currency reservoir has long been delineated by high-level officials, but the main reason why it has not been implemented is that it is waiting for pension funds to open positions. With the acceleration of aging, pensions will inevitably face a lot of pressure on revenue and expenditure. How to maintain and increase value is a very urgent realistic proposition. Therefore, it is a matter of course that the stock market digs a hole for pensions to enter the market. According to the time, this part of the funds should be at the end of the construction of the warehouse. The benefits of the “full registration system” that have not been issued by the high-level executives are the ultimate gift for these funds. This year’s government work report of the two sessions put forward: “The full implementation of the stock issuance registration system will promote the stable and healthy development of the capital market.”
On August 1, Yi Huiman, chairman of the China Securities Regulatory Commission, published an article in the magazine “Seeking Truth” stating that “the conditions for a comprehensive registration system have been met.”
It is foreseeable that at a certain time in the future, the package of full registration system may suddenly land.
2. Economic transformation and upgrading and the promotion of consumption require a prosperous capital market. At present, the global economy is declining, foreign trade is under pressure, domestic consumer confidence is insufficient, the driving effect of investment in infrastructure is diminishing, and the “troika” is under pressure. Loose masses of money idling in banks, neither consumed nor used for production, could easily fall into the Keynesian liquidity trap. Therefore, it is very necessary to introduce capital into the capital market in an orderly manner, because a prosperous capital market can not only create blood for economic transformation and upgrading, but also the money-making effect of the capital market can also stimulate household consumption and consumption upgrading, which is conducive to promoting the transmission of currency and opening up Intestinal obstruction, avoid falling into a mobility trap.
3. The stimulus of the policy spree after the event. As we all know, some policy packages are usually released after the grand event to promote the rapid development of the economy, especially some new infrastructure plans with a large multiplier effect, and scientific and independent technological breakthroughs in the national system. As the so-called “mountains and rains are about to come and winds fill the building”, you can pay attention to some policy news in the near future.
3. Talk about the possible trend of the broader market
At present, here is the 2-wave pullback before the bull market started. Considering that the moving average system has formed a complete short position again, it will take a long time to reverse the moving average system, and the bottom of the index cannot be achieved overnight. There must be an acceleration from the decline to the Slow down, and then reverse the process. Then I draw a prediction map according to the optimistic and pessimistic trends:
(1) Optimism. The callback limit is around 3080-3050 (0.618 callback)
(2) Pessimism. The callback limit is around 2950 (near the rising national transport line).
Judging from the trend of A shares in the past 17 years, this monthly upward trend line (national fortune line) has never fallen below, and there will always be an invisible hand supporting the bottom. Once it falls below, it may be a real comprehensive systemic risk. , this probability is very low. In March of this year, I predicted that the bottom of the broader market this year may be around 2850 (up and down 40 points) “Combining fundamentals and technical aspects to talk about the trend of the market and plate opportunities” (clickable), accurately predicted that the bottom in April would be 2863.65 points. (As shown below)
All in all, the current trend is very similar to what it looked like in early 2014, and the fundamentals are similar. At this time, at the bottom of the market, we need to have a broader vision and vision, and make strategic investments.
Fourth, talk about this round of tangled pig cycle
According to the trend of the past pig cycle, pig stocks basically have three trends: speculation stage (the spot price of pork bottoms out, and energy production begins to detoxify), the cycle reversal stage (the pork spot begins to reverse), and the performance cashing stage, usually the cycle reverses. The stage is the main rising wave with the largest increase in pig stocks in general. However, in this round of the pig cycle, except for a few superstars, Huatong and other pig stocks that have doubled their market prices and walked out of the main upward trend, but most of the pig stocks, especially the big ones, are basically lying at the bottom, and the pork spot has already been de facto Reversing, it seems that shares are a little behind the pork spot. This is what frustrates and finds difficult for all pig cycle investors.
Careful friends, you can further study the stock price trend of the pig cycle over the years, and find that the pig stocks must meet two conditions to go out of the main wave: one is that the market is dominated by the bull market; the other is that the expected reversal of the pig cycle is consistent.
At present, these two conditions are not actually met. Condition one is still in the process of stepping back in the second wave, and the market has not yet reversed.
The second condition is that the official thinks that the stock of breeding sows is high and does not have the basis for a big rise. The market still thinks that it is possible to dip three times. In short, the market is very divided, and there is no consensus. Unlike at the beginning of 2019, although the reproductive capacity is still decreasing, but through research on the market, swine fever is still occurring, and there is a general shortage of pigs, so the expectations are very consistent. So, how can we break down the differences between the parties and form a consensus expectation? The author believes that only when the pork spot reaches a new high and goes out of the trend market can the consensus be formed.
As shown in the pork spot shown in the figure, after the pork spot bottomed out on October 6 last year, it began to rebound until it reached a high point on November 28 before bottoming out twice. From the perspective of an economically rational person, from October 6th to November 28th last year, the breeding rate of live pigs will increase, and the reduction of production capacity will slow down. Once the spot price drops to the bottom twice, the production capacity will accelerate again. , the breeding rate decreased. Therefore, corresponding to 10 months later – from August 6 to September 28 this year, the supply of live pigs should be relatively abundant and flat. Once September 28, the supply side will shrink at an accelerated rate, while the demand side at the end of the year will shrink. Outbreak, which will lead to the arrival of the main surge in the pork spot.
From the trend chart, the pork spot has been fluctuating sideways since it bottomed out and broke through the previous high of 18 yuan in March this year, and there has been no significant correction in the off-season. It is conceivable that once October, with the contraction of supply and the growth of demand, there is a high probability of double-click growth in prices.
I will continue to cheer up my friends who hold pig stocks and chicken stocks: the valuation of farming is very low now, and the marginal safety factor is relatively high. Wait patiently for the arrival of the main wave of the cycle. The cycle will only be late, but it will never be absent! good luck. (The above views do not serve as investment basis)
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