Hello everyone, today is Wednesday, September 4th, and most global stock markets have declined today. What exactly happened when the A-share market broke a new low of 2781? The four major reasons have been identified, and what will happen next in the A-share market? Please listen carefully and patiently, and I believe you will gain clarity.
Firstly: Today, on Wednesday, most global stock markets declined. Last night, all three major U.S. stock indices fell, with the Nasdaq Composite Index plunging by 3.26%, the S&P 500 down by 2.21%, and the Dow Jones Industrial Average down by 1.51%. The decline in U.S. stocks was mainly due to the release of U.S. data last night that did not meet expectations. The relatively weak U.S. data has therefore sparked concerns about a slowdown in the U.S. economy. This is the main reason for the decline in U.S. stocks.
Last night, NVIDIA plummeted by nearly 10%. NVIDIA has recently formed a triple top rounded top pattern and has not set a new historical high. Both the S&P 500 and the Nasdaq Composite Index show signs of a short-term M-top. There are still signs of adjustment in the short-term U.S. stock market, especially since it is at the stage of a triple top, M-top, which is a signal of a top.
Secondly: Today, at the opening of the Asian market, the Taiwan Weighted Index once plummeted by more than 5% and closed down by over 4.4%. The Nikkei 225 Index fell by more than 4.3%, the South Korean stock market opened low and continued to decline by nearly 3%, and the Australian stock market opened low and continued to decline by nearly 2%. The Asia-Pacific stock markets also saw most of the selling, of course, also affected by the U.S. data that did not meet expectations and the weak U.S. data. Among them, the Japanese stock market fell by more than 4.2%, and recently the Bank of Japan also mentioned again that if the economic and price performance meets the central bank's expectations, there may still be a possibility of maintaining interest rate hikes. This is the second reason.
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Thirdly: Recently, after the U.S. Dollar Index fell to 100.5, it entered an oversold rebound. The U.S. dollar ended its five-day oversold rebound and returned to the vicinity of the 20-day moving average. The continuous rebound of the U.S. Dollar Index has a negative correlation with global commodities and global stock markets. This is the third reason for the decline in global stock markets.
Fourthly: So today, as expected, the A-share market continued to break new lows at 2781, with 1,500 companies rising and 3,700 falling. Among them, 38 companies hit the daily limit up, and 26 hit the daily limit down, with the main force funds net selling nearly 20 billion. Today's Wednesday A-share market still maintained a weak and volatile sell-off. So why did the number of falling stocks far exceed the number of rising stocks in today's A-share market? It is no surprise that the peripheral stock markets fell and the A-share market followed suit. Today, there were more falling stocks than rising ones, what happened?
This is still due to the continuous rebound of the U.S. Dollar Index, and correspondingly, commodities will enter an adjustment state. Last night, crude oil plummeted by nearly 5%, and crude oil has continued to fall, losing all the gains of the first half of the year. Including copper, which has also continued to dive and sell off, spot silver, and spot gold have also continued to fall from high positions. The continuous adjustment of commodities has affected the A-share market's oil extraction, precious metals, copper, aluminum, lead-zinc, minor metals, and gold concepts, and these sectors have all fallen by more than 1%. The banking and high dividend sectors have also fallen, and coupled with the decline in the sectors corresponding to commodities, this is the fourth reason for the majority of stocks falling today.
Fifthly: So the question arises, where will the A-share market go next?
Firstly, we can see that the Shenzhen Component Index is still above the 5-day and 10-day moving averages, still in a small rebound within the large positive line of last Friday, without breaking a new low.Secondly, the CSI 1000 and the ChiNext Index are also above the 5-day and 10-day moving averages. They are similarly supported within the large bullish candle from last Friday to continue their consolidation and rebound without setting new lows, so a continuation of the rebound can still be anticipated.
Lastly, there is still a catch-up decline in the weight indices of the SSE 50, CSI 300, and Shanghai Composite Index. Since the banking sector, high-dividend stocks, and the commodity sector have all entered a catch-up decline phase, the weight indices remain in a state of catch-up decline. In any case, today the Shanghai Composite at 2781 will provide short-term support, and the downtrend has not ended, with 2738 being the support at the golden ratio of 0.191.
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