"It's impossible for it to plummet again. 4000 points is the bottom line for market pullback that regulators can tolerate."
A middle-aged man in a white shirt, hearing Su Yi's alarmist bearish remarks, couldn't help but respond,
"Young man, you can't be overly bearish on the market just because you hold short positions in stock index futures, and incite everyone to cut losses at a low point, can you?"
Su Yi glanced at the other person indifferently and said with a smile,
"Is 4000 points considered a low point?"
"Official well-known media have all said that 4000 points is the starting point of a bull market, how can it not be considered a low point?"
The middle-aged man continued,
"Moreover, the regulatory body's protection of the Shanghai Composite Index at 4000 points is obvious.
They previously twice requested brokerage firms to lower the forced liquidation line for margin accounts, coupled with yesterday's special interest rate cut and reserve requirement ratio cut by the central bank.
Under such strong policy protection, there's no reason for the Shanghai Composite Index not to hold this position."
"Exactly, today the market plunged at the close, but it didn't fall below 4000 points,"
Another man in the trading room also said.
"At this position, it's still not advisable to be overly pessimistic."
Although most people lost money today, some even hit the daily limit down.
But when the Shanghai Composite Index once again faced the test of 4000 points.
Having experienced the previous two times where the Shanghai Composite Index quickly fell below and then quickly recovered, many still stubbornly believed that this time the Shanghai Composite Index would also be able to stop falling and rebound at this position.
Continuing to rebound amidst the positive effects of the central bank's interest rate and RRR cuts, forming a rebound trend, or even repairing the bull market trend.
Of course, investors who realized the strong downside risks in the market and turned from bullish to bearish.
And there were also quite a few major institutional groups that had clearly begun to shift their investment and trading strategies.
Just as this investment sentiment shifted from yesterday's generally bullish trend, gradually developing towards divergence between bulls and bears, and even gradually leaning towards bearish sentiment.
In the evening, positive news emerged again.
According to market news, the Ministry of Finance officially proposed opinions on the method for pension funds to enter the market.
The 'pension fund market entry', which countless investors had longed for year after year, finally materialized, and this will bring hundreds of billions of incremental funds to the market.
The day before yesterday, regulators modified the forced liquidation line.
Yesterday, the central bank urgently cut interest rates and the reserve requirement ratio.
Today, the Ministry of Finance proposed opinions on the method for pension funds to enter the market, and pension fund market entry officially materialized.
One positive news item each day indeed fully illustrates that the regulatory stance on the stock market has shifted from suppressing the market when the Shanghai Composite Index was at 5000 points, to saving the market.
However, the chip structure of the bull market had completely loosened.
Various leveraged funds, countless margin trading positions, were already running for their lives amidst continuous daily limit downs for thousands of stocks.
The rolling knife of longs killing longs had accelerated its roll down from the mountain peak.
Under this situation, relying solely on positive news, without substantial strong intervention, could it truly halt the market's downward trend and hold the so-called 'bull market starting point' at 4000 points?
Many people thought it could.
But the result was...
The next day's market, in response to the positive news of 'pension funds entering the market', didn't even see a decent higher open.
The Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index all opened flat.
While the three main stock index futures contracts corresponding to the A50 Index, CSI 300 Index, and CSI 500 Index showed a clear lower open, and the new open positions, existing open positions, and net short positions for the three main stock index futures contracts all hit new highs.
All these opening patterns.
All indicated the market's weakness, and revealed the fragility of the bulls.
"Sigh... such great positive news, and not even a higher open."
In the VIP trading room of Huaxin Securities' Financial Street Fuxing Road branch, the man who had debated with Su Yi yesterday, believing the Shanghai Composite Index would hold 4000 points.
Now seeing that the Shanghai Composite Index had no reaction to the positive news at all, especially seeing his own held stocks drop significantly by 3 percentage points at the open despite the positive stimulus, his emotions instantly broke down a bit,
"Where did all this selling come from? This drop is completely illogical."
"This open is severely below expectations."
"Are some funds deliberately crashing stocks and then profiting by shorting stock index futures? In these two trading days, the number of open positions in stock index futures has truly surged a bit excessively."
"With such an open, the Shanghai Composite Index at 4000 points is truly in danger."
Seeing the market's complete lack of reaction to last night's positive news, several large investors in the trading room with heavy stock holdings had their emotions somewhat collapsing, with complaints rising one after another.
"Old Lin, shouldn't you reduce your positions in your stock account?"
Amidst everyone's complaints, CEO Deng, who was already clearly bearish, glanced at Lin Minghui's stock account, which still had over 50 million in position value, and said.
Lin Minghui replied,
"I'm already reducing them. I originally hoped the market would open higher today to give me a better point to reduce positions, but who would have thought... sigh, the market trend is really weak.
There was no reaction to the positive news. Many stocks that hit the daily limit down yesterday, unbelievably, opened with a flat-line daily limit down today. With this kind of pattern, it would be strange if it didn't fall."
Before, he had thought that he wouldn't reduce positions or be bearish until the Shanghai Composite Index reached 6000 points.
Now, seeing the Shanghai Composite Index tottering at 4000 points, he truly had no confidence in a bull market anymore, and no longer expected the Shanghai Composite Index to return to 5000 points.
Thinking of this, Lin Minghui couldn't help but turn his gaze to Su Yi.
In the past half month or so, if not for Su Yi's continuous bearish outlook and short-selling influence, his views probably wouldn't have changed so quickly; he might even have added long positions at 4000 points to gamble.
Su Yi noticed Lin Minghui's gaze, but he did not respond.
At this moment, with his hand on the keyboard, he was waiting for the market to enter the continuous bidding trading phase to find an opportunity to continue shorting stock indices.
As he waited, a few minutes later, the market entered the continuous bidding trading phase.
The three major indices: the Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index, only flashed red for a moment before being immediately suppressed below water by surging selling pressure.
After that, in just three short minutes.
The Shanghai Composite Index plummeted to a 2% decline, breaking below 4000 points.
As for the Shenzhen Component Index, ChiNext Index, and CSI 500 Index, they all fell to declines of over 3%.
In a blur, countless investors hadn't even reacted, and the market was already in a state of freefall, with hundreds of stocks hitting the daily limit down.
After that, when the Shanghai Composite Index fell to nearly a 3 percentage point decline.
The bulls organized several consecutive counterattacks, hoping to retake the 4000-point mark and rekindle bullish market sentiment.
However, it was all in vain.
Each time the Shanghai Composite Index approached 4000 points, it would encounter even stronger selling pressure.
And Su Yi, each time the Shanghai Composite Index approached 4000 points, would short 10 lots of the CSI 500 Index futures main contract to "encourage" the Shanghai Composite Index to return to 4000 points.
Under the continuous counterattacks of the bulls, which appeared tenacious but were in fact weak.
When the time reached around 1:30 PM, and the Shanghai Composite Index still hadn't broken through 4000 points.
The market's remaining bullish confidence and bull market conviction finally completely collapsed, no longer able to withstand the continuous selling pressure from bears.
Consequently, after 1:30 PM.
The market's unilateral plummeting trend, reappeared.
The Shanghai Composite Index once again broke through the 3% decline mark, while the ChiNext Index and CSI 500 Index headed straight for the 5% decline mark.
And amidst the index's plummet.
Market liquidity also continued to sharply decrease, with countless stocks continuously hitting the daily limit down.
By 2 PM, the market once again saw the phenomenon of 'thousands of stocks hitting daily limit down'.
Alarms at countless brokerage firms' and off-exchange margin lending companies' account data centers rang out one after another, countless margin and leveraged investors wailed in despair, liquidated accounts, amidst the market's avalanche-like trend, once again showed exponential growth, market liquidity crisis reappears!
(End of Chapter)
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