As heavyweight blue-chip stocks plunged towards their daily limit down, the market's liquidity crisis became increasingly severe.
The systemic financial risks triggered by this also became increasingly apparent.
Therefore, with no other option...
With the Shanghai Composite Index breaking through 3500 points, hitting a new low for this round of adjustment, and plummeting another 7%, while the ChiNext Index, SME Board Index, and CSI 500 Index had already completely flatlined, nearly reaching their limit down.
After the market closed in the afternoon, regulators finally released another series of significant positive news.
According to open market news.
The China Securities Finance Corporation (CSFC) announced that it had obtained trillions of yuan in liquidity support from the banking system.
This trillion-yuan scale of funds will enter the market through various forms, such as increasing credit lines for brokerage proprietary trading.
Subscribing to actively managed public funds, investing in ETFs, and even directly purchasing stocks, to resolve the current market liquidity crisis and prevent systemic financial risks.
At the same time, the China Securities Regulatory Commission (CSRC) also issued two announcements to the market.
First, it required major shareholders of listed companies, as well as shareholders holding more than 5% and executives, not to reduce their holdings within six months.
Second, it requested major shareholders and executives of listed companies who had already reduced their holdings at the high points of the previous bull market to increase their holdings, working together to overcome the current difficulties.
Furthermore, after the CSRC released its announcements, the China Insurance Regulatory Commission (CIRC) also quickly responded to the call to rescue the market.
It proposed encouraging insurance companies to invest in the stock market and acquire significant stakes.
Within just a few hours, numerous significant positive news items once again thoroughly bombarded the market, with an intensity arguably even greater than that of last weekend.
However, having experienced continuous sharp declines despite previous positive stimuli, the market continued its plunge.
This time, even with immense positive stimuli, people no longer believed the market could rebound; in fact, for a while, many investors even began to ridicule these positive market-saving measures.
Su Yi watched as everyone ignored the good news and was overly pessimistic about the market.
He knew that market sentiment had reached an extreme freezing point.
And an extreme freezing point of sentiment, without a doubt, presents an excellent entry point in short-term trading logic.
"It seems... I can make a move tomorrow."
Su Yi browsed through the overall retail investor discussion hotspots across the entire network after the numerous positive news releases, a bright light shining in his eyes, and sighed,
"Hope is always conceived in despair, and reversals are always born from extreme pessimism. The financial market operates in cycles, and ordinary retail investors... what they can't escape or break free from is always the cycle of emotions!"
Greed when rising, fear when falling.
This is an unconquerable weakness in human nature.
And ordinary investors, due to the limitations of their market understanding, unwittingly amplify this weakness.
However, amidst the continued pessimistic sentiment among the vast retail investor group, the institutional analysts, investment advisors, and financial influencers who previously would occasionally warn of market trading risks suddenly made a complete turnaround.
Uniformly expressing clear bullish views and making every effort to deeply analyze the far-reaching impact of various positive policies on subsequent market trends.
Even with this continuous bombardment of positive news.
But with the overall market investment sentiment and confidence remaining extremely pessimistic and fragmented.
The next day, Thursday, July 9th, the major indices of both markets still could not escape the fate of a sharp decline at open, as if the various significant positive news released by regulators had completely failed to influence the market.
"Those strings of positive news last night really were useless."
Seeing all major market indices open with sharp declines, without even a decent gap up, inside the VIP trading room of Huaxin Securities, Financial Street Fuxing Road Branch, an investment client was utterly disappointed by the market's performance, remarking,
"It's truly hopeless; I might as well just liquidate everything and quit."
Thinking this, he didn't wait for the market to officially begin trading.
He immediately placed all the stock shares he held at the limit-down price, resolving to completely liquidate and quit playing.
At the same time.
Seeing the market open with widespread sharp declines and no reaction to last night's positive news, many investors whose psychological expectations had been completely dashed also began to take the same actions as this client.
Amidst the reluctant stop-losses and liquidations by numerous investors.
Burdened by the lower-than-expected opening and continuous low-priced selling due to the collapse of countless investors' confidence.
At 9:30 AM, just as the market entered the continuous auction trading session, the Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index continued their downward plunge.
After that, only a brief 5 minutes passed.
The market liquidity of both exchanges once again entered a state of exhaustion.
Whether small and medium-cap concept stocks or large-cap heavyweight blue-chip stocks, all continued to blindly plunge towards the limit down.
Among them, 'Teli A', the stock Su Yi was watching, once again formed a one-word limit-down pattern, marking its seventh consecutive limit down since July 1st.
Su Yi gazed at the limit-down order block for 'Teli A' on the stock's trading screen, which exceeded 350,000 lots, totaling 345 million yuan in capital.
He began to build his position according to his trading plan.
After transferring all the funds from his stock index futures account into his stock account.
At this moment, his stock account already held over 75 million yuan.
Such a large sum of capital.
For a small-cap concept stock like 'Teli A', with a total market capitalization of less than 3 billion yuan and a float of less than 2 billion yuan, it's impossible to secretly accumulate shares in advance as a hidden player, then do nothing and just wait for other speculative major players to have a change of heart and help prop up and hype the stock.
It must be noted that the formation of any 'monster stock' in the A-share market is always accidental.
It is a situation formed by the combined efforts of various major market players, and the ultimate result of various market factors and emotional boosts.
If, at this moment, he were to directly inject his 75 million yuan into 'Teli A'.
Without controlling the float and without leading the subsequent trend of this stock.
Then, it's highly probable that other speculative funds would also steer clear of this stock and not easily help him 'lift the sedan chair' (prop it up).
Moreover, even if market sentiment were to recover later and various speculative funds wanted to continue speculating on the 'SOE reform and reorganization' main concept, they would most likely prioritize other small-cap stocks with cleaner share structures.
In other words, his current capital size.
Has reached a level sufficient to alter the historical trend of 'Teli A'.
If one doesn't understand stocks and the techniques of short-term market speculation, even if reborn, wanting to bet tens of millions or hundreds of millions on small-cap 'monster stocks' based on past stock price trends to achieve massive profits is simply unrealistic.
Every stock in the market has a limit to the amount of capital it can absorb.
Once that limit is exceeded, and you become the dominant player on the trading screen, if you don't control and drive the price up, no one else will play along with you.
For Su Yi to maximize profits on 'Teli A', he must not alter the historical trend of this stock.
He needs to pay attention to the manner and methods of capital injection, while also achieving a certain degree of control to entice other speculative major players to follow suit and help 'lift the sedan chair'.
(End of this chapter)
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