[Red Packet] Ninth Consecutive Week of Sweeping Liquidations, Receding Tide Whack-a-Mole Market - Can Energy Storage Break Through?

This week, the core energy storage stocks that I was watching at low levels continued to break through against the trend on Friday, maintaining their pattern. On Tuesday, I focused on PCB core stocks like Jin’an Guoji at low levels, which were underperforming. On Thursday, I paid attention to computing power stocks like Litong Electronics at low levels. Today, I have already taken profits on all of them.

This week, I changed my approach. I started from the core expectations of institutional slow trend flows and contrarian logic, rather than following the trend. Although I didn’t manage to significantly increase my gains—it’s a risky game—it’s already quite difficult compared to the recent six-day market-wide decline. I hope next week the market won’t break down but will instead turn for the better after such a prolonged decline.

1: Ninth consecutive week of no significant highs, a “whack-a-mole” market
Since the market downturn in early January caused by the retreat of commercial aerospace, we’ve seen nine consecutive weeks dominated by quantitative, low-volatility “whack-a-mole” internal competition, often mixed with continuous declines.

For example, mid-January, the retreat of AI applications in commercial aerospace led to a sharp decline, exemplified by Haige Holdings hitting the limit down in a single day, along with core stocks like Aerospace Development and Shen Yu Shares. At the end of January, the silver and gold sectors, represented by White Silver, Gold, and Hunan Silver, experienced continuous declines. Around February, AI application stocks like Bona Film faced retreat. In March, the market saw a shift to risk-averse sectors like military industry and non-ferrous metals, which rebounded, followed by rebounds in oil and gas last week, and chemical stocks this week. The attack direction in March was highly rotational, with a different sector leading each day—no day was the same. From last Friday to this Monday, there was a six-day continuous decline across sectors like power, domestic computing power, storage, PCB, and CPO.

Although the indices seem to be near new highs, the true market sentiment has been declining for nine weeks, hitting new lows compared to December last year. The indices are distorted. As expected, the distorted indices started to decline again last Friday, continuing for six days, with a collective retreat in sectors like power, domestic computing power, storage, PCB, and CPO.

Comparing the two index charts below makes it clear: the persistent difficulty and fragmentation of the past nine weeks are among the worst in recent years. Under this market sentiment, even top-tier liquidity providers like Yu Ge from the previous Dragon and Tiger list have disappeared, and other leading traders also feel frustrated. Some excellent real-money traders are also affected. In this environment, it doesn’t matter who you are; the only option is to endure patiently and focus on the core strengths built during the market’s normal high levels from May to December last year to weather this winter.

2: Market analysis
Today, the index continued to break down, losing the 4,000-point level. Nearly 4,800 stocks declined, only about 600 slightly rose. The real sentiment index broke down again, showing a sharp decline. The previously distorted indices this week also began to reveal their true nature through further declines.

Sector analysis:
Risk-averse sectors:
Gold, silver, oil, gas, chemicals, and non-ferrous metals opened lower today due to last night’s external futures decline. These sectors are highly correlated with futures, which are unpredictable and mainly driven by sentiment arbitrage—easily falling when futures fall. As futures are declining, these sectors also continue to retreat. Silver, gold, and non-ferrous metals like Hunan Silver, and oil and gas stocks like Source Energy, Intercontinental Oil & Gas, and chemical stocks like Jinniu Chemical all experienced collective declines. Previously, these sectors served as safe havens during index declines but are no longer acting as safe havens.

Attack sectors:
The main attack sectors are domestic computing power, AI (Nvidia industry chain), PCB, CPO, storage, and power. Over the past two weeks, these sectors have been highly rotational, with one sector leading each day. The internal movement within sectors is also highly fragmented and volatile, with no clear high. Last Friday, power stocks declined; Monday saw PCB and storage lead; Tuesday was a broad decline; Wednesday and Thursday saw rotations in computing power; Friday focused on CPO and energy storage, which are highly volatile but somewhat better than the continuous retreat of safe-haven sectors.

Liquidity provider sentiment:
Remains sluggish. Despite some high points, the overall pattern is one of stagnation and weakness, with repeated suppression of high-flying stocks. The recent six-day decline in indices suggests that it’s better for the market to follow the sentiment and decline together rather than resisting. Breaking the deadlock is possible, and the current market still operates under institutional slow trend flows. Today’s relatively contrarian energy in the energy storage sector is one of the few active areas against the trend.

3: Final thoughts
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Personal style:
Focusing on the core sectors for market breakthroughs! Minimal but precise operations! Belief in leading stocks! Not aiming for 100% win rate, but overall making small profits with small losses!

Please note: The personal opinions expressed are for personal record and reference only and do not constitute investment advice.