[Red Envelope] Power computing power group buying front row slowly emerging from long-lost continuity is not easy, market breakthrough hope is right in front of our eyes

Head of the Battle Strategy vs. Arbitrage Mode
Feeling comfortable, today I continue to clear the clouds and see the sun. Hanlan Co., Yunnan Energy Holdings, and Huasheng Tiancheng remain strong, gradually improving. Last Wednesday, Huasheng Tiancheng was quietly accumulating at low levels for 7 days; on Monday, the dual power grid pattern of Yunnan Energy and Hanlan at low levels has lasted 4 days. The core market focus on large waves lies in this, as long as the market returns to normal, the rhythm will gradually come back. Over the weekend, the main post’s bullish view is hopeful for breakthroughs in computing power and electricity sectors. Huasheng Tiancheng leads the core front, with Hanlan and Yunnan Energy as the dual power grid breaking through, demonstrating that the strong get stronger.

Including many previous students who saw Huasheng Tiancheng’s intraday time-sharing strength was not as strong as Tuowei, thought Huasheng Tiancheng was capped by Tuowei. Actually, that’s not the case. I said Tuowei was just a follow-up rally for Huasheng Tiancheng. Once the market cycle and sector status are confirmed, surface strength in intraday charts doesn’t matter. I even gave the example of last December’s commercial aerospace cycle with Aerospace Development. Recently, everyone has seen that Huasheng Tiancheng’s counter-cyclical sector-driven resilience and strength are much better than Tuowei. So, intraday strength or weakness is superficial; to understand the underlying market sentiment, position, and the market’s assigned historical mission, one must look beyond the surface.

In the first and second months, many excellent retail traders faced the same miserable situation—no one could succeed. As long as last year’s attack phase in the high-cycle months of May to December was strong enough to build a foundation, then the market’s two-month decline in January and February, caused by the lack of a high cycle, should be viewed with normalcy. Cycles vary in size; don’t doubt your model. The next high-cycle market will continue upward, maintaining a trend of oscillating upward.
Avoid falling into the trap of seeking a 100% win rate or perfect strategy. Watching arbitrage traders occasionally make small profits in a low-cycle market, while your own attempts at trying to catch the leader’s belief in a low-high environment lead to errors and setbacks, can cause doubt in your leader-based strategy. But, in the long run, the leader strategy’s errors during low cycles—when there is no high cycle—are easily offset by the continuous, seamless attack power built during the main upward phases, like Mount Everest.
There’s no need to envy those arbitrage traders who seem to make small profits by escaping tops in low-cycle markets; they often appear brilliant but are just lucky. When the market is in a good upward phase, arbitrage traders tend to guess tops subjectively and miss the opportunity, often falling behind. Conversely, in a low, emotionless “whack-a-mole” market, arbitrage may seem to make small profits by escaping tops, but the leader strategy often suffers from large drawdowns caused by big-picture misjudgments.

Remember, first, in a T+1 market, you cannot sell on the same day you buy. Second, in a low-volatility, “whack-a-mole” environment, the tolerance for error is very low, and the market is highly competitive. You might escape a top once, but with low tolerance and T+1 constraints, losses are inevitable. Over the long term, high-frequency quantitative trading often outperforms. I’ve seen many arbitrage teachers, in October with solid-state storage, November with the Strait, December with aerospace, fail to build enough attack power during critical phases due to subjective top guesses, resulting in only small profits. During these seven weeks of low-volatility decline, the pressure to attack is high, but the market is fragmented, often turning against quant strategies, causing missed opportunities and unnecessary losses. The root cause is a lack of objective market follow-through, and even a slight mistake in T+1 can lead to traps like the ones in Hegeli, Silver Nonferrous, Hunan Silver, Julli, BONA, Yingye, and others last week, resulting in small profits or losses.

In contrast, during last year’s very good market in October, the storage sector, Sanlongjiang, Boli, Demingli, Shennong, and Xinchuang cycles, and the solid-state crossing the Tianji cycle, all built substantial attack power. In November, the Strait and Pingtan cycles, and in December, the overall aerospace development, the big princes Tongyu cycle, all delivered enough strength. Even during January and February, with seven weeks of low-volatility, the strategy avoided the pitfalls of continuous big traps like Hegeli, Silver Nonferrous, and Hunan Silver, and despite some errors, the long-term results were mostly profitable or small losses.

2: Market Analysis
The index oscillated and closed lower, with a volume of 24 trillion. In the opening auction, Jilin Chemical Fiber’s large order was a straight line, but the sector didn’t show momentum afterward. After opening, the computing power sector surged then retreated; risk-averse sectors like oil and gas experienced rotation and recovery, but their logic was weak. Last week, after being eliminated by the market, the oil and gas sector was mainly a weak, counter-trend recovery driven by oversold conditions. So, early in the day, oil and gas stocks like Tongyuan Petroleum and Intercontinental Oil & Gas rose temporarily but then fell back, trapping traders. I’ve always said not to look at or touch this sector because oil and gas are essentially passive follow-ups of futures, with weak logic and driven mainly by emotional reactions. The龙虎榜 (top traders list) shows only quant funds and retail chasing, similar to the late January retreat in silver and gold, which proved to be a trap.

Although the risk-averse sector was eliminated early, the market’s shrinking volume means that even in the remaining sectors, rotation remains fragmented. Last week, rotation among electric power; Monday, domestic computing power; Tuesday, AI and NVIDIA industry chain; Wednesday, new energy, lithium batteries, photovoltaics, and energy storage; Thursday, quantitative rotation into the LED sector. But this morning, the slightly better-performing sector was electricity, with Hanlan Co. leading the rebound after three days of rest, signaling a break and a stance of breaking the deadlock. Small-cap stocks like Sanhua and others followed, and in the afternoon, Jinkai New Energy and China Energy Construction also rose, with market sentiment rallying and the index bouncing back.

Whether the market can successfully break through after seven weeks of low-volatility depends on whether the computing power and electricity sectors, representing the computing-electrical coordination, can break the deadlock. Otherwise, constant rotation within sectors and the lack of high-level attempts will only lead to stronger internal competition, intensifying the cycle of internal strengthening without reaching new heights.

3: Final
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Personal Style:
Focus on the core leaders for market breakthroughs! Fewer but more precise trades! Belief in leaders! Win rate may not reach 100%, but overall, the mode is to make small profits with big gains and small losses!

I declare that my personal opinions are for personal record and reference only and do not constitute investment advice.