[Red Packet]0316: Ending the Winning Streak, A Brief Discussion on the Application of Call Auction in Practical Trading!

Since entering Tao County Open Market Trading in March, over 11 trading days, with 9 wins and 2 losses, strategies are announced before the market, real-time operations are shared during trading, and post-market analysis and review are provided—always committed to sharing insights like a horse racing tipster. [Taogu Bar]
No need for much nonsense, let’s start with intraday trading.

Today, only opened a new position in Guosheng Technology.

At 9:46, I clearly mentioned in a comment that Guosheng’s second buy consideration would be taken into account. After speaking, I personally saw good support and added some core positions. The key with this batch-by-batch buying method is to watch for support, which I explained clearly in the dry goods post on March 7, so I won’t repeat it here.
Continuing to hold Guosheng on the board for two reasons:
One, in the morning session, whether it’s power or chemical sectors, the old sectors are underperforming expectations (later I will explain why through auction data), which forces funds to form groups based on recognition. This grouping cannot be combined with sector effects. The other reason is to continue mimicking chart patterns.
For example, last Wednesday, I identified several chart pattern seeds.

The above is a review article from last Wednesday. It wasn’t until today that Falshing hit three consecutive limit-ups and Guosheng hit two limit-ups in four days that funds started to realize the arbitrage opportunities in individual stock patterns. Guosheng was openly discussed during the trading session last Wednesday, and Falshing was publicly involved last Thursday. Although Falshing’s stock was hammered and sold off on Friday, we can’t deny the practical effect of this approach in the current “mole-whacking” market.
Especially today, with various sectors underperforming expectations, even fans are slowing down. So, we need to think more about which stocks are being grouped together in this mole-whacking market—focusing purely on individual stocks and chart patterns. As for logic or sector themes, let’s set them aside for now. Until a theme resonates with the index, this approach will likely continue. So, from now on, abandon sector thinking and focus more on individual stocks.

Next, I want to explain why I said that the power and chemical sectors in the morning were below expectations.

Since sharing on Taogu Bar, I often judge overall sentiment after the auction closes, for example last Friday:

The sentiment anchor last Friday was definitely Green Development and Han Cable. Green Development was the first to hit the limit on Thursday, and Han Cable drove the entire market back with a high-movement anomaly.
But both performed well below expectations on Friday’s auction.
First, Green Development, during the auction, was bid up in a straight line by funds, but this was below expectations. I explained this in last Friday’s review article; here is a chart.

The above chart clearly shows Green Development’s auction behavior. Starting at 15 minutes, Green Development kept withdrawing orders, reflecting divergence among off-market funds. They didn’t dare to push through the orders aggressively. After 9:20, off-market funds started adding orders, but at the same time, on-market funds began to cash out. From 20 minutes onward, the auction volume increased, indicating on-market funds’ divergence.
When both on- and off-market funds are not optimistic, it means Green Development’s overall auction performance is below expectations.
If the auction is below expectations, we need to see if it corrects during the trading session. The intra-day movements of Green Development and Han Cable set the foundation for strong intra-day divergence. The correct approach is to retain the right to sell, only sell, not buy, as I mentioned before the market opened on Friday.

For example, today:

After the auction, the power sector still underperformed expectations. Brothers should observe more and not rush to open positions.
First, the sentiment anchors today are definitely Zhongnan Cultural and Yunnan Energy.
Pre-market expectations for these two are:

First, for Zhongnan, there should be buy orders before 9:24, and the last 30 seconds can be extended by sector divergence, but the closing auction price should be near the limit-up.
Only then can it show strong fund support.
Zhongnan Cultural, at the end of the pre-market auction, only opened around 5%, which is the first disappointment.
The second disappointment is Yunnan Energy, which opened with a gap down but only around -3%. This kind of gap-down is a signal that funds want to exit. In the auction, a gap-down either opens with a deep gap or a high open, leaving room for bottom-fishing funds. If it opens at -2% to -3%, it shows a lack of sincerity from funds.
The third disappointment is GCL Energy Technology, which yesterday held firm despite divergence, but today failed to lead with a high open and was dragged down by the sector, ending the auction without turning red.
These three signals indicate that the power sector continues to underperform expectations. Even if there is some weak recovery during the day, it’s a sign to exit, as I emphasized before the market opened.

I also mentioned pre-market that if the power sector underperforms, I would consider trading in Jinniu Chemical.
But in my view, the chemical sector’s pre-market auction was also below expectations.

First, Sanhexiang, which surged at the end of yesterday, opened at the limit today.
But last Friday, Sanhexiang was still a supporting role pushed by funds, driven by strong stocks like Jinjing and Jinniu Chemical.
Today’s overperformance of Sanhexiang should correspond to Jinjing’s straight-up move and high open of Jinniu Chemical.
However, Jinjing opened around 6%, and Jinniu Chemical opened flat. This indicates a weaker-than-expected strength. As I mentioned earlier, auction performance below expectations requires intra-day confirmation, and the key stock to watch is Baichuan.
Baichuan opened with a big gap up but then sharply declined. With such a movement, a quick glance makes it clear that the chemical sector is likely to open high and then fade during the day.

From my personal perspective, during the auction, don’t just focus on the stock’s rise or fall; don’t pay too much attention to signals. Focus on these points:

1. The strongest sector and the strongest stocks within it, as anchor points. If they exceed expectations, consider arbitrage in recognizable stocks within the sector; if they meet expectations, observe for fund inflow during the day; if below expectations, retain the right to sell.
2. Watch the overall short-term sentiment anchor points, such as Yunnan Energy, which is the leader in the power sector. Today’s performance is crucial—first, to see if it hits the limit-up to boost sector confidence, and second, whether Yunnan Energy actively recovers, even if only in red, to give sector confidence. But it hasn’t met expectations.

There are many other points about auction performance, but digest these first. This is also why I took profit on the power sector last Friday and why I no longer consider the power and chemical sectors today. First, learn to read the market, avoid pitfalls, and focus on defense before offense.

Thanks to friends for their points rewards:
@ZhiXinNewBrother @CaiDaoZhiJian @TaoguOldSun @TimeShareSeagull @Sanderay @ChivesCultivate @SpringFlowerO @YALYangFan @FlameAlwaysDouble @XinLuManMan @OrangeZz @NewChivesSprouting @TaoguSmall111 @H111c @RunningChives @Happy820958 @YaoYaoO

Thanks also for the support coupons:
@MengZhengXiaoSheng @ChaoGuoQuChaoWeiLai @MingXiaoShao @YaoYaoO @WaitMe @TradingSuper @H111c

Brothers, the market isn’t good, no need to spend on tips. But a free like helps a lot—I’m just powering with love. If even likes are below expectations, I’d feel it’s not worth it. Thanks to the 260 likes so far. Data target reached, pre-market ➕ and during the session tomorrow.