Ebb tide, wind bias control, is the most important time for short-term traders to control drawdowns.

I wrote for a long time, but I don’t use the computer much, pressed the wrong key, and all the content was gone. [Taogu Ba]

Today’s review will be simpler, just discussing the core points of the pullback.

In fact, last Friday, Yunnan Energy Control’s underperformance already marked the start of Phase 1 of the pullback. But this level is still somewhat confusing: Zhongnan Cultural is strong, Jin Niu Chemical, Guangxun Technology, China Electric Power Construction, South China, and a bunch of low-priced stocks are still hitting daily limits;

This is where Phase 1 of the pullback confuses traders. I’ll share the standards I’ve used for a long time, which have always been accurate:

1. Leading stocks hit the limit down, falling below the 10-day moving average; (Yunnan Energy Control broke the 10-day today)
2. High-flying stocks start to show significant negative feedback, spreading out; (Today’s opening saw clear negative feedback spreading!)
3. Mid-cap stocks experience large declines with weak recovery strength (if recovery strength is strong, that’s a different scenario)
   (Here, mid-cap stocks are actually the least safe; many traders see mid-cap strength and jump in, but that’s often misleading)
4. Low-priced stocks mostly pull back; (Wind power, nuclear power, photovoltaics, and who else?)
5. Rebounds from old leading stocks (Jia Mei Packaging is a typical example today)

Today’s opening signals were very clear: all the strong sectors from yesterday have already experienced serious pullbacks today. The sectors still showing strength are all new faces:

So the best action today is only one: stay flat (here’s what I told my apprentice):

Regarding my trading system, I’ve never been eager to talk about my own system, but many people have privately asked me. My main focus in a trading system is not just timing or stock selection; good stocks are always in demand. For example, during this pullback phase, Yunnan Energy Control hit the limit down yesterday, but panic didn’t spread to other sectors. Especially in chemicals, I initially thought it would rebound, and Jin Niu performed strongly today, but I see no real significance in that. So, all the traders who bought yesterday, at least those who are trading emotional stocks, are disrespecting the cycle. That’s the logic of timing; (Yesterday, many stocks in the 2B category looked very promising, but today they’re all gone!) As for when is the right entry point? Wait for signals from the market. I’ll explain step-by-step how I observe the start of a cycle in my upcoming articles! (Actually, I mentioned this around March 4 in my review article, but many didn’t read carefully.) Sometimes I feel it’s not that I don’t want to share, but that the viewers’ level isn’t high enough, so I can’t. Only those with fate will understand!

Below are some guesses about tomorrow’s market, not all may be correct—wait for tomorrow’s validation:

1. Stocks that may need to correct further tomorrow: Jin Niu Chemical, Huadian Energy, Shun Na, and mid-cap stocks.
2. The limit-up of Shun Na can be understood as a survivor, or as funds betting that it will lead a sentiment rebound tomorrow; provided it remains strong and leads sector recovery (it already recovered once this afternoon). If Shun Na cannot trigger a strong sector recovery, then all rebounds tomorrow will just be profit-taking points.
3. Those who are not optimistic about Shun Na shares can consider a second-wave decline similar to Han Lan, because the environment doesn’t support a breakout; I personally predict it’s just a continuation of the decline.
4. Sector recovery can take several forms. Many believe that a rebound is just a form of recovery, but another form is sideways consolidation, which many don’t understand. However, sideways consolidation is also a type of recovery!

Waiting for the next new cycle, the joyful money-making time won’t keep us waiting long!