Following yesterday's A-share market opening low and closing high with a medium-sized positive candle, the market and investor confidence began to recover; however, today's A-shares did not continue the strong upward momentum of yesterday but instead became stuck and unable to rise, which is really puzzling!

Although there was a strong upward push by the bulls during today's trading, and mysterious funds continued to try to use some heavyweight stocks to push up the index, they were clearly insufficient in strength. It was quite evident that they were constrained by some unfavorable factors. Do you know why? To better analyze the trend of today's A-shares, the analysis will be conducted in two aspects below.

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Why is the market stuck and unable to rise?

In fact, the reason why A-shares couldn't rise today is directly related to the following points:

Reason one: The segmentation and poor performance of the heavyweight sectors, such as finance and cyclical industries, have intensified the tug-of-war between bulls and bears. It is unrealistic to rely solely on oil, insurance, and banking to push up today's A-shares again. The decline of other heavyweight stocks creates pressure, so the heavyweight stocks are the main reason for the market's stagnation.

Reason two: The pressure from the 20-day moving average and the 2900-point psychological level on the Shanghai Composite Index. For example, in this round of phased adjustments, every interim rebound during the decline has been resisted by the 20-day moving average. This resistance forms a trendline, and a significant increase in volume is necessary to successfully break through this resistance. Only by breaking through the 20-day moving average can there be hope to stabilize above the 2900-point level.

Reason three: Confidence and trading volume are also the most concerning issues for today's A-shares. The market and investors have completely lost confidence in A-shares, and without confidence, there is no motivation. Coupled with the insufficient trading volume in the Shanghai and Shenzhen markets, today's volume was lower than yesterday's, and it is still not enough to reach 600 billion, which is not enough to support a rise.

How should we view this?

The above analysis has identified three major reasons why today's A-shares are stuck and unable to rise, which proves that today's A-shares are weak. In a weak market, there are the following three perspectives:

First: The failure to continue the strong upward momentum of yesterday's medium-sized positive candle indicates that this rise is a rebound within the decline, not a reversal that signals a bottoming out and stabilization. To put it bluntly, this rise is a trap to lure more investors, aiming to repeatedly "mow the lawn" (i.e., to take advantage of inexperienced investors).Secondly: Since the A-shares have not yet been able to stop the decline and reverse, it indicates that the Shanghai Composite Index at 2839 points yesterday was not the true bottoming point. The true bottoming point is still lower, which suggests that A-shares will continue to fall, and the risk of adjustment has not been eliminated.

Thirdly: Investors are advised to avoid participating in today's rebound in the midst of the decline. Once they enter the market, they are likely to become the ones who take the fall. Therefore, it is essential to view the current trend of A-shares rationally.

In conclusion, through the above analysis, it is evident that today's A-shares are constrained by three factors: heavyweight stocks, the 20-day moving average, and insufficient trading volume, which fundamentally do not allow A-shares to continue to rise today. Since there is no upward momentum, the outlook for A-shares is not optimistic. After the rebound in the midst of the decline, it is inevitable that there will be further falls in search of a bottom.

Thus, caution is indeed necessary for the current A-shares market. Everyone should continue to endure and wait patiently until a clear signal of stabilization and reversal appears in A-shares before entering the market. #DocumentingMyAugustLife#