On July 24, the three major A-share indices plummeted. By the close, the Shanghai Index fell 3.86% to close at 3196 points; the Shenzhen Index fell 5.31% to close at 12,935 points; and the GEM Index fell 6.14% to close at 2,624 points.

In response, Yang Delong, chief economist of Qianhai Open Source Fund, believes that the large adjustments in the A-share market today are related to both internal and external factors, and the market itself also needs to be adjusted. This round of growth, which began on July 1, has risen too fast and too rapidly, and has accumulated a large number of profit orders.

Yang Delong said that the unilateral rise is difficult to sustain. Later, the market will shift to a volatile market, and the general market will also shift from a fast bull to a slow bull. This week's trend basically reflects this. The market has come out of a relatively volatile and adjusted trend, but the bull market is still going on. The market's bull market trend has taken shape, and there won't be much change.

There are also clear signs of a phased adjustment in the market recently. One is the “88 Curse,” which everyone is familiar with. According to statistics, recently equity fund positions are generally above 90%, which means they are close to a very high position.

This is a sign of the relatively high sentiment of fund managers. Positions above 88% often mean the beginning of short-term phased adjustments. Adjustments are actually taking place now, which is also a requirement within the market.

However, judging from external influencing factors, the US economy is uncertain, the US has spread rapidly before, and the risk of a second sharp decline in US stocks is increasing, so the dragging effect on A-shares is quite obvious.

In addition, the Houston incident in the US also had a certain impact on the confidence of A-share investors. Of course, the current fluctuations in Sino-US relations have not had as much impact on A-shares as in 2018, but they still have an impact on short-term trends. Phased adjustments generally last about a week or two, and will not last too long, because there has been no fundamental change in market trends.

Some of the explosive funds issued some time ago have already completed their positions, but there are still most new funds and new funds that have not reduced their positions, so this adjustment actually provides an opportunity for everyone to get to the bottom of their positions.

Consumer brokerage firms and technology are the three directions I have always recommended that everyone focus on. These are also the three major directions of economic transformation and industrial upgrading. Consumption of the Three Musketeers, liquor, medicine, food, and beverages has risen very high.

Relatively speaking, the lotion sector has a low valuation in food and medicine. Some time ago, I suggested that everyone should focus on it, and this week it also showed relatively good performance. If there is a pullback in the dairy sector after this adjustment, then this is a good opportunity to increase positions.

Fluctuations in the technology sector are also quite large. New energy vehicles, including those affected by fluctuations in Tesla's stock price, will be quite large. However, as an emerging industry, new energy vehicles represent the direction of economic transformation, and long-term opportunities are still worth paying attention to.

The brokerage sector is used as a weather vane for the market. When the market rises, brokerage stocks often perform prominently and take the lead, but once the market is adjusted, brokerage stocks are also the first to be adjusted. Looking at the magnitude of adjustments, according to historical rules, there is generally a wave of short-term adjustments, and the adjustment range for consumer stocks is around 10%.

However, the adjustment range for technology stocks such as NEV chips, including brokerage firms, is around 20%. Therefore, if you want to get to the bottom, you can wait until the corresponding adjustments are made. It is difficult to grasp the lowest point. A batch bottom check method can be used to check the bottom in batches while making adjustments.

Cyclical stocks have rebounded this week and have now begun to adjust again. They include strong trends in coal, steel, non-ferrous metals, and the military industry. The military industry has been stimulated by the tense international situation and continues to strengthen. The downside of the cyclical sector is that it fluctuates quite a bit with the economic cycle. The rise is fast, and so is the fall. Therefore, the allocation of cyclical stocks should be in a moderate range.

It is difficult for retail investors to determine the extent of a wave of market growth, but they can set a certain take-profit line. Generally speaking, after setting a take-profit line, it must be strictly enforced to meet your expectations of a rise, then it is necessary to make a profit in a timely manner.

In this way, it is possible to seize the opportunity of a pulsing rise in cyclical stocks, while consumer stocks slowly recover by exchanging time for space, so investment in consumer stocks can be bottomed out and held for a long time.

So overall, the market is currently in an adjustment period after a rapid upward trend, and the depth of adjustment may not be too deep. Today's adjustments are quite large, mainly due to the current resonance of internal and external bearish factors, which have hit market confidence quite hard. It is estimated that the adjustment will not take too long in about a week or two.

Holding high-quality stocks is the best strategy for dealing with market fluctuations. Everyone should maintain confidence and patience with regard to medium- to long-term market trends. Looking at the market in the medium to long term, there is already an opportunity.