Bull Market Confirmed

On September 26th,the stock market once again saw an increase in trading volume and a surge in prices,with the bull market pressing the "confirmation" button.

A cycle every ten years.2004,2014,2024,the "market cycle" once again demonstrates the seemingly elusive "chance" and "inevitability," "destiny" and "impermanence."

Moreover,the bull market that is coming is likely to be a bull market across the entire market.

This is because the market's operation is the result of a three-dimensional resonance of "time,price,and sentiment." Taking the most representative CSI 300 Index as an example,from the beginning of 2021 to now,over three years and seven months,the market has fallen by nearly half,and market sentiment is almost collapsing.For a more specific example,consider Kweichow Moutai,the first weighted stock of the CSI 300 Index,which showed a collapse trend a few days ago,vividly displaying the low level of overall market sentiment.

Thus,things will turn around after reaching an extreme.

But in any case,in essence,a bull market is "built with money." Without funds from outside the market entering,the stock market cannot become "bullish."

This time,the "herdsman" is still the central bank: At the press conference held by the State Council Information Office on September 24th,the governor of the central bank publicly announced "quantitative easing" for the stock market—through two targeted and innovative structural monetary tools,injecting liquidity into the stock market in a directed manner,with an initial quota of 800 billion yuan,and three batches amounting to 2.4 trillion yuan.The specific extent of the directed injection will be "determined according to the actual situation."

The central bank cracks the whip,and the stock market gallops.The effect is immediate: in the last three trading days,the market's "fire" was quickly ignited,with the market's key words being widespread gains,surges,and increased trading volume.The Shanghai Composite Index also quickly returned to above 3,000 points.

Furthermore,the Politburo meeting of the CPC Central Committee on September 26th also emphasized: efforts should be made to boost the capital market,vigorously guide medium and long-term funds into the market,and unblock the capital market entry points for social security,insurance,and financial management funds; support for listed companies' mergers and acquisitions,steadily advance the reform of public funds,and study and introduce policy measures to protect small and medium investors.

Therefore,it can be straightforwardly said that the bear market is over,and the bull market is back.Regarding the current state of the market and the possibilities for its future development,I,the author,have the following humble opinions for your amusement:

Firstly,the market has seen three consecutive days of high volume and sharp increases,which implies that the market's cost basis is rising rapidly.This is akin to laying a "solid foundation" for a new bull market,thereby limiting the space for index adjustments in the future.

Secondly,stocks that have experienced significant declines in the past or contain leverage are likely to become the leading gainers in the early stages of a bull market.

Thirdly,from a systemic valuation perspective,the upcoming bull market is highly likely to be a comprehensive one,with a more pronounced social wealth effect.

Fourthly,from a liquidity standpoint,the central bank's endorsement of institutions to increase their holdings in the stock market can be seen as a "response to the call," embodying the principle that "many hands make light work."

Fifthly,from the perspective of market game theory,considering the previous restrictions on "bearish forces" such as new IPOs,shareholder reductions,and securities lending,the "bullish forces" will be in a significantly advantageous position for a considerable period moving forward.

Sixthly,the renminbi's exchange rate against the US dollar is also strengthening.Against the backdrop of a US rate cut and the launch of A-shares,foreign capital is likely to return to the domestic market for exchange settlement.The carry trade between the renminbi and the US dollar may reverse,providing enhanced support for A-shares.

Seventhly,in terms of overarching logic,the new round of bull market will be the expansion of the "China Special Valuation" trend.In other words,the "China Special Valuation" logic will spread from state-controlled large companies to the entire A-share market,somewhat similar to the "revaluation of renminbi assets" of the past.

Eighthly,due to regulatory encouragement for listed companies to engage in "up,down,left,and right" style mergers and acquisitions (which can both integrate the upstream and downstream industrial chains and facilitate cross-industry mergers),the overall market activity is expected to increase significantly.

Ninthly,considering the residential savings situation in recent years,it is foreseeable that the "migration of savings" will demonstrate its应有的力量 in this round of bull market.Tenth,from a more macro perspective,the new round of bull market carries the combat mission of "anti-deflation," which also implies the possibility of economic "re-inflation."