[Red Envelope] Stock Enthusiast Notes: You may not know me, but you've definitely heard of the Emotional Cycle Theory

The darkest hour has passed, and a new cycle is beginning. Today, we’ll continue sharing market insights from the Heavenly Secret, teaching everyone how to switch into the new cycle’s行情 (market trend) through the “right approach”! Seize every opportunity to go long! If you enjoyed it, remember to like, follow, and do the one-click triple combo—no freeloading~[Taoqiu]

At the index level today, we finally achieved a short-term bottom confirmation signal according to our sentiment cycle theory: “a contraction in volume and stabilization (yesterday’s shorts are exhausted, turning bullish) — continued recovery with expanding volume.” As long as these two days are within the aesthetic rhythm of our model—only focusing on Power + Technology—then on Tuesday, the open with a gap-up and plunge didn’t deter entry on buying divergences; today, the second climax at the high point, still managing to buy while hitting and then retreating, confirms that every classmate can welcome your own spring! What we need to do is: in a weak market, don’t lose much—sometimes even make money. When the opportunity comes, earn a bit more than most people. In the end, make big gains while keeping losses small; small gains without losses, achieving stable compounding!

Today’s Stock Addict Notes, Point One: The top of the box + the repair climax is the point of兑现 for “hit and retreat”
Many classmates see a big rally and can’t care less—if it rises a lot, it must be an opportunity; if it falls a lot, it must be a risk. After buying, you hope it goes up the same day; after selling, you hope it drops immediately. In reality, it’s all driven by human nature: seeking profit and avoiding harm. It’s also the psychology at work in people who trade stocks. In reality, when trading, you look at two days—not just one day. Do more trades in environments with next-day support and repair expectations, and do fewer trades in environments where a pullback on an expected divergence downtrend is forming and continuing.

It’s like: before this week, the market structure hadn’t changed. Pairing and continuity were still hard, and high consistency was difficult to execute. On March 18th, even if there was something that looked tough like Sanfangxiang with a five-board turnover, its chemical sector was all limit-downs. Various chemical, mining, oil & gas things inexplicably fell limit-down. But recently, after those five boards, there really wasn’t anything that could continue to strengthen. If you try to do this kind of “nine-death-one-life” gamble and you make one mistake, your account is easy to get cut in half; but with a trend setup, you can make many mistakes. Last Monday, the strongest was chemicals; by Tuesday it started to make up for the underperformance (catch-up drop). On Tuesday, the strongest was power; on Wednesday, it also began to break and catch up by pulling back. Shun Na went directly underwater. On Tuesday, Power’s strength was so obvious—Zhengtai Electric Power didn’t explode open even under big divergence. But by Wednesday, it directly had about half a limit-down. So at that time, you could see the topic and basket were still the same: the first day it’s strong, the second day it’s兑现. This includes tech CPO trend capacity that was doing relatively well on Monday—yet the second day it fell the worst. The market is still the same market. That’s why, for a lot of time, trading during the repair-to-climax phase is often a sell point.

For example, why go into Demingli before the Tuesday “ice point”?
Very clearly: a trend has already formed. Once small divergences appear in the middle, if it’s weak but not weak, that’s a good entry point within the model. By the second day, it could rotate into a big rally. On March 18th, Demingli, Broadvision Storage, Jiangbo Long, and Xianong Chuang—especially in the storage chips theme—clearly showed the trend taking shape. From the sell-off/withdrawal phase starting March 13th to the weakest moment on the 18th, storage was actually the strongest. And once the trend takes shape and the market repairs, it should naturally strengthen. So back then, the box-structure you wanted to execute was still placing the buy point near the bottom of the 40/50 box area (for example, around the 4050 box bottom). On March 17th, during the technical “ice point,” it directly undercut and produced the 4th ice while the index had already dropped close to 4049 points. Once it broke below the box bottom (4050 strong support), in a relatively good consolidation structure, the buy point around 4050 was appropriate. When divergence happens, you have to front-load the buy. During the day’s sector climax, if the next day it surges again, it very easily triggers algorithmic profit-taking/quantitative兑现. So the day’s climax sector on the next day often becomes an兑现 point. Including the index approaching the top of the 4150 box area, you need to pay attention to collective market兑现. If you don’t兑现 at this moment, then the next trading day—Thursday and Friday—will likely see consecutive big selloffs and pullbacks.

For today’s environment, with index gains for two consecutive days and nearly 5,000 stocks up, does this rule still hold? How should we look at the outlook?

We’ll go directly to Note Two: Predicting the Future (pressure level projection)
In finance, there’s a very basic theory: a valid breakout above a pressure level turns that pressure into a future support level; a valid breakdown below a support level turns that support into a future pressure level.
So just think for yourself: where was the support level that the index broke below in the previous round? That will be the likely next pressure level. The closer this level is, the more you should pay attention to “hit and retreat.” The probability of divergence will be higher. And today, our sentiment cycle theory directly shares several key levels with every classmate:
From far to near: the previous box support at 4050; the previous index gap at 3983; and in this current downswing wave, the upward gap at 3955—these will all become obstacles (stepping stones) for the repair phase!!

From the recent pressure points, the gap at 3983 last time and the gap at 3955 this time are very close. Therefore, the pressure chips here will be the most, and the future兑现 pressure will also be greater. So where is the index right now? In two days it has risen 130 points to 3931! In reality, it’s only one step away from the 3955 gap pressure. Tomorrow, an inertial push higher might reach it. Therefore, based on the objective structure: if this is a “box base-building” consolidation structure, then the index box is “3800–3955.” That would mean the next rhythm becomes clear; doesn’t it? As per the old rule of sentiment cycle theory: the more it falls, the closer it gets to the box bottom near 3800, the more you should look for opportunities; the more it rises, the closer it gets to the box top near 3955, the more you should look for risks.
So for today, with the second-time climax overlapping and nearing the pressure at the top of the box, it’s the time to sell as it rises (the higher it goes, the more you sell). Therefore, the setup selection within the model is simple today. The ancestral teaching is: “On the day after a climax, go weak and keep strong; don’t open new positions.” Just consider “hit and retreat.”

So if yesterday, classmates had selected Longfei Optical Fiber + Guangku Technology according to the system’s aesthetic, could the early session’s +8.5 “sky cannon” from Guangku Technology tempt you to stay?
No—because CPO as the trend direction had too high a consensus after last night’s US CPO rally. Plus yesterday’s big weights like Easy中天 didn’t really rise much; today could still rotate to补涨, but the opening auction directly抢了 the “special high” into a very strong gap-up and overdrew that expectation. In the end, it caused the whole sector to gap up high and then go low. Guangku Technology, as the core that opened strong, was hard at the start—but once it turned, there was clearly no follow-through. So based on my thinking, it basically means that turning support is weak, so you reduce attention. After it breaks below the moving average and you close the position, you’re done. Then you’ll discover the seesaw effect between trend and sentiment: technology as the trend representative shows a gap-up and then sells down with divergence. So sentiment takes advantage and strengthens further. That is today’s market structure!

And why is Longfei Optical Fiber doing fine?
I’ll share a few exclusive thoughts from my intraday scan with you. If you understand this: whether “you sell when it becomes a board, and then you get smashed” or “wait until tomorrow and see the high-level smash,” it’s actually pretty easy to see. The first point is that nodal stocks get additional off-exchange potential buy support: at the open, we clearly saw the market finally resume with volume and continued repair. The base was established. After Huadian Liaoning Energy moved anomalously, it continued to raise high and hit high with strength. Also, the first-day bottom first-board resonance—i.e., the two-in-one today—is a nodal stock that acts as補涨, so it would be directly valued for “buying higher and selling lower” and抢筹.
The second point is expectation confrontation, or expectation discrepancy. Looking at today’s power sector, it formed a “stronger and then even stronger” structure. Would that mean capital must significantly ferment power next? Not necessarily. Otherwise, Yuuneng Holding and Jinkai Xins—those wouldn’t drop back or even plunge. In such cases, capital often switches to themes that can hold up when power faces divergence on the next day—such as yesterday’s power divergence where tech flowed back, or completely unrelated “military industry / Haixia”-type themes—doing expectation confrontation.
The third point is: if it’s weak but not weak, that should be treated as strong. We directly look at the early-session CPO: it opened high and then sank. Although Guangku Technology and Longfei Optical Fiber both had opening “sky cannon” separation moves, once it pulled back to test support, the behavior was different. Guangku Technology, upon a pullback, directly broke below the moving average. But Longfei Optical Fiber pulled back to the moving average without breaking it—then weak pullback continued and made new highs. That’s also why order-book strength is the key to judging whether you should wait longer. The core is whether it keeps smashing on the board or holds the board to smash the next day’s high.

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Stock Addict Notes, Point Three: Opportunities for the foresight; where are the risks?
Risks only arrive late—they never miss. With nearly 5,000 stocks up for two straight days, you have to stay calm. You can’t make all the money, but you can definitely lose it. Even these days, if you’re not in the power/CPO core stocks, and you make small losses but not gains in other places, there are plenty of people. These people will feel extremely “missed the train.” Otherwise, why would there be big volume today? Because yesterday they missed it.
Now tomorrow, once everything that should be bought has already been bought, who will take the bids? So here, besides thinking about the pressure level of 3955—the closer you get, the more you should hit and retreat. Don’t be afraid of selling-out too early. The other part is thinking about what tonight’s teachers might be hyping as the new dragon: “Hua Dian Liaoning Energy.” If this current mini-repair cycle was brought by Hua Dian Liaoning Energy, then when there’s a big divergence in Hua Dian Liaoning Energy, that’s precisely the divergence—or even the turning point—ending of this mini-cycle. I believe classmates in front of the screens will agree with that, right?

Let’s think deeper: why can Hua Dian Liaoning Energy today open crazily high with shrinking volume, snap into a quick board, and then accelerate? Because after last night’s anomaly, there has been no regulator “black room” news!
But based on our past experience with high-mark stocks: first, high-mark stocks live on divergence and die on acceleration; second, Friday is the traditional “high-mark crossing the tribulation day”; third, there have been four same-direction anomalies.
So today, when we look at Hua Dian Liaoning Energy’s price-volume pattern, we already see the first time of shrinking-volume acceleration. And in terms of timing, it’s also very close to Friday’s traditional “high-mark crossing the tribulation day.” Tomorrow, Hua Dian Liaoning Energy and Zhongfu Shenying both will face a high-level situation with four same-direction anomalies. Therefore, if tomorrow’s opening is even higher than today—maybe even trying to go to a one-word board to attempt a second acceleration—then be careful: inside the position, there may be divergence thinking. They worry that the “Friday tribulation” choice will get priced in early. They believe high-mark stocks die from the second acceleration driven by unanimity. That would mean all the old-cycle high-position stocks in the next day or two need to be careful.
It’s like these days everyone compares Yuuneng Holding to Pingtan Development, and compares Hua Dian Liaoning Energy to Hefurfu China. But today, in the old-cycle lineup, Yuuneng Holding near the close suddenly dumped and ran early; Hanxian Cable, Jinkai Xinske, and Shun Na shares all collectively pulled back from high levels. A shared feature is: “old cycle.”

But it seems like Hua Dian Liaoning Energy—looking like a newer face—also doesn’t have much divergence in the Hua Dian Energy sector. So our system conclusion is: comprehensively avoid old-cycle stocks, embrace the new cycle, and embrace the switch.

As for how to embrace it—today, our sentiment cycle theory continues to teach classmates a few key secrets!

One: Watch these turning nodes between high and low—just these are enough!

1. Index top turning-around node descending (e.g., on 10.31, identify Pingtan Development / Haixia Innovation back-to-back first-board node); 2. High-mark stocks on a break of the board or on a big divergence day; 3. High-mark stocks on the suspension day from “black room”/trading halt; 4. When a new disruptive “push” theme appears;

And right now, the existing node in the market is Tuesday’s index bottom first-board—meaning today’s two-board is the focus of consensus capital. Then on Thursday/Friday, when Hua Dian Liaoning Energy has a big divergence or even a board break, a second first-board node will likely appear as well—both showing the switch method of “buying high and selling low” (and not just repeating the same approach). The higher the consensus for high bids and the more off-market buying orders there are, the higher the success rate.

Two: High-level volume/energy effectively transfers + separates
This part is longer, but it’s extremely important. Just jump to my earlier Heavenly Secret shares for the detailed content—don’t be lazy: Mainly pay attention to whether, when Hua Dian Liaoning Energy faces divergence, there are any low-level stocks that show active separation—stocks that rise against the trend. On the weekend, classmates who studied my “Tudui inner-cultivation” first-board tutorial should also be fully alert. For example, what we can find this afternoon: when Yuuneng Holding’s intraday time-share chart showed a midday plunge, the old-cycle coattails were the most tightly connected—such as Jinkai Xinke, Hanxian Cable, Shun Na shares, and Jinkai Xineng. But did anyone attempt to separate early signs?
Yes. After Yuuneng Holding plunged, the first to rise against the trend was the “financial vehicle” this round: China Oil Capital. Next was the CPO sentiment play: Risingcom Technologies (Ruisikangda). Therefore, for tomorrow’s index—or possible market divergence where capital must act—there is already a response. If power’s second-time climax follows the index’s second-time climax and causes divergence tomorrow, then who will stabilize the rotation? The answer is obvious: “Finance + Tech.”

So are the rotation opportunities tomorrow only inside finance and technology?

emmm—I think not. Put simply: what kind of “finance” can have a real dragon-led market? And in the past few days, the tech heavyweight sector hasn’t shown that much proactive initiative either. So we still go back to our system’s old core idea: if extreme money-making effect is the representative, then you just imitate it. And that representative is Hua Dian Liaoning Energy. The strongest theme is electricity-coordination. The bottom resonance themes will also accompany this cycle all the way to the end.

Therefore what we do is: “Don’t scatter the eagle until you see the rabbit.” Just like Brother Zhao said: “You can tell what the real dragon is from first-boards and second-boards.” Now, with nearly 5,000 stocks up for two straight days, can you tell who is the core? Probably not—you can only tell that when the environment is strong, the early-session instant boards are the front row; throughout the day, the slow-and-steady boards, and the boards exploding in volume after 10:30, and the frequent board-breakers are more like the back/middle rows. So the real test stone is the “divergence adjustment day.” That’s when you can truly see who is strong or weak; which low-level new faces can separate from Hua Dian Liaoning Energy, whether Hua Dian gives way and allows high-level volume to effectively transfer to low levels, or whether it’s like Hefurfu China continuing to make new highs all the way.

So next few days: wait patiently for profit-taking to be realized; then wait for the index’s divergence near the 3955 pressure level; after that, go strike for new nodal opportunities and find new switching chances. If you can hold your nerve, patiently wait for the box base and the technical “ice point”; waiting for a second dip is also an effective method for making large mid-term capital moves!

** Technical-side market sentiment temperature: 87°C**

Data classification:

Number of stocks up/down: 4874 / 560
Number of stocks hitting limit-up: Tuesday 83 / Wednesday 84
Limit-up hit rate: Tuesday 78% / Wednesday 83%
Number of limit-downs within the day: Tuesday 1 / Wednesday 1
Total market turnover: 2,193.1 billion RMB, an increase of 96.83 billion RMB vs the previous trading day

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