After two days of intense fluctuations at high levels, although the main capital's sell-off didn't directly crash the market, it has been gradually eroding the bulls' morale. Today, the market opened below the 5-day moving average with a sharp decline, followed by a quick rebound but remained unable to break through the resistance of the 5-day moving average, oscillating repeatedly below this line. Enthusiasm in the crypto circle is waning, retail investors' frenzy has diminished significantly, trading volume has started to shrink sharply, and the main capital continues to net outflow.

Although trading volume remains at a historically high level, strong selling pressure makes it difficult for individual stocks to stay active. Certain thematic sectors repeatedly plunge, becoming short-term casualties, with frequent limit-downs, a surge in heavily fallen stocks, while the number of stocks hitting the daily limit-up or soaring sharply has significantly decreased. The market is clearly cooling down. Combining the single bearish candle top test from the day before yesterday, two days of massive volatility, and the resistance of the 5-day moving average today, signals of a top formation are already quite clear. However, exiting now would mean significant profit shrinkage, so many find it hard to make a decision. If one still harbors illusions about high-level stocks, they are likely to end up with nothing. Of course, individual stocks should be treated differently; a one-size-fits-all approach is not appropriate.

In the early trading session, main funds continued to net outflows significantly, having already drained 270 billion in net outflows over the past two days, showing a very resolute attitude. This process will definitely repeat, and while we cannot predict how it will unfold, the attitude of the main funds can give clues about the possible direction of the market. With large-scale net outflows and a significant contraction in volume, by 11:10 AM, trading volume shrank to 300 billion, with a net outflow of 54.2 billion from the main funds, which is indeed alarming. If the main selling intensifies in the afternoon, the probability of testing the 10-day moving average to the downside will increase substantially.

Straightforward conclusion: The afternoon will be tough!

Currently, the 5-day moving average has become a clear resistance. The early morning surge was like hitting a steel plate, bouncing right back. Combining the signals of "single bearish candle top test" and high-volume activity at high levels, the market shows strong signs of a top formation. The negative effect of losses is clearly increasing, with the main funds疯狂抛售 for two consecutive days. If they push even harder in the afternoon, the index is very likely to take another step down, testing the 10-day moving average—don't think the 10-day line is a bottom; with the current momentum, breaking below 4100 and even reaching 4000 is possible. The market can be wildly bullish upward or fiercely bearish downward; its mood is always unpredictable. Of course, this is a short-term perspective; the mid- to long-term bull market conviction still needs to be maintained.

The main trend has collapsed; can new hotspots hold up?

The hottest sector today has completely cooled off. The leading stocks in that sector hit the limit-down directly, and everywhere in the sector, there are limit-down waves, cooling down faster than an air conditioner. Some say that if the main trend collapses, other hotspots can rise? Theoretically yes; sectors like gold and energy did rally today, but a closer look shows these are driven by hedging in the futures market, not true main trend hotspots. They are just influenced by news and will fluctuate with future news. It looks lively, but it won't go far.

A warning to all retail investors: now is not the time for aggressive moves!

As repeatedly emphasized before, high-level stocks must be reduced in position, and do not wait for the top signal to be fully confirmed. If you insist on acting only after signals appear, you must have the discipline to execute. The problem is, by the time signals are clear, profits have already been halved! The smartest approach now is "dynamic profit-taking + reducing positions," preserving ammunition, and waiting for this wave of adjustment to pass—there will be many good opportunities afterward. Never get itchy to chase highs, especially stocks that surged early in the morning and then fell back; be careful not to get caught at the top.

In the afternoon, focus on two directions:

Main fund movements: If selling pressure intensifies in the afternoon, the 4100 level will definitely be hard to hold. If the decline continues, the 4000 level is certain to be tested. The index has not yet formed an upper shadow above the year's high, which will be made up eventually.

Support of the 10-day moving average: The 3980 to 4000 range is a strong short-term support. If broken, the adjustment cycle could lengthen significantly.

Remember, patience is more valuable than anything now. Instead of being repeatedly cut in oscillations, it’s better to dynamically take profits and reduce positions, leaving ammunition for better opportunities ahead.