The market overall performed relatively weak in the morning, but the situation took a dramatic turn in the afternoon, with the market rebounding and showing a bottoming-out trend. The number of stocks that closed higher reached over 3,300, which was a significant improvement compared to the morning. Today's long lower shadow, can it indicate that the market has bottomed out? At this point, it's too early to draw conclusions. Although this is an important sign, the downtrend at the daily level has not undergone a substantial change, and the trading volume continues to contract, so further observation is needed. Below, we summarize today's market performance and analyze the current trend for friends' reference.

Market Summary for Tuesday

The afternoon saw a clear rebound, including the main domestic capital, which continued to flow back after the afternoon opening. The outflow was around 11.8 billion at the morning close, and it was around 6.5 billion at the close, with an inflow of about 5 billion in the afternoon, thus alleviating the pressure on the market. All the specific component indices also turned red, while they were all down in the morning. Micro-cap stocks were the biggest gainers today, reaching 1.52%, significantly outperforming the broader market. The CSI 2000 also outperformed the market, while the CSI 1000, SSE 50, CSI 300, and CSI 500 underperformed.

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Looking at today's trading volume, the total closing volume for the market was 528.9 billion, which was 519.3 billion yesterday, an increase of less than 10 billion, so in terms of trading volume, it continues to contract. The essence of the market's weakness has not changed. Today's rebound and rise is a good phenomenon, but it does not indicate that the market has bottomed out. To emerge from the bottom, the trading volume must continue to increase and maintain at least above 800 billion. A transaction volume of over 500 billion will not have any effect on the market, and the tired trend will continue. Of course, today is just a good start, and if we can see an increase in volume, we can have further expectations. If it remains at this level of over 500 billion, we must still be cautious. Without an increase in volume, it will still fall back at key resistance levels.

Let's look at the trends of the specific component indices. Micro-cap stocks did not stand above the attack line yesterday but did so today, and the attack line has been reformed upwards, with the short-term trend of micro-cap stocks improving again. The CSI 2000 also closed above the attack line, which is a good sign, indicating that the daily downtrend has a basis for improvement. It must stand above 1737 points tomorrow for the attack line to possibly turn upwards, and one can consider trying to speculate. The CSI 500 did not stand above the attack line today and also set a new low during the session; mid-cap stocks should not be blindly entered now. The CSI 300 also set a new low, as did the SSE 50. Currently, from the trend perspective, micro-cap stocks are doing well, and everyone can focus on them.

There's no need to wait for Wednesday; the signs are already out. Will there be a storm tomorrow?

Let's take a closer look at the current trend of the overall market. The index is still deviating from the white attack line, which continues to run downward, and the downtrend is still very obvious. Before the index returns above the attack line and the attack line turns upwards, it remains in this adjustment state. Tomorrow's close must be above 2764 points for the daily downtrend to have a basis for improvement. Friends who are still outside the market, please continue to control your hands and do not blindly intervene; this is our operational discipline. It is normal to have rebounds in a downtrend, and we must wait until the trend is clear before making further plans. In terms of indicators, the MACD green column did not shorten today, but the KDJ formed a golden cross, which is a good sign.

At the 120-minute level, the close has not yet returned above the attack line, just a little short. If it can stand above 2746 points tomorrow morning, there is a possibility of improvement at the 120-minute level. The indicators show improvement, with the MACD green column starting to shorten again, and the KDJ golden cross beginning to run upwards. At the 60-minute level, it is currently in the initial stage of improvement. In the last hour, it stood above the attack line, and the attack line turned upwards. If it can continue to stand above 2739 points in the first hour of tomorrow's morning opening, the rebound trend will continue, and the probability of the market experiencing another storm will be greatly reduced.

Looking at the Shenzhen Component Index, it also set a new low today, breaking below 8000 points during the session. As I clearly mentioned before, it is highly likely that the Shenzhen Component Index will break below 8000 points, so today's break below 8000 points is one of the important signs of an imminent bottom. Looking at historical trends, major bottoms are generally formed as double bottoms, and here we are also forming a double bottom, with the subsequent low point being very close to the previous low point. It can break below or not, and it doesn't matter if it breaks slightly; this is not important. What's important is that we are now very close to the previous low point.

Even if it cannot continue to rise tomorrow and falls again, there is no need to worry, as it is the final stage of the decline. If the Shenzhen Component Index cannot stand above 8130 points tomorrow, then the daily downtrend will continue. The ChiNext must return above 1545 points tomorrow for the daily trend to have a basis for improvement.The short term has already entered the final phase of accelerated decline, and there is no need for panic. The market cannot fall much further. On the surface, an accelerated decline may seem alarming, but in fact, such a break in the trend is a sign that the market is about to reach a bottom. Only through accelerated decline can the stalemate be broken, and a reversal at the bottom becomes possible. If the market continues to operate in a downward channel with persistently shrinking volume, it will only prolong the time it takes to reach the bottom. A quick resolution is better than a slow, painful process. Enduring the pain will eventually lead to recovery.

Now, we are getting closer to the bottom. Even if today is not the true bottom, I believe it is not far off. As I have mentioned, if this week does not see a bottom, the latest it will happen is next week. This is my judgment.

At this time, it is crucial to remain rational and calm. Blind panic can easily lead to wrong decisions. Continue to be patient and wait for the trading volume to increase again. Believe that the dark times will soon pass, and dawn will eventually come.