Stock market turmoil, where will the market go? How can retail investors survive in a major market drop?

Today's A-share market has taught investors a lesson, with the main index breaking through the 3300-point mark, and the ChiNext board suffering a heavy blow, with a decline exceeding 10%. Such market volatility has sparked deep thinking about the future market: Is this round of market movement over? As ordinary retail investors, how should they operate next to stand firm in the ever-changing market?

In fact, many experienced stock investors have been mentally prepared for today's violent fluctuations. Recently, the market has been continuously rising, and various signs have implied the arrival of adjustments. Let's take a look at the real reasons behind this market change and future strategies.

Post-holiday A-share market opens high: The "carnival" that was expected

As early as before the holiday, the bullish momentum of the A-share market had not been fully released.

On the last trading day before the holiday, the market performed very strongly, with the Shanghai Composite Index closing with a long positive line with large volume, and the upper shadow line was relatively short, indicating that the market's disagreement on the future market was not significant.

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During the holiday, the external market rose sharply, especially the Hong Kong stock market, which is closely linked with A-shares, and soared by 8% during the few days when A-shares were closed. Therefore, the violent opening of A-shares after the holiday is reasonable.

The market cannot keep soaring in a squeeze market, and after a few days of strong rises, the technical indicators have long been overbought, and the stock index, sectors, and individual stocks have all moved away from the 5-day moving average, and the demand for short-term adjustments has become more apparent.

Many investors even said that it was very difficult to operate in the past few days, and they couldn't find a suitable opportunity to buy. This is not due to conservative operations, but because the market has already been in an overheated state, and many old investors are very familiar with this situation.

The game between funds inside and outside the market: The hidden risks behindThe market's violent fluctuations are not just due to overbought conditions on the technical side; more importantly, they reflect the intense confrontation between funds inside and outside the market.

Funds from outside are pouring in continuously, but those within the market are accelerating their escape. We have observed that there has been a surge in share reduction activities recently, with many companies even starting to sell off their holdings in a "clearing-out" manner, which often implies that company executives lack confidence in short-term stock prices.

Yesterday, institutional and speculative seats were frantically selling off. Data shows that the volume of institutional sales set a record as the second-largest in nearly four years.

This game of funds is, in fact, a contest between "veterans" and "new recruits." The funds from outside are mostly new investors, while the funds within the market are old investors, institutions, and industrial capital that have been tempered by the market for many years.

These "veterans" have a more acute judgment of market trends. Faced with a significant rise, they choose to sell high and cash out, while new investors are the ones to pick up the shares at high levels.

Actions from the higher-ups: A signal for the "crazy bull" to become a "slow bull."

In addition to the internal market game, external factors are also affecting this round of market conditions.

The continuous sharp rises have attracted the attention of the regulatory authorities. It is reported that financial regulatory departments have provided guidance to commercial banks through a window guidance approach, demanding strict control over leverage to prevent investors from over-pursuing high prices.

Why does the regulatory layer want to cool down the market? Because what they hope to see is a stable "long bull" and "slow bull," rather than a "crazy bull" that accumulates risks.

These signals all indicate that a short squeeze market is hard to sustain, and market fluctuations are inevitable. Therefore, many experienced investors have already chosen to reduce their positions, avoid full-capacity operations, and ensure they have ample room to respond when the market corrects.How will the future market trend unfold? How should retail investors operate?

As the market index corrects, how the market will move in the future is the most concerning issue for investors, especially those new individual investors who have just entered the market at high levels. In the face of market fluctuations, retail investors should not panic but rationally analyze the structural opportunities in the market.

From the perspectives of policy, capital, and technical analysis, the overall upward trend of the market will not change due to short-term adjustments. Even if the squeeze-out market ends, the market is still in the channel of a structural bull market.

In the future, the market may enter a more moderate upward phase, rather than the previous state of sharp rises and falls. Therefore, investors need to adjust their mindset and not expect significant increases every day.

In terms of operations, retail investors can consider gradually reducing risk exposure, without rushing to bottom-fish or being overly aggressive. Controlling the position and waiting for further market stabilization is the most prudent strategy at this stage.

Especially for new investors, blindly chasing highs and frequent operations will only increase the risk of losses. Maintaining rationality is the best choice to cope with market fluctuations.

The intense fluctuations in the market are not terrible; what is terrible is the lack of a clear investment strategy. In the current environment, retail investors need to view market fluctuations more rationally and not lose confidence due to temporary rises and falls.

The A-share market is still in an upward channel, but the pace of the rise has changed. Staying calm and reasonably adjusting positions are the keys to remaining invincible in this round of volatile market trends.