Xin Lang Cai Jing·2025-09-05 04:08Core Viewpoint - The Shanghai Composite Index has shown a slight recovery after three consecutive days of decline, indicating a potential continuation of the bull market's second phase, supported by a positive feedback mechanism of incremental capital [1] Group 1: Market Performance - The Shanghai Composite Index closed up 0.35% at 3778 points after three days of decline [1] - Historical patterns suggest that adjustments in the second phase of a bull market typically involve a decline of 3-5% over 2-3 trading days or a single-day drop within the same range [1] Group 2: Incremental Capital Mechanism - The report from China Merchants Securities indicates that the market has established a positive feedback mechanism for incremental capital since July [1] - Continuous declines exceeding four trading days are considered unlikely as long as the positive feedback mechanism remains intact [1] Group 3: Indicators of Phase Transition - The end of the second phase of a bull market is often marked by policy changes aimed at cooling rapid market increases or tightening monetary policies [1] - Historical examples include increased transaction taxes in 2007, regulatory changes in 2015, and tightening real estate policies in 2010 [1] - Currently, there are no signals indicating strict regulation on the incremental capital mechanism, suggesting that capital continues to flow into the market [1]