Core Viewpoint - The report from Dongwu Securities indicates that the Shanghai Composite Index (SHCI) has shown strong fluctuations in July, breaking through the 3600-point mark and reaching new highs, reflecting a consensus on the stabilization of the profit cycle [1] Market Analysis - The current strength of the SHCI is primarily attributed to the market's consensus on the bottoming out and stabilization of the profit cycle, influenced by the "anti-involution + demand expansion" policy combination introduced in 2016, which led to a rapid completion of the turning point trading [1] - The current liquidity level is relatively abundant, providing a foundation for quick pricing, suggesting that the transition from turning point trading to space trading will not happen overnight, and the market is likely to experience a period of consolidation [1] Investment Strategy - Some funds may preemptively position themselves based on space trading logic, absorbing shares as the SHCI enters a new operational center [1] - After quickly realizing profits, funds that participated in turning point trading may seek to cash out, leading to potential market fluctuations as it consolidates [1] - A gradual transition to space trading is anticipated as the market digests short-term profit-taking and rebuilds consensus on profit space logic [1] Sector Focus - The cyclical weight has been a key driver for the index's strength, with pro-cyclical sectors providing a platform for continued growth [1] - Attention is drawn to the low-end pan-technology sector, which may present opportunities as certain branches have already shown significant excess returns, indicating a potential shift from high to low [1]