Market Overview - The market experienced a significant adjustment today, with over 4,400 stocks declining, raising concerns about when stability will return [5] - The Shanghai Composite Index is currently in a "震荡" (oscillating) trend, with limited movement expected in the near term [5] Technical Analysis - The short-term technical indicators show that the 60-minute sequence has formed, while the 90-minute sequence has disappeared, indicating a lack of strong signals at the 120-minute and daily levels [5] - Key support is identified around the 3,360 level, with a strong support range between 3,300 and 3,350 [7] Trading Volume - Recent trading volumes have remained around 1.2 trillion, indicating a relative contraction and a reluctance among investors to sell [7] - Despite potential short-term adjustments, the downside is expected to be limited, and investors are advised to maintain around 50% position to balance risk and opportunity [7] Sector Performance - The military industry sector has shown relatively better performance, supported by favorable domestic policies and a sense of crisis in the environment [9] - The gaming and banking sectors have also seen gains, contributing to the overall market dynamics [10] Investment Opportunities - The recent approval of the third batch of insurance funds for long-term investment reform, amounting to 60 billion, presents a potential opportunity for long-term holdings in dividend-paying sectors [10] - Continuous optimization of the domestic listing environment for quality technology companies is expected to attract significant capital, indicating a positive outlook for the tech sector [10] Market Sentiment - The market sentiment remains cautious, with indications that the recent adjustments are just the beginning of a necessary correction process [8] - Investors are encouraged to be patient and wait for stabilization before making further investments [8]

Core Viewpoint - The article discusses the recent volatility in the micro-cap market, particularly the significant drop in the North Exchange 50 index, attributing it to various factors including market sentiment, high valuations, and the impact of specific stocks [1][2][4]. Summary by Sections Market Volatility - The North Exchange 50 index experienced a drop of 6.15%, marking it as the 10th largest single-day decline in its three-year history, with six days in 2024 alone seeing declines over 6% [1][2]. Reasons for Market Movement - Increasing warnings about micro-cap risks from fund managers have led to some investors taking profits, especially after the North Exchange 50 reached a historical high [2]. - The current valuations are notably high, with the North Exchange 50 at a rolling P/E ratio of 76, the China 2000 at 136, and the Sci-Tech 50 at 140, all at extreme levels compared to historical data [2]. - The significant drop in the largest component stock, Jinbo Biological, which fell by approximately 15%, has heavily influenced market sentiment, despite its year-to-date increase of 140% [2]. Future Market Pressures - The potential reopening of A-share IPOs is seen as a significant future pressure on the micro-cap market, which has thrived in a favorable speculative environment due to low funding rates and limited IPOs [4][5]. Supportive Market Conditions - The micro-cap market has benefited from low funding rates, restricted IPOs, and a lack of institutional investment, allowing it to flourish despite the absence of significant public fund inflows [5]. - Recent regulatory changes, such as the revised Major Asset Restructuring Management Measures, have positively impacted the shell value of micro-cap stocks [5]. IPO Policy Changes - The article highlights a shift in policy towards supporting high-quality, unprofitable tech companies for IPOs, indicating a trend towards more flexible and inclusive listing regulations [7][8]. - The introduction of a new mechanism for adjusting the pace of new stock issuances suggests that the current high valuations in the micro-cap sector may lead to increased supply in the near future [9][12]. Insurance Sector Investment - The insurance sector has significantly increased its equity investments, with a total of 220 billion yuan allocated, indicating a strong shift towards high-dividend blue-chip stocks [15][16]. Monetary Policy - The central bank's decision to exceed the MLF renewal by 3.75 trillion yuan indicates a net injection of liquidity into the market, which may influence bond market dynamics [17][18].