Core Viewpoint - The market is experiencing a structural rotation rather than a comprehensive recovery, with funds shifting from previous hot themes like commercial aerospace to AI applications that have significant growth potential but are currently undervalued [4]. Group 1: Market Dynamics - The market is divided into two distinct segments: one characterized by enthusiasm for AI applications, and the other showing weakness in sectors like Hainan Free Trade Zone and retail, with over 2,700 stocks declining [4]. - The trading volume has decreased significantly, with a drop of over 1 trillion in transaction value, indicating a lack of overall market liquidity and a concentrated flow of funds into a few high-potential areas [4]. Group 2: Investment Strategy - Investors are advised to focus on AI application sectors while being cautious not to chase stocks that have already reached their peak during high emotional periods; instead, look for stocks with solid business logic that have not yet seen significant price increases [5]. - There is a need for vigilance regarding the overall market environment, as the shrinking trading volume is a warning sign; if the market does not show effective volume growth in the afternoon, caution should be exercised regarding the sectors that have shown strength [5].

Core Viewpoint - The market is transitioning from a "trend-based broad rise" to a "structural rotation" phase, indicating a shift in investor sentiment and strategy [3]. Market Overview - The three major stock indices closed higher, with a significant increase in trading volume by over 60 billion, reflecting a warming market sentiment [1]. - Despite the overall positive index performance, high-profile stocks experienced a sharp decline towards the end of the trading session, highlighting a cautious approach from investors towards overvalued stocks [1]. Active Sectors - Active sectors include retail, dairy, and controllable nuclear fusion, characterized by either relatively low positions in the consumer sector or emerging themes with moderate recent gains [3]. - There is a noticeable shift of funds from crowded, high-valuation sectors to lower-positioned sectors and new stories, indicating a "high-low switch" in market dynamics [3]. Future Market Predictions - The market is expected to maintain a volatile consolidation pattern, with pressure from above and support from below. Key observation points include the performance of newly rising low-position sectors and themes, which need to attract more funds to offset the pressure from high-position stocks [3]. - Monitoring changes in trading volume is crucial; a rapid decline in volume could hinder the active rotation of funds [3]. Operational Strategies - Investors holding high-position stocks are advised to reassess their portfolios, particularly those stocks driven by sentiment rather than solid fundamentals, and consider reducing positions to lock in profits [4]. - For investors seeking opportunities, the focus should be on lower-position sectors with potential policy or industry catalysts, as well as quality growth sectors that may attract funds from high-position tech stocks after sufficient adjustment [4]. - A neutral stance on overall positions and mindset is recommended during this period of significant style rebalancing, avoiding blind chasing of hot stocks and premature bottom-fishing in high-position stocks [4].

Core Viewpoint - The article discusses the challenges investors face during a normal valuation period, emphasizing the importance of maintaining a clear strategy and emotional discipline in the face of market fluctuations and structural rotations [3][4][12]. Group 1: Emotional Challenges in Normal Valuation Period - Investors often experience a "fear of missing out" during this phase, leading to anxiety about not participating in rising markets while holding onto their investments [6][8]. - There is also a sense of fatigue from waiting for valuations to drop, causing doubts about whether the opportunity for low valuations has passed [7][8]. - The lack of clear feedback during normal valuation periods can lead to impulsive decisions, such as chasing hot sectors or abandoning established strategies [9][10]. Group 2: Strategies for Navigating Normal Valuation Period - It is crucial to respect position discipline and avoid chasing prices or making hasty exits when valuations are not in the low range [12][16]. - Investors should shift their focus from buying logic to holding logic, assessing whether their holdings deviate from normal value ranges and if rebalancing is necessary [13][14]. - Maintaining a strategy and reducing exposure to market noise is essential, as frequent changes in sector focus can disrupt long-term plans [15][17]. Group 3: Long-term Perspective - The article emphasizes that enduring the quiet periods of normal valuations prepares investors for future opportunities during undervalued and overvalued phases [18]. - The focus should be on refining strategies and managing emotions, ensuring that when market conditions change, investors are ready to act without being swayed by short-term fluctuations [18][19].

Group 1 - The A-share market experienced a range-bound fluctuation near the 20-day moving average, with a decline in average daily trading volume to 1.14 trillion yuan [1] - Market performance was characterized by a hierarchy: consumption > growth > finance > cyclical [1] - Economic indicators such as the May PMI showed signs of recovery, but the overall economic situation remains weak due to trade friction uncertainties [1] Group 2 - Short-term risk appetite is limited, but declining interest rates favor safe-haven assets like gold and new consumption sectors with inherent growth support [2] - The long-term trade landscape has been disrupted by tariff impacts, benefiting safe-haven assets despite short-term fluctuations in gold prices [2] - The technology growth sector, particularly in AI, robotics, innovative pharmaceuticals, and military industries, may see renewed performance as earnings reports are released [2]