The index has once again arrived at a position that makes people feel extremely awkward, between 2900 and 3000.

Just like the interval of 3150 to 3050 at that time, it took more than a month to grind, and finally lost a large downward trend.

In a market with insufficient capital, if it fluctuates for a long time and does not attack upwards, the final outcome is mostly to go down first.

The focus here is to go down first.

Many people do not quite understand the game of long and short, so they do not understand the mentality of market capital in the horizontal market.

First, think about one thing.

Why does the market come back and forth around 3000, it is difficult to go down, and it is difficult to go up?

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There are two reasons.

First, there is a lack of money.

Although the policy is warm and frequent, and there are various small compositions, the market does not have a clear capital entry.There is neither a stabilization fund, nor can we see significant increases in holdings.

The slight increase in holdings by Central Huijin Investment Ltd. and the small-scale purchases by state-owned capital seem more like a signal being conveyed, rather than actually spending money.

In a market with a market value of 8 billion, at least tens of trillions of funds need to enter the market to bring about some essential changes.

Secondly, there is a lack of space.

Above 3400 points, it is like an iron plate, almost impossible to go up, because there are too many trapped positions.

In 2020, it reached 3400, and by the end of 2023, it saw 3418, with the positions above 3400 in the 2-3 years, which is the biggest problem.

Looking at the range of 3100-3400, it also accumulated a lot in 2022-2023.

It can be said that from 3000 to 3400, if there is really a market, it is a step-by-step obstacle.

Therefore, funds would rather absorb at a low level around 3000, and there is no further intention to raise and break through upwards.

Only when a large number of positions stop losses here, the market will become lighter as it goes up.The reason for the narrow fluctuation of the index is that the funds that are long are continuously absorbing at low levels, and at the same time, they are also selling at high levels.

When the market's expectation is neither up nor down, these funds are making the market within such a narrow space, back and forth.

Some people find it incredible and can't figure it out.

You can look at the market turnover, and you will find the clues if you always can't go down.

When the market is in a long-term horizontal situation, the divergence of funds should theoretically become less and less, which should be a reduction in volume, seeking a change in the market.

But it is obvious that the market has not appeared in this situation.

Instead, in the narrow fluctuation, the various sectors quickly rotate to make the market, fry for a few days, and then fall after trapping a group, and then fry another sector for a few days, and then trap a group again.

This indicates that the funds are also selling high and buying low.

This explains why even if the market is very cold, there are still 700-900 billion in volume.

At this point, the funds do not have a large selling momentum, but if it goes up, it will sell a little, and if it falls, it will buy a little again.Having an idea of what the capital is generally doing, it's time to consider whether to advance, retreat, or just lie flat.

What kind of retail investors should advance?

1. Value investors should advance.

If you are a pure value investor, you must be buying at this point.

This may not be the lowest point, but it is definitely a bottom area.

If the index falls another 10% from 2900, it would be 2610, and value investors themselves do not care too much about the so-called bottom 10%.

There are low-valued stocks everywhere, compared to 2021 where there were high-valued core assets everywhere, the current stocks are really cheap.

If you are still afraid to buy at this place and still expect lower prices, it may no longer be value investing, but rather leaning towards price speculation.

2. Investors with low positions should advance.If you are currently holding no positions or have a very low position, I suggest buying, buying, buying.

Many people will say, "There's still a drop to come, I want to buy at the bottom, but now is not the bottom."

The mentality of those who are holding no positions determines that even when a major bottom really arrives, they still won't enter the market to buy stocks, because they always think there will be a lower point.

When they finally enter the market, the price they buy at is still 10%, or even 20%, above the bottom.

This is because only at this time, due to the fear of missing out on the market rally, they will rush to get on board.

Major main funds have already started to layout in this area, and it is not wrong to buy a little more or less.

What kind of retail investor should withdraw?

1. Fully invested investors should withdraw.

Fully invested investors really should take a step back.

This is not to say that they should clear their positions or anything like that, but to keep a portion of their capital liquid and maintain a good mentality.For those who are fully invested, the fluctuations around 3000 points are simply too tough to endure, and it is very easy to spoil one's mentality.

In the absence of a clear short-term trend, it is very necessary to withdraw from some positions in moderation.

Moreover, the main line of the current market is not clear, and for retail investors, the risk of being fully invested is very high.

Forcing a bet at this position and trying to go long will inevitably lead to a bloody nose.

After all, the big money is also doing high selling and low buying, and retail investors are difficult to make a big difference.

Once the mentality is worn out in the repeated ups and downs, it is also a relatively large risk and loss for the future real market.

2. Short-term speculators should retreat.

Short-term speculators should also retreat at this position.

Perhaps they are still immersed in the speculation of the previous demon stocks, with the joy of winning.

But it can be clearly seen that the profit effect is getting worse and worse.Because of the repeated high selling and low buying of funds, the market will be continuously bled, and the difficulty of short-term speculation will naturally increase.

You cannot be the opponent of the big capital that controls the direction, and you cannot expect to follow its rhythm to enjoy the profits.

In most cases, a single mistake will trap you on the top of the mountain, and then you may not be able to get down for a long time.

Around 3000 points, it is not suitable for speculation, especially after the market has been fluctuating at this position for a long time.

What kind of retail investors should lie flat?

1. Cyclical investors should lie flat.

Cyclical investors refer to those investors who do valuation cycles.

They are not value investors, but follow the high and low of valuation to make investments.

Now is a window of valuation, it is definitely not high, but it may be lower.

For cyclical investors, even if it is a low valuation, it also pays attention to the time cycle.From the 21st to the 23rd year, a two-year time window is not enough to bring about a major cycle of the market; this window period is still a bit too short.

Therefore, these investors, at this current point, will completely lie flat after adding one more position, waiting for time to pass.

There is no need to repeatedly engage in short-term cycles, nor is there a need to excessively bearish or bullish; it is more about waiting for the progression of the time cycle.

2. Trend investors should lie flat.

Trend investors, in this kind of market, are also completely lying flat, as there is no trend here.

Upward, there is no volume visible here, nor is there any significant bullish candlestick.

Downward, the trend here is hesitant and reluctant to fall, merely within the larger downtrend channel, with no construction points at all.

This kind of market that cannot go up and falls very slowly is likely not to be participated in by trend investors.

For them, the best strategy at present is also to lie flat and wait for the direction to become clear.

The vast majority of retail investors still have relatively high positions, and at this point, they need to be patient and also need to adjust their positions, but more importantly, they need to maintain a good mentality.Because, at this moment, this place, time, space, period, and funds have not yet been in place.

It can be said that even in 2024, it will not be like what some people say, to start some large-scale bull market.

More of it is a bottoming process in the cycle.

The road down the mountain seems very close, but in fact, it is very long, because there will inevitably be small hills of ups and downs waiting for us.