The most frequently asked question recently is when can we bottom-fish.

Many investors, upon observing the market recently, feel that the A-share market is bottomless and seems to be an endless abyss.

However, upon second thought from a valuation perspective, it seems that the bottom is almost within sight and not too far away.

Some people would say that the bottom cannot be caught, and discussing bottom-fishing is meaningless and worthless.

Some people would say, why bother looking at the overall market? As long as you can make money from individual stocks, who cares about the bottom or not.

A variety of voices are mixed together, which has plunged many retail investors with a shallow understanding of the stock market into confusion.

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It is indeed difficult to bottom-fish, but predicting the bottom range, bottom cycle, and looking for potential bottom signals are still things that need to be done.

Because without a bottom, without market resonance, it is very difficult for ordinary investors to make money.

At least you need to be in a rebound cycle to have a greater chance of making money, rather than being in a half-dead and half-alive downtrend.

With more than 50%, or even 70-80% of stocks falling every day, and repeated high openings followed by low walks, where does the talk of making money come from?Trading in confusion leads to losses; even by lying flat and doing nothing, losses still occur.

Not knowing where the bottom is, without a solid foundation in the heart, one is more often affected by the fluctuations of market sentiment, enduring great suffering.

If there is a psychological expectation for the bottom, it will at least be of great help in terms of trading mentality and the duration of holding positions.

Therefore, experienced investors do not talk about bottom-fishing, but they never give up their expectations for the bottom.

Let's take an example, the Beijing Stock Exchange (BSE).

The bottom of the BSE, while not a super major bottom, is basically confirmed to be a significant phase bottom.

Let's look at some statistics.

The BSE's North Index, with a high of 1197.84 and a low of 702.55, has a range of decline of 41.35%.

The high point of the North Index occurred on June 28, 2022, and the low point occurred on October 23, 2023, with a continuous decline of more than a year, totaling 321 trading days.From the perspective of wave patterns, there was a 17-week decline, followed by a 13-week rise, and then a 36-week adjustment.

When the market bottomed out, there was policy support, but no strong policy was introduced to reverse the trend, which indicates a natural bottoming out.

At the bottom, the lowest trading volume on the Beijing Stock Exchange was 571 million, which occurred on October 18, 2023. Before hitting the bottom, the highest trading volume was 2.7 billion, which occurred on May 8, 2023.

The overall valuation of the Beijing Stock Exchange is around 17 times the price-to-earnings ratio.

The cycle of the Beijing Stock Exchange hitting bottom, its valuation at the bottom, and the way it bottomed out, all suggest that as long as the market has fallen for a sufficiently long time and is cheap enough, a market trend will emerge, without the need for too many policy expectations.

In fact, all market bottoms are similar.

If we disregard the Shanghai Composite Index, which was forcibly supported, and look at the CSI 300 Index, the ChiNext Index, and the Shenzhen Component Index.

The CSI 300 peaked on February 18, 2021, and has been adjusted for 688 trading days.

Among them, the most recent cycle of decline started on January 30, 2023, and has been ongoing for 218 trading days.

The overall market decline, from 5930.91 to 3339.52, has currently adjusted by 43.7%, which has already exceeded the 41.35% of the Northern Stock 50.The market valuation, with a dynamic price-to-earnings ratio of only 9.57 times and a price-to-book ratio of 1.04, cannot be said to have reached the extreme, but it is already very cheap.

The situation of the ChiNext Index and the Shenzhen Component Index is also very similar.

In this regard, the bottom of the CSI 300 seems to be just around the corner, but why hasn't it arrived yet?

After analyzing several reasons, we may be able to find some clues and have a clear prediction.

Firstly, there are not enough panic sales.

From the end of August to the beginning of September, the Beijing Stock Exchange actually experienced a small rebound under policy stimulus.

After that, it continued to decline and had consecutive bearish lines.

From October 13 to October 23, there was a despairing seven-day bearish streak.

When the market is bottoming out, it needs a panic.

Before the Beijing Stock Exchange saw the phased bottom on August 28, there was also a seven-day bearish streak.The longest bearish candlestick for the CSI 300 is a four-day streak, which corresponds to the minor bottom on October 23.

The protective funds from above for the CSI 300 have instead led to a delay in the index reaching its bottom, which is crucial.

Only when the intervention from above is not known to the public, causing market panic, or widespread pessimism and despair, will the bottom brought by sentiment arrive, and then there will be a large-scale rebound.

Secondly, the trading volume is not sufficiently reduced.

On May 9, 2023, the CSI 300 released the largest trading volume of the year, 396.4 billion, close to 400 billion.

The lowest trading volume for the recent CSI 300 occurred on November 22, at 136 billion, about one-third of the peak.

The trading volume of the Beijing Stock Exchange has contracted by about one-fifth, which means that the CSI 300 should at least see a trading volume below 100 billion, perhaps that is a true equilibrium point, the indicator of the bottom.

The reason the market needs to reduce volume is also simple.

The market needs consensus, not significant disagreement.

Retail investors only see that it seems that funds are bottom-fishing, so who is selling then?Especially for those situations where there is a significant increase in trading volume without a corresponding rise in price, what does such a high turnover indicate?

From divergence to consensus, there is a process involved, whether it's the venting of the bears or the deliberate digging of traps by the bulls, it is all part of the process.

Thirdly, the small cycle at the bottom has not yet reached its time.

The CSI 300 began to rebound on October 23rd, and after completely ending on November 21st, it started another downtrend cycle.

The last downtrend cycle of the Beijing Stock Exchange lasted for 30 trading days.

So far, the CSI 300 has been in a downtrend for 19 trading days, which is not enough in terms of time.

Usually, the bottom-killing cycle is around 34 trading days ± 5 days, the shortest being 29 trading days, and the longest possibly extending to 39 trading days.

That is to say, the cycle for the CSI 300 to reach its bottom may still need about 2-4 weeks.

Unless there is a special positive stimulus that allows the CSI 300 to reach the bottom ahead of the market, otherwise, the required time cycle must be completed.

The situation for other indices is actually quite similar.Fourth, there is still room for the valuation to fall further.

The valuation of the CSI 300 has not yet dropped to an extreme value.

The valuation of the Beijing Stock Exchange, the market had given a reasonable range at the time was around 25 times, and the extreme valuation was around 20 times, but it fell to 17 times.

If used as a reference, the CSI 300 is said to have an extreme valuation of around 10 times, then it may need to fall to 8.5 times.

It is said that the reasonable valuation of the ChiNext is 30 times, and the extreme valuation is 25 times, but if the market falls too much, it is also entirely possible to fall to 20 times.

Do not use the word "reasonable" to judge the market bottom valuation, give a 20% discount to the reasonable, and give another 20% discount to the extreme.

The CSI 300 will definitely not break through the 2935 points of 2018, but from 3394 to 2935, there is still some room.

Including the 1800 points of ChiNext, the 9400 points of the Shenzhen Component Index, the 2244 points of the SSE 50, there is still a valuation space for digging the basement.

Let's make a prediction.

The bottom-fishing cycle of this market may still have 2-4 weeks, which will appear at the beginning of January, and there is still a 5-10% down space for the valuation, and it is also lacking the panic and despair of the last drop, and it is missing a process of volume reduction.Before dawn, there must always be darkness; it's just that this time, the darkness has made people wait a bit too long.

Treat every bear market ordeal as a valuable learning opportunity, after all, the A-share market, which is characterized by short bull markets and long bear markets, particularly needs experience in facing bear markets.