Today was not a remarkable day for the A-share market, as trading activity barely rallied above the 10 trillion yuan mark, indicating a lack of enthusiastic momentumIn stark contrast, several cross-border exchange-traded funds (ETFs) experienced a dramatic surge in trading, with the S&P Consumer ETF and a Saudi ETF hitting their daily limits with exorbitant premium rates of 52% and 20%, respectivelySuch exuberance is indeed noteworthy!

It’s quite ironic that while the United States has put Tencent and CATL on its blacklist, thereby causing a notable drop in their stock prices, active Chinese investors turned to foreign ETFs, driving up prices significantly with a 50% premium

This clearly indicates that foreign assets are seen as particularly attractive.

Isn't this situation tinged with irony? However, understanding the mentality of investors is essential; everyone involved in the stock market aspires to generate profitsOne can’t help but wonder when the Chinese market will mirror the sustained bullish trend observed in U.Smarkets.

Tonight, Jinshang Changcheng announced that from January 10, the S&P Consumer ETF will be suspended, with the resumption date to be announced laterWith regulatory measures now in play, it’s prudent for retail investors to remain calm and not follow the crowd blindly.

Objectively speaking, the frenetic speculation surrounding these cross-border ETFs seems reminiscent of a game of "who’s dafter." A similar situation unfolded multiple times in 2024 when both Japanese and U.S

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ETFs saw exorbitant premiumsHowever, eventually, investors faced significant losses when the frenzy receded, leading to dire consequences for many.

This does serve as a stark reminder that in such a colossal market as the A-shares, it is pivotal to experience a "making money effect" to rekindle investors' confidenceIf not, funds will continue to flow in unpredictable ways, with no attempts to reign it in.

In this respect, the suspension of the ETF trading might actually be a blessing in disguiseThe trading volume of these cross-border ETFs sometimes exceeds several hundred billion daily, which severely drains resources from the A-share marketWith this ban, investors can shift their focus back toward reviving the domestic market!

Observing the market:

Several prominent figures in the investment community have seemingly ushered in the New Year with early celebrations

As a result, trading activity has slowed considerably in recent days, with today's volume standing at merely 11.1 trillion yuan, depicting a severe reduction in trading.

Despite this, market sentiment appears to be improvingAfter witnessing around seventy to eighty stocks hitting their upper limits yesterday, we saw close to one hundred such instances todayThis marks the third consecutive day of warming market activities.

However, sector rotations are taking place at a rapid pace, with trends varying so quickly—Monday focused on flu-related stocks, while Tuesday saw a strong interest in AIMeanwhile, Wednesday was devoted to robotics, and Thursday emphasized PCB technologies

Much of this momentum seems driven by quantitative investments, as evidenced by the participation of many of the most popular stocks showing massive volatility.

On the trading floor, the technology sector trails closely behind with the highest interestToday, themes such as PCB, robotics, and computational power are competing robustly against one another! In second place is consumer spending, which includes sectors like gifting through WeChat, supermarkets, and food consumption.

Elon Musk recently made a significant statement, predicting that Tesla would manufacture thousands of Optimus humanoid robots this yearHe anticipates production will increase tenfold next year, and double again the following year!

While there may be some exaggeration in what Musk claims, it’s undeniable that we’re approaching a crucial point for mass production of humanoid robots! Historically, the A-share market has rallied around a theme, and this transition to volume production is destined to attract significant attention and investment.

In the field of computational power, NVIDIA's Blackwell is fully operational, propelling the computational sector into a frenzy, with multiple directions such as PCB, data centers, and liquid cooling gaining momentum

Much of this speculation pivots around the ambitious goals set forth by its CEO, Jensen Huang!

In summary, NVIDIA is currently performing remarkably well, creating new possibilities in AI and elevating the significance of the industryFor A-shares, this primarily reflects the domestic computational power narrative, which is likely to undergo repeated speculative cycles.

Every era in the A-share market tends to focus on its "champions": first it was Moutai, followed by CATL, then compared with Apple and HuaweiAt present, the spotlight is on NVIDIA and Tesla, with the current investments either targeting the NVIDIA industry chain or the Tesla network, making it almost inescapable!

Overall, I remain optimistic about the technology sector, even though the internal rotations are accelerating, and funds frequently shift in two-day cycles

As long as major players like SMIC, ZTE, Cambricon, and GigaDevice maintain their ground, capital will persist in rotating within tech stocks, providing plentiful opportunities for investors.

Currently, the A-share market seems to lack substantial opportunities, primarily due to three looming concerns:

Firstly, the approaching tariff battle presents considerable export and depreciation pressures;

Secondly, the year-end performance forecasts are expected to surge in mid to late January, with poor expectations combined with new delisting regulations increasing the risk of junk stock collapses;

Finally, the prolonged policy void makes it difficult for fiscal policy to gain traction before the Chinese New Year, as cutting reserve ratios and interest rates is challenging

Major initiatives are anticipated to emerge around the New Year!

Under the weight of these three concerns, market confidence appears to be shakyWhy, then, has the market remained somewhat stable over the past few days? How has the 3200 point level been defended multiple times?

The answer largely points to mysterious funding that is stepping in to prevent further declines below the 3200 threshold.

Goldman Sachs recently upgraded ratings for several Chinese banking stocksAfter downgrading China Shenhua's rating yesterday, it plunged today, while it upgraded several banking stocks like Agricultural Bank, Industrial Bank, Bank of China, and China Construction Bank tonight

Tomorrow may see a concerted effort to protect the market with banking stocks.

The Civil Aviation Administration announced plans to vigorously promote general aviation and low-altitude economic development by 2025, actively expanding low-altitude flight application scenariosFollowing recent surges in robotics and AI applications, could we witness a similar spike in low-altitude sectors soon?

Militarized corporations are experiencing a surge in bulk orders, with Hongdu Aviation securing substantial contracts, followed by Guokai Military Industry and Dali Technology, which revealed an order for 739 million yuan of munitions.

Xinda Real Estate announced a 20 billion yuan fund aimed at alleviating real estate industry woes alongside other partners

This is a significant step, marking the first real estate relief fund in A-shares and will be interesting to observe the ripple effects it creates within the real estate chain.

Wuliangye has halted the distribution of several of its productsRecent reports confirm that distributors have ceased to supply Wuliangye, a development that has been validated post-market hours!

The foremost issue facing the baijiu industry now revolves around inventory levelsExcept for Moutai, most companies are grappling with this challengeAs a runner-up in the industry, Wuliangye's decision to halt distribution can effectively reduce baijiu inventory in the market, stabilize prices, and maintain market sentiment.

What remains crucial is Moutai

If they continue to increase supply without restraint, we could see their prices drop below 2000 yuanThe decline in Moutai prices could severely impact Wuliangye and other brands, ultimately collapsing the entire baijiu price system.

The dilemma in the baijiu sector now is that not halting supply won’t stabilize prices, but stopping might hurt performance, making it a complicated situation! Indicators suggest that this year's Spring Festival might witness negative growth in baijiu sales, prompting caution among investors in baijiu stocks.

The central bank issued 60 billion yuan in central bank bills, aiming to maintain the yuan exchange rate at 7.37. The central bank's actions today set a record for the single largest issuance in history!

The primary goal here is to stabilize the exchange rate and reflects its current priority

Historical precedents indicate that when the central bank intervenes vigorously, a stable yuan becomes highly probableRight now, all eyes are on potential reversals from the dollar.

When the yuan exchange rate ultimately reverses, we can expect a significant upsurge in Chinese assetsHowever, this process requires time; initial analyses suggest that the LPR on January 20 will likely remain unchanged, and whether reserve ratio cuts materialize depends on market performance.

In Hong Kong, shares of Brooko are reportedly surging over 70% in dark tradingBrooko is set to list on the Hong Kong exchange tomorrow, leading the charge in assembling character-based toys and capturing 30% of the Chinese market

It revolves around IPs like Ultraman, Transformers, and Hero Infinite.

The company has garnered immense attention, with investors drawing comparisons to Pop Mart, believing it may replicate their astonishing success! Based on dark trading prices, Brooko’s latest valuation stands at approximately 24.9 billion HKD, whereas Pop Mart stands at 116.8 billion HKD, indicating room for more speculative trading.

For A-shares, the focus should be directed towards harvesting opportunities within the valley economy concept stocks, and engaging with the toy sector, alongside Brooko's collaborations.

In recent years, some Hong Kong listed companies have performed commendably, indicating a promising future

Yet, it has been quite some time since A-shares saw new, significant company listings; currently, speculative frenzy swirls around stocks with outrageous spikes—for instance, one fertilizer stock skyrocketed 20x on its debut, which is mind-boggling!

Reflecting on the current A-share market, it finds itself in an awkward position: unable to drop due to waning short-seller strength and struggling to muster a rally due to inadequacies in bullish force.

Short-sellers are ready to make a move, but the national team is positioned to protectMeanwhile, bulls are seeking opportunities but require substantial positive stimuli for breakout! Since September last year, the A-share market has developed a tendency to reward those who cry loudest while neglecting others, leading to a deep-seated ritual.

As for the national team, its approach seems to remain passive—merely absorbing without actively pushing! This strategy helps reserve enough capital to confront future challenges as they arise, remaining on standby for potential market corrections.

Nevertheless, here’s some good news: January is historically the toughest month for investors, fraught with loss-making sentiments, while February typically emerges as the most lucrative month of the year