After last Friday's sharp fall, all snowball products were liquidated, and at the end of the week I said that the biggest short-selling momentum has been fully released, and ** will bottom out at any time. The reason is irrationality, there will be external capital intervention to the bottom in an instant, and the bottom of the response is the culet, and it is generally impossible to grasp the culet.
Yesterday's sharp fall caused many financing orders to blow up, so that the empty momentum has been fully released. When all the short kinetic energy is released, as long as there is a little capital, it can promote the formation of a reversal. Yesterday's big reversal was formed by the intervention of bailout funds, but the bailout funds did not last, resulting in some repetition at the end of the market.
There are two reasons for the recurrence of the tragedy of this round of stock market crash. One is that because of the continuous **, the snowball product sold by the brokerage has lost nearly 30%, and the snowball product is about to expire, and the brokerage has to pay the interest due. In order to pass on the losses and not pay the interest due, the brokerage company has to short the CSI 300 and CSI 500 indexes by securities lending, suppressing the index below the betting point of the snowball product, making the snowball product liquidate, which is the biggest momentum for shorting the market. When the index came to the liquidation point of the snowball product, many financing orders reached the liquidation point, forming a second killing, resulting in the recurrence of the tragic scene of yesterday's 1,000-share falling limit.
The second reason is that managers are insensitive, and they do not respond effectively to systemic risks caused by continuous **. Even if it is so tragic, the inflow of bailout funds is still hidden, and the new shares are still issued, regardless of the life and death of all investors.
Lao Tzu said in the Tao Te Ching that heaven and earth are not benevolent, and all things are used as dogs, and saints are unkind, and people are used as dogs. In **, in order to explode snowball products, brokerages have achieved the ultimate in inhumanity and injustice, and the insensitivity of managers has also been achieved to the extreme, and the remaining small investors are not even as good as dogs.