Market Volatility Will Intensify, Shanghai Must Effectively Break Through 3400 Points.

The SFC announced further investigation into the two financial activities.

Shanghai

Again, we encountered major resistance at 3400 points, as we discussed in the "price and value of the Chinese market: Shanghai equivalent to 3400" and "five accidents in China in 2015 years".

As leverage increases, market volatility will intensify, and regulators will have more moves.

The ratio of futures trading to spot trading fell to a new low, suggesting the resistance of the market.

The performance of the leading sectors such as finance and real estate began to lag behind.

The securities and Futures Commission found that the violation of the two financial businesses of China's three largest brokerages and the sensitivity of the market to the news showed that the risks are constantly accumulating, and the regulatory authorities have paid attention to them.

As we mentioned in the previous report, "the two financial investigation detonated the position and the Shanghai bubble bubble point =4200", the Shanghai stock exchange must effectively break through 3400 points before it finally enters the 4200 point bubble channel.

We will continue to investigate the two violation activities: after the market closes on Wednesday, the media will report that the SFC will continue to investigate the two financial activities of the remaining 46 brokerages.

The A50 futures traded on the Singapore market fell for as many as 5%, until the CSRC clarified through Xinhua that this is only a routine investigation.

The media also reported that bank funds were strictly prohibited from entering the two financial markets.

News.

A50 futures eventually recovered part of the land lost, but it still fell more than 2% all day.

The Shanghai stock market is again weak at 3400 points, and the 3400 point is the important resistance level we proposed in the "price and value of the Chinese market: the Shanghai Stock Exchange equals 3400" and "2015 accidents in China five accidents".

As leverage levels continue to rise, investors should expect market volatility to increase and regulatory authorities will continue to regulate financing activities: the timely clarification of the SFC's actions has given many market participants a sigh of relief.

But we have reservations.

We try to infer the movements and market trends of regulatory authorities from some known facts.

What we know now is: 1) illegal financing activities have been rampant lately, while umbrella trusts and other tools have provided two regulatory liquidity without supervision.

The securities and Futures Commission found that the two irregularities of the three major securities dealers, and even the reports on the two financial investigation, had made such a big response to the market, implying that market risks had reached the level enough to arouse the attention of regulators.

The share of stock index futures and spot trading fell to the bottom of history.

Historically, this situation often indicates that the market is facing resistance.

Over the past few years, stock index derivatives trading has seen explosive growth in Asia.

Because the market volatility is low by the global central bank's artificially low ground pressure and the yield is declining, global investors have to add leverage to magnify the yield.

Some commodity futures exchanges in China have also become one of the largest futures exchanges in the world.

The KOSPI index also had to increase demand for futures contracts to suppress retail speculation.

Our data analysis shows that the main futures contracts (i.e. the largest contract holders) are the obvious converse traders. They tend to have the greatest paction activity compared with the spot traders when the market is low, and vice versa.

Recent data show that index futures trading volume has fallen to a historical low, while stock index has risen to a high level.