The A Share Market Is In Line With The Three Characteristics Of The Bull Market.

China's stock market has been one of the most powerful stock markets in the world in the past year, especially in the 4 quarter of last year, with a return of 45%. With the consolidation of A shares, a big question for investors is whether China's stock market is entering a new round. bull market Goldman Sachs's answer is yes. equity market It is entering a continuous upward trend.

Goldman Sachs said that even if this rally were finally proved to be merely a rebound, the possibility of a big drop in the market from the current position would be small in terms of economic growth, policy, liquidity and valuations.

"In other words, we think it is advantageous to do more risk return ratio in China, because the potential cost of stepping up in market valuation may exceed the opportunity cost involved in a false rise," Goldman Sachs analysts said.

Based on the analysis of the 34 bull market in the world's major stock markets over the past 40 years, Goldman Sachs found that the average bull market lasted for 4.9 years and the compound annual return rate was 43%, and it had the following 4 characteristics:

1) strong Macroscopic And micro fundamentals growth;

2) "state change", usually driven by political or policy changes, and some important market events, including market liberalization and benchmark index changes.

3) loose monetary policy is characterized by a decline in nominal and real interest rates;

4) equity market Initial valuation and profit expectations are low.

Goldman Sachs pointed out that among the 4 characteristics, China's stock market is all satisfied except for the first one. Goldman Sachs predicts that in 2015, China's reform will accelerate and a high level of monetary base (since the financial crisis, China's M2 growth exceeds the sum of the US, Japan and Europe), and the flow of capital from the property market to the stock market and further monetary easing will result in an excellent liquidity environment, while the stock market valuation is attractive.

According to Goldman Sachs analysts, China's stock market is in the early stage of the bull market, and A shares and H-shares are expected to continue to rise by 30% by the end of 2016. However, Goldman preferred H-shares for fear of some technical characteristics of A shares. Goldman advised investors to focus on reform and policy beneficiary stocks, as well as more sensitive stocks.

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In March 5, 2015, stock index futures recovered, and a small line with a shadow line was collected. How will the stock index go next?

The stock index is still brewing and gaining momentum for the new round of rise. Some friends asked, since the stock index is still in the interval, there are two downward gapped gaps left on Tuesday and today, leaving another upward gap in February 13th, according to the gap theory. What is possible is that the index first makes up the two downward gap gap and hits 3406, then down to fill up the upward gap in February 13th. The other possibility is to first fill the gap of the upward gap in February 13th to form a relay situation at the bottom of the head and shoulders, and then launch a new wave of main waves. If it is the former, it will give everyone a chance to lighten up in the process of high inflation; if it is the latter, it will only be adjusted to several dozen to one hundred points, and then a new wave. We think the former is more likely, but no matter what kind of situation, the situation will not be bad. You know, it's just a relay in the middle of a bull market.

The small and medium board index and the gem index again hit the new round of the current market, the trend of rising is obvious, and no matter whether it is the daily line or the weekly line, there is no sign of peaking. This means that there will be a new high in the later stage, and the opportunities for individual stocks are still there.

From October to the end of December last year, mainly the heavyweight shares rose, the small and medium board index and the gem index were on the side; in January this year, the small and medium board index and the gem index took the lead. The bull market is constantly switching between the heavyweight and small cap stocks. We must recognize this point because the handover between the next heavyweight and small cap stocks is getting closer.