The A Share Market Has Finally Proved The Stock Market Experience Of "Long Trading Will Fall".

This Monday, the Shanghai Composite Index fell 1.76%, fell below the 3000 point mark; Tuesday and Wednesday, although attempted to attack 3000 points, but due to lack of confidence and low volume of trading, the turnover of Wednesday hit the lowest level since March 11th this year, and the market is still in a weak position.

The author believes that in the case of bad factors continue to plague, the recent market is hard to rebound.

The underlying reasons for Monday's market break down were: the sharp drop in oil prices,

U.S. stocks fell lower than expected on Friday, and agencies expected short-term or peaked U.S. stocks, which affected the mood of domestic investors. Last weekend, 12 companies were granted IPO and total financing was 15 billion 500 million yuan. Shanghai bank ranked among them, and the market was worried about the expansion of IPO.

The deeper reasons include the following aspects.

First, because of the structural overvaluation of A shares, capital is continuing to flow into other undervalued markets.

Data show that from September 19th to 27, a total of 7 trading days, the Shanghai and Shenzhen two cities net outflow of 100 billion 920 million yuan, industrial capital in the two level market showed a net reduction status, such as September since the listed companies total reduction of 33 billion 430 million yuan, is to increase the size of 3.75 times (since September, the total increase of 8 billion 899 million yuan), this year third wave reduction peak (June reduction of 42 billion 871 million yuan, July reduction of 44 billion 10 million yuan); on the other hand, Hong Kong stocks make money and underestimate the value effect, driving the mainland funds continue to go south.

Since the low of February 12th this year, the Hang Seng Index has risen steadily by about 30% this year.

Data statistics, in August, Hong Kong stocks bought a daily average of HK $1 billion 33 million, in September, Shanghai and Hong Kong through continuous three weeks of net inflow of funds, in from September 19th to 27th, in addition to 22 and 23 days, a net northward flow, 5 trading days still appear net capital inflow of Hong Kong stocks, an average daily net inflow of 4 billion 36 million yuan.

Second, the impact of real estate policy adjustment and control on the market is beginning to show.

Compared with the control of real estate in many areas in August, the restriction and restriction policy of real estate is limited. In September, the regulation policies in some parts of the city were more stringent. For example, in September 28th, Hangzhou raised the proportion of the two suites of the provident fund loans and the proportion of the first payment of the two apartments of the commercial housing loans. The proportion of the first payment of the two suites of the provident fund loans and commercial loans was adjusted to no less than 50%, while the suspension of the purchase of houses and households was also suspended. The three arrows went on to safeguard the sustained and healthy development of the Hangzhou real estate market. The departments concerned began to implement the real estate control measures more strictly, such as the recent implementation of the new regulation of the real estate regulation by the Shanghai stock exchange, which has tightened the related conditions of the company bonds.

Third,

Downward pressure and asset price pressures also force central banks to not relax.

Instead, it has the intention of tightening monetary policy too loosely.

In September 26th, the central bank carried out 120 billion yuan 14 days reverse repurchase, 10 billion yuan 28 days reverse repurchase, and the open market that day had 375 billion yuan reverse repurchase expired. Accordingly, the central bank totally recovered 245 billion yuan, a record of 6 months.

But at the same time, we should also see that although the market is hard to shake off the weak shocks in recent years, the probability of falling below the 2800 bottom market this year is not great.

First, stabilizing the economy and driving up the profit growth of enterprises will help boost the market.

From 1 to August, the total profits of Industrial Enterprises above Designated Size reached 4 trillion and 58 billion 360 million yuan, up 8.4% from the same period last year, and the growth rate was 1.5 percentage points faster than that of 1 to July.

Among them, the profit in August increased by 19.5% over the same period last year, and the growth rate was 8.5 percentage points faster than that in July, the highest monthly growth rate in the year.

Second, the government has a strong driving force for stabilizing the economy and achieving steady growth.

In September 5th, Premier Li Keqiang chaired the executive session of the State Council. He stressed that we should seize the favorable opportunity of raw materials and other commodity prices, increase the intensity of the implementation of the proactive fiscal policy, deploy more efforts in the key areas and weak links, and optimize the policy "formula" to make a good combination of punches. At the same time, we also point out that we should increase the investment in the central budget, invest in the weak links of water conservancy projects and the construction of urban waterlogging prevention facilities, and pay more attention to the cooperation mode between the government and social capital.

And all localities also responded positively, and the number of PPP projects financing has reached a new high.

In 2014, the Ministry of Finance launched the first 30 PPP demonstration projects, with a total investment of 180 billion yuan. In 2015, the number and total investment of the second batch of PPP demonstration projects were 206 and 658 billion 900 million yuan respectively. The number of national projects listed on the third batch list in 2016 was over 500, with a total investment exceeding 1 trillion yuan.

These factors will become the short-term support for A shares, and the bottom of the Shanghai Composite Index will still have strong support at around 2800.