Chapter 1434 [Panic Selling]

Institutions, large investors, and small investors that were leveraged or allocated funds all released concentrated selling pressure, and the market index simply couldn't hold it back and immediately staged a flash crash-style dive.

None of them want to be locked up in a dark room for a year, and they are also afraid that they will receive a one-year gift package from the dark room, so they dare not take any chances.

After the NSE 50 index fell below 5,500 points, the 5,400 point mark was not taken over, and it was easily broken through directly, and it was still testing downward, and then the 5,300 point point was also broken down.

Ever since the news flash pop-up window came out, the entire market has been in a unilateral downward trend without even a counterattack, swallowing up all the gains since April, and even more than half of the gains in March.

The Shanghai and Shenzhen stock markets next door also followed suit. When the New Securities 50 Index suffered a huge drop, it was impossible for the two markets next door to stay aloof.

Moreover, there are leveraged funds and over-the-counter capital allocations in the Shanghai and Shenzhen stock markets, which makes these people panic.

At this moment, the entire market is going on a panic stampede to flee. Those who are leveraged are frantically cashing out and deleveraging. Profit-taking funds are fleeing regardless of the cost. People who added positions or chased prices in the early trading also see the trend of the entire market leaking wildly. Bengbu stopped and regretted slapping his thigh.

The major stock forums and communication groups are in a state of flux at the moment.

[As soon as I got in the car, I ate noodles, crap! ]

[Run--! ]

[In the morning, I added positions to see a new high. Now everyone is stupid. ]

[Turn off the lights and eat noodles...]

[Okay, April was in vain and I lost 2 points. Today, the big negative line fell. It is basically no suspense to confirm that the 5554.06 point on April 8 is the top of this market. ]

[Since the day before the surge on February 25, the management has been emphasizing not to use leverage or allocate funds, but some people just don’t listen. Even if the stabilization fund sells 1 trillion yuan, it can’t stop it, so it keeps going all the way... (face covering/jpg)]

[The market soared from 4194.73 points at the beginning of the year to 5554.06, an increase of more than 1350 points, and a cumulative increase of +32.4%. It is indeed a crazy increase. ]

[I remember that there are a few veterans in our group who are involved in over-the-counter capital allocation, and there is also one who uses certain treasures to borrow money to add positions...]

[Made, it’s so exciting, it’s already out (laughing and crying.jpg). This retracement cost me 25 points, and I almost lost my principal. I will pay back the money tomorrow and never use leverage again. Damn, it’s for nothing. Playing, luckily I kept an eye on the game today, otherwise I would have lost my rhythm! ]

[You are lucky. You have a profit margin but it is a retracement. You have escaped a disaster. Those who chase the high today will be miserable, and it will be even more miserable if they are leveraged. ]

[Others are afraid that I am greedy, so I want to enter the market and buy the bottom...]

[Take it easy. ]

[Anyway, I didn’t add leverage, I just built a bottom position first. ]

…

As of the close, the three major A-share indexes fell across the board.

The SGX 50 Index plummeted -4.73%, the largest one-day decline in the past two and a half years, closing at 5277.28 points after the market. The SGX market turnover increased significantly to 1,235.3 billion; the Shanghai Stock Exchange Index plummeted -1.70%, to 3215.04 points. The turnover was 359.2 billion; the Shenzhen Component Index fell sharply -1.86% to 10224.31 points, with a turnover of 445.1 billion.

The total transaction volume of the three major markets was 2,039.6 billion.

The SGX market showed a general downward trend today, with only more than 80 red stocks among more than 1,600 stocks, of which as many as 137 stocks fell to their limit.

Funds from all walks of life have basically confirmed that a real major adjustment is coming. This super-large negative line has poured down, and it has been established that 5554.06 points is the stage high point of the New Securities 50 Index. It is impossible to break through in the short term. The first half of this year is No need to think about it.

It is obvious that the management pulled out four unlucky eggs to sacrifice, and it has become intolerable to off-market capital allocation and leveraged funds.

If the funds on the market are leveraged and allocated and are not dealt with, these four unlucky guys will learn from the past. The leveraged funds and allocations on the market are very sensible, and they will not dare to impose a hard cap but will deleverage and allocate their own dignity.

Because you don’t want to lose face, someone will help you face it later. The market ban package is a more powerful deterrent to big funds. Big funds would rather be fined than enter a dark room.

What is certain is that today's big Yinxian sell-off is just the beginning, and the reason is very simple. It is impossible for all the leveraged funds and allocations on the market to be sold out today. This is something most people know.

It is unlikely that too many funds will enter the market before the liquidation of leveraged funds is completed, and leveraged funds will not dare to leave under the shock of being banned from entering the market. It is inevitable that the market will continue to decline.

The market is plummeting today, and the reasons are pretty straightforward.

It was the SGX management's heavy attack on over-the-counter capital allocation and leveraged funds, which caused many people who were chasing prices to suffer a big loss in early trading.

However, after the market closed, judging from the discussions in major stock forums and communication groups, almost no one criticized the management of SGX for crashing the market. Even those who ate a lot of money, most of them pinched their noses and admitted it. Too bad, in the past, he would have been scolded in all kinds of ways.

The reason why everyone did not point the finger of blame for the market crash at the SGX management was that they still had some doubts in their minds. Most of the people who took advantage of the big losses in this wave knew in their hearts that they were not innocent, and many small traders secretly traded on the exchange. Without leverage, even borrowing money to lengthen the SGX 50 ETF, let alone having the authority to speculate in SGX stocks.

And since February 22, the management of the SGX has repeatedly stressed that people should not use leverage or margin trading, and should invest normally and not bring illegal funds into the market. The wording has become more and more severe, and the stabilization fund has released trillions of selling pressure.

But few people listened.

In the final analysis, it is still greed that cannot be restrained. They all want to get rich in a big bull market and achieve financial freedom, and then they can always eat and drink well without working in this life.

The management of the SGX has repeatedly stressed, but most people are lucky, thinking that it should be okay to add a little leverage to make more money. They didn’t copy the bottom and didn’t make much money. What’s wrong with adding a little leverage?

The problem is that there are many people who think this way. There are almost as many people with similar ideas as there are funds that have missed opportunities, which is reflected in the entire plate. It is a very large volume. They know that adding leverage and margin trading is not good, and they also know that the management is right to crack down on margin trading and leverage funds, but everyone has their own little selfishness.

Now that the profit has been drastically withdrawn, there is no reason to blame the management of the SGX. After all, there is nothing wrong with the management's approach. The lesson of 2015 is there.

If the SGX 50 Index is pushed up to 10,000 points by leveraged funds and off-market financing, and then deleveraging is carried out to cause a market crash, it will inevitably be another epic disaster, and it will be more serious than the one in 2015.

In the next five trading days, the SGX 50 Index continued to decline with shrinking volume, and it has fallen for six consecutive days including the big negative line on April 22.

In these five trading days, the declines were -1.24%, -0.48%, -0.97%, -0.82% and -0.62% respectively. The SGX 50 Index also pulled back to 5062.98 points, and the latest daily trading volume also shrank to more than 700 billion.

The cumulative correction in six trading days was -8.84%, and this wave of continuous declines also filled the gap on February 25.

This market correction was expected by most people. The only unexpected thing was that the decline in these five days was less than most people expected. When the big negative line on April 22 burst down, everyone thought that the market would drop another 3 percentage points the next day, but it only fell by -1.24%.

It was not until the close of the next day that I understood why it did not continue to fall. It turned out that the SGX trillion stabilization fund took action to support the market. Public data showed that it received a huge amount of 130 billion on that day. If the stabilization fund had not taken action, the irrational panic selling would definitely continue.

… (End of this chapter)