Tianfeng: Although rebounded as expected, the right indicator has not been triggered yet.

Tianfeng released a research report stating that, overall, in the downward trend pattern, the key focus is on whether the market risk control line has been effectively broken through. Once broken through, it means the pattern has reversed, ending the downward trend. At the same time, combined with valuation and trading volume, left signals have gradually emerged, indicating that long-term funds are suitable for phased deployment, but opportunities for heavy positions still require waiting for right signals to appear in the market. Key points from Tianfeng are as follows: Last week's report believed that in the downward trend pattern, the key focus is on whether the market risk control line has been effectively broken through. Once broken through, it means the pattern has reversed, ending the downward trend. At the same time, combined with valuation and trading volume, left signals have gradually emerged. In the short term, significant macroeconomic events are likely to lead to a brief rebound in the market. Last week, the Wind All-A Index rebounded as expected, rising by 1.27% over the week. From a market capitalization perspective, the China Securities 2000 Index, which represents small-cap stocks, rose by 1.32%, the CSI 500 for mid-cap stocks rose by 1.07%, the CSI 300 rose by 1.32%, and the SSE 50 rose by 1.24%. Among the industries in the CSI First-tier Industry Index last week, real estate and non-ferrous metals performed the best, with real estate rising by 6.99%; while pharmaceuticals and agriculture, forestry, animal husbandry, and fisheries performed the worst, with pharmaceuticals falling by 0.79%. Last week, the real estate and food and beverage sectors saw significant inflow of funds. From a timing system perspective, the distance between the Wind All-A long-term moving average (120 days) and short-term moving average (20 days), which the bank defines to distinguish the overall market environment, continues to widen. The latest data shows that the 20-day moving average closed at 3948, while the 120-day moving average closed at 4241 points, with the short-term moving average still below the long-term moving average. The distance between the two lines changed from -6.72% to -6.91%, with an absolute distance greater than 3%, indicating that the market continues to be in a downward trend pattern. The market is currently in a downward trend pattern, with the key variable to watch being when the right-side indicator market risk control line will be upwardly broken through, and when the profit effect will turn positive. Currently, the right-side indicator market risk control line is near the 45-day moving average, with a profit effect of -3%. Once the 45-day moving average is effectively broken through, it means that the downward trend has been reversed, but caution should be exercised before that. From the left side perspective, the entry signals are gradually emerging, with the valuation index at an extremely low level, the turnover rate of various market indices close to historical lows, and long-term funds suitable for phased deployment. In general, in the downward trend pattern, the key focus is on whether the market risk control line has been effectively broken through, once broken through, it means the pattern has reversed, ending the downward trend. At the same time, combined with valuation and trading volume, left signals have gradually emerged, indicating that long-term funds are suitable for phased deployment, but opportunities for heavy positions still require waiting for right signals to appear in the market. In terms of industry allocation, the bank's industry allocation model shows that the current industry allocation is shifting towards contrarian sectors, with recommended sectors including pharmaceuticals/securities/computers; additionally, in September, TWOBETA model continues to recommend the technology sector. In the current industry, attention is advised on pharmaceuticals/securities/computers, as well as electronic and communication sectors. From a valuation perspective, the Wind All-A Index PE is near the 10th percentile, indicating a low level, while the PB is below the 5th percentile, indicating an extremely low level. Combined with short-term trend judgment, according to the bank's position management model, the recommended position for absolute return products focusing on Wind All-A stocks is 70%. Timing system signals show a distance between moving averages of -6.91%, with the distance exceeding the threshold of 3%, indicating that the market continues to be in a downward trend pattern. The market is in a downward trend pattern, with the key variable being when the right-side indicator market risk control line will be upwardly broken through, and when the profit effect will turn positive. Currently, the right-side indicator market risk control line is near the 45-day moving average, with a profit effect of -3%. Once the 45-day moving average is effectively broken through, it means that the downward trend has been reversed, but caution should be exercised before that. From the left side perspective, the entry signals are gradually emerging, with the valuation index at an extremely low level, the turnover rate of various market indices close to historical lows, and long-term funds suitable for phased deployment. In general, in the downward trend pattern, the key focus is on whether the market risk control line has been effectively broken through, once broken through, it means the pattern has reversed, ending the downward trend. At the same time, combined with valuation and trading volume, left signals have gradually emerged, indicating that long-term funds are suitable for phased deployment, but opportunities for heavy positions still require waiting for right signals to appear in the market. The bank's industry allocation model shows that the current industry allocation is shifting towards contrarian sectors, with recommended sectors including pharmaceuticals/securities/computers; additionally, TWOBETA model continues to recommend the technology sector. In the current industry, attention is advised on pharmaceuticals/securities/computers, as well as electronic and communication sectors. Risk Warning: Market environment changes pose risks, and the model is based on historical data.