Updated on the weekend of 4/6

The Qingming holiday is over. During these three days of the short break, there have also been many new developments in the situation in the Middle East. Over on “Huang Mao’s” side, they are now shouting for Iran to quickly surrender on April 7–8 and open the Strait of Hormuz. In the meantime, the mediator is currently working hard to reach a 45-day ceasefire agreement. It’s simply trying to get both sides to stop fighting first, and then slowly reach an agreement afterward. As of now, this matter still has no clear outcome. This is definitely the result that “Huang Mao” wants, but in my personal view, Iran will not agree, because right now Iran has no reason to accept a ceasefire.

These past three days, the U.S. has had its fifth-generation fighter jets directly shot down by Iran’s “new” air defense system. This means the U.S.’s air power is not in a “come whenever you want, leave whenever you want” situation anymore. These are fifth-generation stealth fighters—yet they were shot down by Iran’s newly fielded air defense system. Even the pilots need to have people dispatched continuously for rescue. Most likely they were rescued, but in order to rescue them, they lost a lot of American soldiers as well. Most likely, this air defense system was provided by Russia/Eastern Europe (“Dabai’e”). Because if Iran had it already before, then when the war first started, they would have used it right away—they wouldn’t have waited for one month after the war began to deploy it.

I think, most likely, during Iran’s坚持斗争 (stubborn resistance) over this past month, Iran made Russia/Eastern Europe and other countries see the value of what Iran could do, and also see the determination behind Iran’s stubborn resistance. So Russia/Eastern Europe and other teams’ support for Iran would increase, and only then could Iran obtain a new air defense system capable of shooting down fifth-generation aircraft.

[Taoguba] Everyone can think about it: in today’s world, the number of countries that can have fifth-generation fighters is extremely small. And those countries that don’t even have fifth-generation fighters also, most likely, cannot develop air-defense systems capable of shooting down fifth-generation aircraft—because they basically have no simulation target. So this entire system is basically something only those major powers that possess fifth-generation fighters would have. Then it’s provided to Iran, and besides Russia/Eastern Europe, it could also be provided by the “panda” (China), because it may well be that we want to test the real combat capability of this air defense system. After all, nobody has truly had the chance to face the U.S.’s fifth-generation fighters in an actual war. And in actual combat, with this new air defense system, they can shoot down the U.S.’s fifth-generation jets without pressure. Other times, you don’t have that kind of real combat opportunity.

It’s like when North Korea previously sent troops to support Russia: they directly ruled out “U.S. troops” launching an attack on Ukraine. In one sense, it’s military mutual assistance—exchanging for corresponding benefits. On the other hand, during a time when their own country was at peace, they also used this opportunity from another country to obtain valuable real combat experience. For major powers that have been in peace for a long time, this is also a very good opportunity—to bring this real combat experience back to their own country, use it to train new military branches, and greatly enhance the overall army’s real combat capability. This is also one of the things North Korea wanted.

So, to put it plainly, this new air defense system was probably secretly given by Russia/Eastern Europe or the panda, because both of them have reasons for giving it. Also, Russia/Eastern Europe has reached new defense trade deals with Iran. Russia/Eastern Europe’s new fighter jets are also gradually being sent to Iran. In this Russia–U.S. war / U.S.–Iran war, oil prices have surged violently, and Russia/Eastern Europe has made a fortune. I’ve said before that no matter what Russia/Eastern Europe says on the surface about promoting peace talks, behind the scenes it’s impossible. If you’re Russia/Eastern Europe, you also want the U.S. and Iran to keep fighting—not only to tie down the U.S. in the Middle East war and divert its pressure from the Ukraine battlefield, but also to sell high-priced oil like crazy and make a killing. So if you’re Russia/Eastern Europe, you would also secretly keep feeding Iran.

As for us, right now the U.S. hasn’t truly been pulled into a full-scale Middle East war. Most likely, we’re still waiting for a better opportunity—waiting until the U.S. has tens of thousands of troops truly bogged down in a ground war in Iran, fighting in such a way that they can’t extricate themselves. Then that rare chance to take back Taiwan (“Wanwan”)—I think it’s also very likely to be something we should be able to seize.

Overall, I currently believe Iran is impossible to accept a 45-day ceasefire agreement. At the same time, “Huang Mao’s” recent past two days—setting the latest deadline for opening the Strait of Hormuz—Iran also won’t pay any attention to it. As for after the “final deadline” that “Huang Mao” said at 8:00 a.m. on April 8 expires, whether they will carry out even fiercer bombing on Iran, or whether they will truly deploy ground troops to attack Iran—maybe “Huang Mao” themselves don’t know it either right now. Only the future “Huang Mao” will know. But today, Iran also said: as long as the conflict continues to escalate, they will jointly with their “little brothers” directly seal the Strait of Mandeb as well. If Mandeb is really sealed, then at the moment the news comes out, Brent crude could very possibly jump to 130+ within a single day, and on that day, China’s A-shares (“the A share market”) could very possibly crash directly by 3%–5%+.

Last year, on April 7, there was an epic-level selloff. Tomorrow is also April 7 again. But I personally think this time will be much better than last time. Last time was a surprise piece of news after market close. Back then, positions were also large. And now, since the reminders I posted on March 15—cutting positions when it broke 4080, cutting when it broke 4050, and cutting when it broke 4000—three consecutive position cuts were made. So positions are much lower now. Also, I said: if you truly have a big heart and can take risks, then you can bottom-fish around 3815 to bet on a rebound. And it indeed went smoothly—rising from 3800 to the 3950 level.

On April 1 at 3950, I also said to cut positions, because after the gap was filled, there wasn’t upward momentum. So if everyone also cut positions at 3950, then it’s basically like we repeatedly cut positions at high levels three times to escape the top, then did a bottom-fishing for an oversold rebound around 3800, and at 3950 again, we escaped the top one more time. This “escaped top” was the top of the rebound. Looking at index forecasts, when it was time to escape the top, everyone basically did escape it a lot.

For those who wanted to bottom-fish and bet on a rebound, I gave the index levels—around 3815. When it’s time to bottom-fish for a rebound, in terms of the index’s odds/handling, I believe what we did over these two months has been okay. Also, at the beginning of March, I said my view: at least until early April, the war would not stop, and oil would still rise.

Now, based on the current state of the external markets and the impact of the Middle East war, with it being early April, I’m sharing my personal view in advance again. I believe this Middle East war will continue to be maintained at least until early May. And Brent crude’s price will most likely break above and consolidate over 120 yuan this month. If the conflict escalates and the Strait of Mandeb closes, then this month Brent crude could reach 130+ directly, and even touch 150+ in the short term. At the same time, after the Shanghai Composite Index (“SSE Composite”) has filled the gap at 3950, it will most likely continue with a downward-and-sideways trend. I think the support level around 3800 should still be broken. The next support level depends on 3730. That level is the biggest support in many retail investors’ minds—after all, the 10-year bull/bear boundary line is there. So right now many retail investors and old stockholders aren’t selling at a loss; they believe the bull market still exists, and the 3730 support is still holding down below.

Meanwhile, the market has been constantly shrinking volume. Retail investors don’t want to cut losses, and they don’t want to hand over the shares they hold. That means for the main players (“smart money”), they need to smash it down until the retail investors’ inner dream of the bull market collapses, and only then will those investors be ruthless enough to cut losses and hand over the shares. At that time, as the “bull market flag bearer,” many brokerage stocks have already fallen below the new lows set on April 7. So in my view, only if it breaks below 3730 will these retail investors cut losses.

By the same logic, the support around 3730 will be fragile—like paper—being punctured in this Middle East war, and then continue downward. After continuously releasing panic-related huge-volume selling, the index will start to trade sideways and consolidate, continuing to wash out retail investors who doubt everything. Only then will the national team step back in to pick up shares again. Right now the national team is still reducing holdings in the CSI 300. The bottom-fishing on April 7 already made them a lot of money. When it reaches the level where retail investors cut losses this time, the national team will most likely still bottom-fish. They’ll call it “maintaining market stability,” haha.

Overall, I think when looking at the index for this year, over the next few months it still needs to move in a downward trend. At the same time, if the index breaks below 3500, the chips (“positions”) will become extremely cost-effective. Right now above 3800, there is about 10 points of space until 3500. Looking at it, that seems like a lot, but once it truly falls, it can be very fast. If, for example, the war conflict escalates, the next day the index dropping 4%+ is completely normal; then the next day it continues to close down another 2%. After a week of trading sideways and down, it can drop to 3500. However, even if it drops to 3500, I believe the bull market still exists—because I believe this is also the kind of movement the index should go through: oscillating upward. In the worst case, if oil stabilizes above 150+, then for the index, I think returning to the 3300–3500 range to trade sideways would be a relatively good position. The oscillation range for May–June 2025 is basically right there.

So when will the index be able to make a new high again? When the Middle East war truly ends and when the real peace talks truly happen. At that time, you’ll have external conditions supporting an upside oscillation trend. Otherwise, with the war’s impact sitting right there, and with the possibility of conflicts escalating sitting right there, it’s impossible for A-shares to drag everything up globally against the trend. It doesn’t have that kind of gene. The national team is already疯狂 (crazy) reducing holdings at high levels, and the gene to rise against the trend simply doesn’t exist. Therefore, everyone: now the index is at 3880. No matter what “Huang Mao” says in the short term—no matter when he says there will be peace talks—no matter how much he says things have eased today, it’s useless.

But in the short term, the U.S. stock market and A-shares’ movements have been affected a lot by what he says. So our advice is: what we can do is to reduce positions when prices are high. Don’t go chasing profits from that 3900-point high. Because overall at this position, I still believe the risks greatly exceed the opportunities.

The truly “add aggressively” position we mentioned earlier is when the index expands volume, rallies strongly, and holds above 4200, or when it falls to a very safe level—when the opportunity is greater than the risk—then we should step in and sweep up those bleeding shares. But now the market is shrinking volume every day, retail investors are lying flat, and quant strategies keep chopping up the range to harvest people. Where are the bleeding shares? There aren’t any. So this is also why I’ve said before: if you can’t handle a market that jumps around and “Huang Mao’s” talk, then just stay in cash and wait. Staying in cash won’t get you shot—don’t be afraid!

Also, let’s talk about Qianjiang Motorcycle. This stock was entered at the end of November. Throughout the middle, it kept maintaining a sideways trend. During pullbacks that followed the index, on March 20 it broke below the support of 15. The cost when we built the position was actually just a little over 15. After March 20 broke the 15 support, at the end of the day I was too lazy to reduce positions. The next day it fell again, and I also didn’t reduce. Because the support level in my heart is 13.5. My typical stop-loss point for a stock is at most around 10%. After I buy, at most I hard-hold through a 10% drawdown. I will definitely cut and leave immediately if that happens, because it means my previous view was wrong—maybe I bought at a relatively high position. That’s why my stop-loss points are usually around 10%.

So why did I hold Qianjiang Motorcycle even if it went to 13.5? More importantly, the extreme support of the oscillation range from April to July 2025 is at 13.5. So my internal “extreme support” is also 13.5. And on March 31 it rallied into a board—since it hadn’t reached my take-profit level, I didn’t sell. Also, that day clearly someone was strongly buying. I predicted that at least the next day would give a high opening—but it didn’t. Instead, the next day it quickly moved downward right at the open, so I was too lazy to reduce positions. Rather, it continued falling about 5% below water, and I continued adding positions. After holding it for so long, plus it was a bottom with a huge-volume rally, and there was also the catalyst from Zhang Xue Ji Motorcycle winning the championship—though that catalyst didn’t wait for me to arrive in time—technically, actually on April 1 at the end of the day, I should have reduced positions.

I could add positions during the intraday acceleration selloff after the open, and bet on an intraday rebound. But in the last 10 minutes at the close, I didn’t wait for it. And on top of that, on April 1 you could already see it during the day—huge volume was released. Moreover, the volume was even higher than the volume on March 31. So technically, positions should have been reduced. If the volume on April 1 had been shrinking, then you could have not reduced, because shrinking volume indicates retail investors are being stingy with selling—no one is selling. Especially after yesterday’s rally into a limit-up board, today at the open it immediately quickly dipped about 5% below water. Retail investors probably couldn’t get out before the selling on the open. So in the retrospective review: after the rapid selloff at the open on April 1, there was no rebound intraday; instead it kept around 5% below water. Theoretically, at the end of the day it should have reduced positions—at least to cut the intraday low-absorption positions—so that the bottom position wouldn’t change and the risk would be controllable.

At the same time, on the 2nd and 3rd, the volume reduced again. On those two days, I also continued to low-buy/add positions during the day when it was below 4%. If you ignore the impact of the Middle East war and oil, then I think my adding positions on the 2nd and 3rd likely had no major issues. But when adding positions intraday, and then looking back at night, I felt like “left and right brains fighting” within me. In the evening, after I calmed down, I believed: the Middle East war still needs to continue, oil still needs to rise, and when the index rebounds to 3950, it will need to pull back again. But on the 2nd and 3rd, intraday I still couldn’t help myself from adding positions to Qianjiang Motorcycle via low-absorption. Maybe that’s just human nature. Many times in this market, when you’re calm, you’ll know which actions are right and which are wrong. But at the open, when all kinds of external news are buzzing in your ears—oil price trends, index trends, sector trends, and market-internal plus/minus news—you sometimes really can’t restrain your emotions like a robot. When a stock surges hard, you find it hard not to look at it. When it pulls back from a high level, you find it hard not to sell. Even though your brain thinks it might still go up, your hands just can’t stop—you can know a lot of stocks will keep falling, but you still, intraday, control yourself and want to add on the left side short-term. Hahaha.

The interesting thing about stock trading is exactly here: it’s a chess game where you face off against the other side’s positioning; and it’s also a chess game where you face off against your own greed and fear in human nature. The opponent is also very hard to defeat. So making money in this market really is difficult. I’m the same.

Sharing so much is also to tell everyone one point: if on April 1 the volume is shrinking—meaning that after the massive volume on the 31st, the next day is a smaller volume and a low open—then you can add positions and you don’t need to reduce at the end of the day. But if it’s a volume expansion, then in theory, during the first hour after the open, you don’t know the volume condition. It’s normal to add positions with a low open. However, if by the end of the day there is no rebound during the day, then you should at least reduce the added position size—that’s the correct choice. As for whether to add on the 2nd and 3rd, it still depends on how many bullets you have. After all, those two days were shrinking volume days.

Also, a reminder: once Qianjiang Motorcycle breaks below 15, it’s then 13.5 to watch. If 13.5 breaks, I will directly clear it. Everyone, decide for yourselves.

Now let’s talk about Qianjiang Motorcycle again. Recently, the annual report performance has come out. Actually, the performance isn’t good. The net profit increase is because they sold land assets for gains. But the non-recurring profit is very poor, and sales are also declining. However, the highlight is that the overseas market’s export sales data is not bad—especially this year as oil prices are rising rapidly. This is a big positive for the new energy vehicle and motorcycle sector.

Motorcycles, about 20 years ago, were a very common mode of transportation in China. For example, a 250cc motorcycle: per 100 kilometers it uses about 3 liters of gasoline. At today’s price of 92 gasoline at 8.5 per unit, that’s around 26 yuan. Now that oil prices are rising, combined with Zhang Xue Ji Motorcycle winning the championship, that stimulates domestic motorcycle sales for China’s domestic market. But oil prices rising also further stimulates overseas export sales, because overseas places are even more short of oil. So demand for motorcycles will increase along with the rise in oil. In the 250cc displacement range, Qianjiang’s market share is still pretty good, and export data is also good. These are the kinds of story points capital markets can talk about—at least in the short term, these are positive factors.

The bearish factor is that the 2025 data is truly worse. But since the performance has already been released, I believe the market has already digested it. Another bearish factor is that I believe the index needs to pull back. Whether it can go against the trend upward when the index is adjusting—I think the probability is small. Because when the index fell to 3800 that day, it also fell with it. There wasn’t a sign of a trend that it could rise against the trend. So everyone can refer to my viewpoints above and make your own decisions. I won’t blindly hype any stock regardless of the situation, or regardless of where the stock is. I will do an objective analysis based on the current market and the stock itself. Every time I build a position, I have my own reasons. Every time I sell, I also have my own reasons. Sharing this is for everyone’s reference.

That’s it—keep going.