According to the Wisdom Investments app, Cinda Securities released a research report stating that the bull market in A-shares is still ongoing, but it will slow down through fluctuations because the current intensity of residents' capital inflows is not sufficient to allow the index to break through quickly. After the turnover rate declined in the early stages of the bull market, the duration of fluctuations is often longer than in the middle to later stages of the bull market. Key focus areas include the effects of policies and industry profitability. Recommended allocation sequence: finance and real estate (most benefit from policies) > media, internet, and consumer electronics (value stocks among growth stocks) > upstream cycles (good production capacity structure + concerns about demand release have been sufficient) > going global (good long-term logic, short-term policy vacuum period post U.S. election) > consumption (oversold).

There has been some adjustment in the recent market, causing some investors to worry about whether the bull market is still ongoing. Cinda Securities believes that the most significant force behind this bear-bull turnaround comes from the reduction of stock market equity financing through policy-driven changes, resulting in a shift in the supply and demand structure of the stock market. Starting from the second half of 2023, the scale of equity financing is lower than dividends of listed companies. Historically in 1995, 2005, and 2013, such instances have occurred, where regardless of economic improvements, a significant bull market emerged later on. The second force of the bull market lies in economic policy shifts. Cinda Securities considers the direction more important than short-term results. After the U.S. subprime mortgage crisis, house prices fell continuously for six years, but the bear market of the stock market was short, mainly due to the onset of quantitative easing by the Federal Reserve starting from the end of 2008. In the short term, the first force poses no issue, the second variable has some differences, but the directional problem remains minimal. The market's fluctuation and consolidation essentially represent a cooling-off period for many speculative short-term funds. During the previous recurring bull markets, after the rapid rise in short-term turnover rates, the stock market often experienced quarterly-level fluctuations and consolidations, with initial bull market consolidations lasting longer. However, due to the shift in long-term funds and policy directions, it is challenging for the index's center to fall back to its original point.

(1) The most important force of the bull market: the reduction of stock market equity financing driven by stock market policies, leading to a shift in the stock market's supply and demand structure. With recent market adjustments, some investors are concerned about whether the bull market is still in place. Cinda Securities believes that behind this bear-bull turnaround are two main forces, with the most crucial force coming from the reduction of stock market equity financing driven by stock market policies, resulting in a shift in the stock market's supply and demand structure. In A-share investor structures, the most critical aspects are actually the forces of listed companies and major shareholders. Historically, most of the time, A-shares have been financing-oriented (financing scale greater than dividends), but there have also been times when stock market equity financing scales were lower than dividends of listed companies. These instances occurred in 1995, 2005, and 2013, and after each of these periods, regardless of economic improvements, the stock market experienced significant bull markets. Since the second half of 2023, with the reduction of stock market equity financing driven by stock market policies, there has been a change in the stock market's supply and demand structure. Cinda Securities considers this as the most important force of the bull market. Furthermore, it is foreseeable that the stock market equity financing scale may not quickly rebound in the short term.

(2) The second force of the bull market: Economic policies to offset real estate risks. Secondary market investors are more concerned about economic policies, especially real estate and fiscal policies. Regarding this, Cinda Securities believes that the direction is more important than short-term results. After the U.S. subprime mortgage crisis, house prices fell continuously for six years, but the bear market of the stock market was short, mainly due to the launch of quantitative easing by the Federal Reserve starting at the end of 2008. Following the first quantitative easing (QE1), the economy still remained weak, with subsequent QE2, QE3, until quantitative easing stopped in 2014, but the stock market's reversal began after QE1.

Domestically in 2014-2015, the loosening of mmf and the real estate shantytown renovation policy were similar, confirming the stabilization and recovery of the economy after 2016. However, the bull market in stocks had already started in the second half of 2014 when the policy fully shifted. Therefore, looking at the current situation, the policy turning point in September also marks the end of the bear market, with only the short-term effects and intensity affecting the pace.

(3) The trading volume is determined by short-term funds, and high trading volume is mostly a sign of temporary high points. The recent adjustment, according to SDIC Securities, is on the surface a disagreement among investors regarding policy expectations and effects, but fundamentally, it may be a cooling down after the excessive enthusiasm of speculative short-term funds. In the previous bull market cycles, after the rapid rise in turnover rate in the later stages of the bull market, the stock market often experienced quarterly-level fluctuations and consolidations. Looking at the turnover rate, although the index is much higher in the later stages of the bull market compared to the early stages, the overall turnover rate of the stock market does not continue to rise. For example, in the bull market of 2006-2007, the high points of turnover rates in May 2006, January 2007, and May 2007 did not differ much, but the index points kept increasing. Similarly, in the bull market of 2019-2021, the high points of turnover rates in March 2019, February 2020, and 2020 were not significantly different. SDIC Securities believes that the key reason behind this is that short-term speculative funds have a greater impact on trading volume, while long-term incremental funds have a greater impact on the central axis of the index. When short-term and long-term funds join forces, the stock market trading volume will quickly rise, and then, as short-term funds reduce positions, the trading volume decreases. However, due to the support of long-term funds, the index will not completely fall back. With this pattern repeating multiple times without a sustained increase in turnover rate, the index highs are likely to continue to rise.

After the initial stage of the bull market, the period of consolidation is often longer than that in the later stages of the bull market, with a focus on policy effects and industry profits. Generally, regardless of whether a bull market has profit support, the early stages of a bull market mostly lack profit support, and the overall market and most industries' uptrend mainly relies on valuation increases. When observing the speed of market rise and the recovery speed of trading volume, the uptrend periods in the early and later stages of the bull market do not differ much - both experience rapid volume surges. The main difference lies in the fact that after the decrease in trading volume, the early stage of the bull market tends to have a longer consolidation period, while in the later stages of the bull market, both the time and amplitude of market consolidation after the decline in trading volume tend to be smaller.

(4) Short-term A-share strategy viewpoint: The bull market is still underway, but it will slow down due to the insufficient intensity of resident capital inflow to allow the index to break through quickly. With the change in the supply-demand structure of the stock market, especially the resurgence of resident enthusiasm, the stock market has most likely entered a bull market. However, the speed of this bull market may be difficult to sustain as fast as before because the speed of resident capital inflow is not as fast as it was in 2014-2015: (1) The recent month's margin balance has indeed been much stronger than the index, but when looking at September and October collectively, the magnitude of the margin balance recovery is not much different from the index increase. This is much slower than the inflow of leveraged resident funds during 2014-2015. (2) The number of individual investors opening accounts surged in September and October, with the monthly number of new accounts almost approaching the peak of 2015. However, by the latter half of October, the search index for Baidu stock account openings noticeably decreased. (3) Unlike the bull market of 2014-2015, this time there has been a significant increase in resident funds subscribing to ETFs, with the ETF scale now comparable to that of active products. However, in terms of growth rate, although ETFs have grown rapidly, the growth is not as rapid as the growth of public equity products in 2020.

Recommended configuration sequence: Finance and real estate (most benefiting from policies) > Media, internet, and consumer electronics (value stocks among growth stocks) > Upstream cycle (good production capacity structure + concerns about demand have been fully released) > Overseas markets (good long-term logic, short-term policy vacuum after the U.S. election) > Consumer (oversold). There is a significant differentiation in market styles in October, with very active speculative funds, but institutional-related heavy positions show relatively weak performance. Looking at low-price stocks and indexes with expected losses, there is considerable excess return from late October to early November. Referring to the relationship between the performance of low-price stocks and indexes with expected losses and the market during the bull market periods in 2019-2021, it can be observed that in February-April 2019, July-September 2020, and July-September 2021, the performance of low-priced loss-making stocks was stronger than the indexes. These three periods were all in the late stage or early consolidation phase of a quarter-long uptrend in the index. Therefore, SDIC Securities believes that in a bull market, the strong performance of low-priced loss-making stocks is a sign of a quarter-long uptrend approaching its end or already in the consolidation phase, indicating that the market style may soon shift from speculative to institutional.