[Red Envelope] Immediate alert for market risks! Geopolitical conflicts trigger oil and gas, follow the latest updates here!

The wind is strong, blowing away the gentle mask of the index, revealing only a scene of devastation. [Taogu Ba]

2026-03-03 Market Review

1. Market Overview

Due to the ongoing escalation of the ZD situation and the resulting uncertainty expectations, the market experienced a sharp decline after opening today, with a significant increase in trading volume during the drop. The early session saw a mass sell-off, with over 4,500 stocks declining across the two markets. The banking sector began to stabilize the market after opening but failed to hold the situation. After 10 a.m., insurance stocks joined in with continuous volume-driven rises, helping to stabilize the index. The Shanghai Composite Index hit a new high in the morning but then briefly retreated over one point, only to be driven back into positive territory later, resulting in large intraday fluctuations. However, individual stocks did not share the index’s luck; although they showed slight stabilization and rebounds after the index steadied, the strength was weak and passive, with no fundamental shift in market defensive attitude. Overall, the market remains quite pessimistic. The sectors performing relatively better today are those aligned with ZD logic—oil, natural gas, shipping, and agricultural sectors with safe-haven attributes. Other sectors generally underperformed.

In the afternoon, the market continued to decline. Seeing that banks and insurance could not stabilize the market, a wave of white wine stocks attempted to support the market but ultimately couldn’t resist the mass sell-off trend. The market kept falling, with the number of declining stocks quickly surpassing 4,500, and the number of limit-down stocks increasing.

Throughout the day, the total trading volume across both markets reached 3,129.5 billion yuan, up 134.2 billion from the previous trading day, an increase of 4.33%. There were 629 stocks rising, with 4,810 stocks poised to rebound. Overall, the market showed a volume-driven downward trend, with a significant loss effect.

2. Major Indices

Based on our analysis from yesterday’s review, under the expectation of stability during the Two Sessions, the index’s upside and downside potential should be limited. However, due to the sharp increase in trading volume, intraday volatility could be significant. Today’s early market performance aligns with this expectation. But there was a deviation regarding volume contraction; the initial sharp decline in the morning exceeded expectations, especially with the volume increasing during the sell-off, which was unforeseen. We promptly adjusted our outlook early in the day, issuing risk warnings.

Given this volume-driven decline and the selling pressure today—mainly from yesterday’s bottom-fishing crowd—this essentially reflects a “mass sell-off” behavior. Once such behavior occurs, quick recovery is usually difficult. The large rebound in the morning was mainly driven by banks and insurance stocks, but the actual rebound strength was far weaker than the index, indicating limited spontaneous market recovery and a generally negative attitude. Unless there is a significant change in news, this attitude tends to persist with some inertia. From the market’s real performance perspective, it’s more prudent to wait for clearer stabilization signals before taking action. We won’t speculate on specific support levels now but will wait for clear signs of stabilization before making moves. During the Two Sessions, the probability of continued aggressive sell-offs is low; if conditions become too extreme, some investors might step in.

3. Market Sentiment

Despite the overall poor performance in recent days, short-term speculative sentiment remains quite strong. Yunnan Energy Holdings hit a seven-day limit-up, then experienced a healthy correction, and today rebounded to the limit-up again, significantly boosting market speculation enthusiasm. Visible in recent days, the tolerance for top-tier stocks’ battles is very high, and the success rate of lower-tier stocks advancing is also quite good. Many stocks that broke their limits and then recovered or rebounded are abundant. There has been no sign of sustained losses after tier breaks. Overall, short-term sentiment remains relatively positive, especially in a market environment of widespread correction, which is quite rare. Currently, the main driver of this sentiment is the ZD-related logic, which is highly sensitive to news, leading to extreme reactions—either upward or downward—similar to previous gold and silver waves. After such intense speculation, risk awareness should gradually increase. As long as no major negative news emerges tomorrow, sentiment should remain stable with some divergence. A key anchor is Yunnan Energy Holdings; although it retreated slightly in the afternoon, as long as it remains sideways and doesn’t fall sharply, short-term speculative enthusiasm will not suddenly fade.

4. Sector Analysis

1. Oil/Natural Gas/Shipping

We analyzed the logic of oil yesterday; it is a core theme in this ZD upheaval. The sector has been the strongest in recent days. Future fluctuations will be heavily influenced by news, with daily volatility likely to be high regardless of gains or losses. Expectations will initially respond to news about the ZD situation, then to futures, and finally to A-shares. Therefore, there is ample time for preemptive analysis.

When should we be cautious? Two scenarios: one, if news expectations suddenly turn from positive to negative—often resulting in a sharp open lower, making it hard to exit later; two, if positive expectations are invalidated or disappear altogether, then it’s time to exit. Another scenario is if oil news remains positive but oil prices stop rising significantly; this is a warning sign, and reducing participation is advisable, as volatility can become large.

For funds not yet involved, whether to enter depends on risk appetite. If you believe, act early; if you want to gamble, do so early. The later you wait, the lower the odds, but it’s not impossible to gamble. We only provide key analysis points and will alert promptly if clear signals appear during trading.

Natural gas and shipping are related to oil, with similar rhythms and slightly weaker strength. Many targets overlap with oil, so follow the same expectations.

2. Non-ferrous metals, chemicals, and other resource stocks

Why group non-ferrous metals, chemicals, and other resource stocks together? Because their underlying logic also revolves around the ZD upheaval expectations. Their rhythm has been consistent with oil until today, but now clear differentiation has emerged within this large logic. Only the top-tier stocks with strong logic remain resilient. Funds are gradually focusing, from multiple sub-sectors to top-tier logic, and within top-tier stocks, some differentiation is beginning. The key uncertainty is whether these secondary sectors will adjust or rotate—risk mainly stems from uncertainty, making short-term predictions difficult. Market anchors like Tin Industry, Xianglu Tungsten, and Zhangyuan Tungsten are worth monitoring; if these stocks show mild declines, the sector risk remains manageable. Large declines would warrant caution.

3. AI Hardware (Optical Modules, Storage Chips, etc.)

The tech sector showed signs of imbalance yesterday afternoon, with a clear high-low split indicating reduced momentum. Large-cap stocks were strong, small-cap stocks weak, reflecting a false prosperity in the sector index. This explains why, despite a surge in U.S. stocks’ optical modules last night, the overall tech sector today remained weak. The rhythm is tricky: U.S. stocks just rallied sharply and may face a correction; rushing to buy the dip could be risky if U.S. stocks pull back. If U.S. stocks continue rising, they may not support A-shares well. The ideal approach is to wait for a significant correction in U.S. tech stocks, and if A-shares do not follow, it indicates resilience. This would be a good timing for a rebound. Currently, patience is advised—wait for the sector to stabilize and show active rebound signals.

4. Commercial Aerospace

The trend in commercial aerospace has been following our script closely, as we noted yesterday. Originally, military industry informatization was riding the ZD logic, and yesterday, commercial aerospace also benefited from military sector support. But this double support increased uncertainty. Today, military stocks dragged the sector down significantly, with market conditions deteriorating further. Military stocks were among the most actively sold today, and the sector may continue to decline tomorrow. After the inertia of military stocks subsides and stabilization occurs, commercial aerospace can find a more comfortable rhythm—though this is limited to a left-side strategy. A right-side entry requires a large-volume breakout, which is unlikely soon, probably waiting until the oil sector completes its move.

5. Computing Power Leasing

Yesterday, Huasheng Tiancheng’s surge failed to support the sector, indicating fatigue. We suggested waiting for further correction before seeking left-side opportunities. Today, affected by the overall market environment, the sector experienced significant declines, especially leading stocks like Huasheng Tiancheng, with active selling. Future recovery depends on both Huasheng Tiancheng and the sector index stabilizing together. The unexpected sharp decline today increases uncertainty about the next leader, which affects the odds of successful left-side positioning. The increased randomness of individual stocks reduces the probability of successful early bets. A process to re-identify the sector leader is necessary before establishing a good left-side rhythm.

Welcome all exchanges, discussions, and questions. Comments will be answered seriously. Feel free to ask anything. If you like my articles, please give a small thumbs-up or support me—your encouragement means a lot. Posting comments or even just a check-in with a “1” is a great motivation, knowing someone is paying attention.

Finally, a special thanks to everyone who supports and rewards—your recognition and encouragement are greatly appreciated. Wishing everyone’s accounts a long-term rise!

@LazyPig0310@Bateful@YaoShuai@XiaKeMao@XinGaoYi@QiShu@YiMengShiQiu@RiTian@FeiFeiLeLe@LongYiLang

The moonlight passes over the corners of the K-line chart, and the glutinous rice ball turns three times in the bowl.

Tonight, I count not the ups and downs, but the footsteps returning home.

The lights turn on one by one, like unfinished blessings.

May your account be as full as the moon, and your life as warm as the lamps.

Lantern Festival is sweet, and hearts are united.