Looking at the market again today, I have a feeling—the panic has reached its peak.

**The Answer Lies in Trading Volume**

This week, the A-share market turnover has been fluctuating around 1.5 trillion. Many people think this shows a lack of confidence. But from another perspective, after breaking below 1.6 trillion, trading volume actually stabilized, indicating that the selling pressure has mostly been released and chips are starting to settle. This kind of volume contraction is not a bad thing; in fact, it’s a signal that sentiment has bottomed out.

Thursday marked the emotional low point in the short term. Although the market opened in the red again today, the main indices were clearly reluctant to drop further and instead moved sideways. More importantly, during the session, the yellow line (themed stocks) started to outperform the white line (blue chips)—in the past few days, it was always the white line propping up the index while the yellow line kept falling, but today, this trend reversed noticeably. Individual stock sentiment is warming up, it just hasn’t broken out across the board yet.

**The Bank Sector’s Moves Are Worth Considering**

Banks took a sudden dive today, and this is actually a positive signal. Over the past few days, funds have been crowding into banks for defense, causing themed stocks to drop even harder. Now that banks have loosened, it suggests that the market’s risk-off sentiment is fading and funds are starting to test other sectors.

There’s only so much money in the market. If banks keep being pushed up to stabilize the index, individual stocks won’t have a chance. Once banks let go, themed stocks can finally catch a breath.

**December Has Always Been a Grinding Month**

Big funds that needed to leave in October and November have already exited, and institutional rankings are almost settled, so December is a vacuum period. Cutting losses and exiting now is exactly the wrong timing.

Many strong sectors have been correcting for over two months. Some have been consolidating at high levels for several months, while others are still hitting new lows at the bottom. Overall valuations have come down, and so has the willingness to go long. When everyone feels hopeless, a turning point is often near.

I said to play defense in Q3 when it was time. Now, with the last month of Q4, it’s time to think about how to position for next year.

**Two Clues to Watch**

One is next week’s Fed rate cut expectations. The non-ferrous metals sector surged today, and funds are already front-running. Rate cut expectations are a direct positive for cyclical stocks—this year, gold and silver led, then copper and aluminum rallied. Every time liquidity loosens, cyclical stocks get a boost.

The other is the important year-end meeting, which will likely focus on technological innovation and boosting consumption. Judging by recent policy frequency, these two areas have been mentioned a lot and are worth watching in advance.

**Don’t Use Big Rally Standards to Judge a Choppy Market**

Today, the number of rising and falling stocks was about half and half, much better than the previous days. If you hope for a big rally every day, you’ll be disappointed. But if you expect a choppy recovery, you can stay calm.

When the tide goes out, you see who’s swimming naked. Those calling for others to buy at the top have all gone quiet. For those who entered the market this year, it’s really time to review—figure out who truly cares about retail investors and who was just standing at 4000 points telling you to buy in. You should know by now.