CICC Wealth: Three major changes that need to be monitored for short-term market cooling According to a report by Golden Finance, on June 11th, CICC Wealth stated that the continuous market turbulence in recent weeks has indeed been a test. But there is no need to be intimidated by short-term market changes, as this may be a necessary proactive cooling by the market for itself. The first change: The technology track is already overcrowded and requires space to be moved. You may also feel that the discussions around chips, computing power, and storage have shifted from opportunities to consensus. From a data perspective, the valuations of semiconductors, communication equipment, components, consumer electronics, optical optoelectronics, power, and others have all stood at high levels in the past decade, with daily transaction averages exceeding 100 billion yuan. As of June 5th, communication equipment and components have even reached the highest percentile level in nearly a decade, and the transaction volume of the semiconductor and communication equipment industries has accounted for more than 40% of the entire market. When everyone is crowded on the same track, any slight movement will be amplified into panic. Second change: Index reconstruction, where fluctuations are naturally amplified. The index is that index, but the index may no longer be the same index as it was in the past. After the rapid rise of industries such as communication, semiconductor, and battery, as well as leading individual stocks, the market value has rapidly increased. The index components have been readjusted according to their respective rules, and the above-mentioned leading individual stocks have been included in the weights. The technological content of each index has been significantly increased. Technology stocks seem to have become the heart of the index. Every fluctuation of it is likely to trigger exponential resonance and expand the volatility. The third change: Hot money on leverage comes and goes quickly. As of June 5th, the total balance of dual financing in the market was 2.89 trillion yuan, surpassing the high point of 2015. The financing balance of the top four industries (semiconductor, communication equipment, securities, and batteries) is close to 700 billion yuan, accounting for over 20%. After continuous market fermentation, the market capital structure and trading heat have reached a high range, further amplifying the short-term market volatility elasticity.