Analysis of the early morning decline on September 26th and operational strategies - I may not be right, just provide one idea Just after finishing dinner and returning home, I saw the information about the decline. I immediately searched for relevant possibilities, but to be honest, no one knows the specific reason for the decline. I can only correspond to the main time of the decline and the events that occurred at that time. The key is not to find the reason for the decline, but to anticipate how to operate after the reason for the decline. This is the most important thing! Firstly, let's take a look at the trend of the Nasdaq futures. The Nasdaq and S&P are very similar to this trend, so using this one is enough. It is clear that although there was a decline in the US stock market at the beginning of the opening, it completed a V-shaped reversal within an hour, which means that the opening decline trend was reversed at 22:30 Beijing time. The main thing that happened in this range is likely to be the intensive speeches of Federal Reserve officials. For example, after the opening of the US stock market, Goolsbee first believed that the employment market was cooling while inflation was rising, and that a sharp interest rate cut would make him uneasy, so he did not support the interest rate cut, followed by Federal Reserve official Schmidt, who was more supportive of the interest rate cut in September, but for the follow-up, he still said to look at the data, which was neutral, followed by Bormann, who continued to cut interest rates and strictly followed Trump's strategy. Then there were bipartisan groups warning that if Trump fired Cook, the governor of the Federal Reserve, it would lead to an economic crisis. These are all things that happened during the V-shaped reversal, which means that before entering a sharp decline, the market can be considered to have digested the game of the Federal Reserve officials. Of course, interest rate adjustments are still the most concerning issue for the market. However, what these officials said today may cause great panic in the market, leading to a significant decline. At this point, let's first look at the yield of 10-year US Treasury bonds. If the market believes that the information released by Federal Reserve officials is not conducive to interest rate cuts, then the yield of 10-year US Treasury bonds should rise. However, in reality, after the opening of the US stock market, the yield of 10-year US Treasury bonds decreases. In other words, the bond market does not expect the Federal Reserve to cut interest rates or delay them. Instead, it still believes that the Federal Reserve will take the path of interest rate cuts. Therefore, my temporary judgment is that this decline is not directly related to the Federal Reserve's interest rates. The next time of sharp decline, this time almost began at 0 o'clock. Trump's speeches at this time have ended, even Trump's remarks are beneficial to the market. The closest thing to this time is the friction between Russia and NATO. During this time, there was also the speech of Federal Reserve Logan, but it did not involve monetary policy. At the same time, we also see that the 10-year US debt is downward, so there is still little relationship with the Federal Reserve. Therefore, my personal feeling, just my personal feeling, is that the possible war conflict between NATO and Russia has caused temporary panic in the market. After all, one Russia, one NATO, both possess nuclear weapons. If we are impatient, Russia may resort to big moves, and the number of times the US stock market has fallen due to war conflicts has been more than once in the past year. I don't know if you still remember the last time Iran blocked the Strait of Hormuz. In mid June, it caused a decline in the US stock market. At that time, it was due to concerns that rising oil prices would drive up inflation in the United States. Later, Iran was unable to block the Strait of Hormuz, and even though the war was not over, the stock market began to rebound. Is this decline really due to war expectations? I don't think it's the most important thing. The most important thing is how we should respond when we see the decline. Why do I always like to look for the reasons for the decline? Because only by knowing the possibility of a decline can corresponding actions be taken. If we assume that it is the cause of the war, then the next trend is nothing more than two possibilities: Either the expectation of war intensifies, the market continues to panic, and the risk market continues to decline. Either the market gradually believes that war has little impact on the US economy, or Russia will not use nuclear weapons, then there is a high probability that it will start to rebound. That's easy to handle. We just need to determine whether the war will escalate. If you think the war is at this point and will not escalate further, then now is the time to buy the bottom. On the contrary, if you think the war has just begun and the situation may become more serious, whether to short or not, at least you can't buy the bottom. This is the process of making corresponding actions based on judgment. Similarly, if you believe that it has nothing to do with war and is due to the speech of officials from the Federal Reserve, what judgment should you make? If you think the market is worried about affecting interest rate cuts, then it may continue to decline, or if you think the impact on interest rate cuts is not significant, then it may rebound. This is the operational logic. When you determine the reason for the decline, you need to make a response plan. Of course, if you don't know what the reason for the decline is, then doing nothing may be the most correct approach. Therefore, my point of view is not to tell my friends what the reason for this decline is, and I cannot do it either. I can only figure out for myself whether it is one or two reasons, and what the possibilities of the reasons are. When I find a convincing reason for the decline, I will try to choose the corresponding operational approach. For example, I think the main reason for this decline is the conflict between Russia and NATO, but I think it is difficult to use nuclear weapons to upgrade the situation. I did not close my long position, but instead added a layer of insurance. If it falls to my explosive position, I will continue to open long positions. Because this is my understanding of the market, I cannot be sure if my understanding is correct, but this is my understanding. If I am right, I will come back and brag. If I am wrong, I will stand at attention and be beaten. I will be more careful next time. Finally, if you really don't know the reason, it's not very important because the core PCE data will be released on Friday night, which will also have an impact on the market. Currently, the previous value is 2.9%, the market expectation is 2.9%, Nick's projection is also 2.9%, and the Cleveland Fed's forecast is 3.0%. Therefore, if the released data is equal to or lower than expectations, it is a good news for the market, and if it is higher than expectations, it is a bad news. The same plan, make your own judgment: What should you do if you think tomorrow's data will be within expectations and positive for the market? If you think tomorrow's data will be higher than expected and bearish on the market, what would you do? Or if you feel that the core PCE data has no impact on the market, what else would you do? These are what we should do when dealing with ups and downs! This article is sponsored by Bitget | @ Bitgetzh