Today’s price action was interrupted by the patience of waiting capital, stifling any potential recovery. It was only when prices dropped significantly that larger waiting orders emerged. Liquidity remains very low after last weekend’s session, which could be seen as a positive sign, as those who wanted to cut losses the most have already done so.
The surprisingly positive macro data released over the weekend created some initial excitement, but the capital flow “disagreed.” Poor buying power quickly weakened the upward momentum. The market is currently in the hands of sellers rather than buyers. Price negotiations will continue to create many volatile sessions like today, with low liquidity until those holding capital become more aggressive.
Looking at intraday fluctuations, the market is creating a sense of frustration, as any upward movement is met with selling pressure. Only those holding stocks are frustrated, as those with capital are in a comfortable position. The market is still in the “margin-testing” phase and has not yet reached the psychological testing phase. It will only transition to the bottom-building phase when stockholders become completely indifferent to prices.
Today’s session had two positive aspects. First was liquidity. In a downward trend, after distribution sessions and sharp declines with high liquidity, a slowdown in trading is a positive sign, indicating either a reduction in selling pressure or a decrease in loose stock volume. Today’s matched trading volume on the two exchanges was only 11.5 trillion, similar to mid-September sessions. The second positive aspect was the emergence of significant deep-catch orders at the end of today’s afternoon session. Whenever prices dropped significantly, trading became more active. Some stocks, particularly securities stocks, witnessed impressive reversals, suggesting a shift in the mindset of capital holders.
Trading on the exchange always involves probing the thoughts of each side, and liquidity, range, and price fluctuations are part of that outcome. Guesses can be right or wrong, but over many sessions, consistent signals increase the likelihood of accuracy. Therefore, market bottoming or topping processes always involve failed fluctuations and rarely end in just 1-2 sessions.
Some stocks have corrected to the point where they can be bought. As the market is still unstable, the buying strategy should also be gradual. Stockholders are at a disadvantage, so patience will pay off. Buying on dips is easy, as it only involves covering previously sold stocks, so everyone has a chance without competition.
Today’s derivatives market continued to reflect expectations for the underlying market, as the F1 basis remained positive throughout the day. However, this situation, coupled with low liquidity, could easily become a “delicacy” for shorts. Nevertheless, to increase volatility, it is necessary to push the underlying. In the morning, VN30’s decline below 1341.xx favored shorts, but it was not very effective as the underlying remained range-bound, and failing to cut losses quickly even resulted in losses. The afternoon session was better, as the second time VN30 dropped below 1341.xx, there was a synergistic push from the underlying, and although the basis did not contract, it limited short profits, but the index’s range improved significantly. VN30 has two range-opening regions: 1341.xx to 1334.xx and 1327.xx. However, it is always advisable to maintain discipline and close half the position at the 1334.xx threshold to secure profits, with the remaining half aiming for additional gains or breakeven.
With today’s significant drop in liquidity, the volume of loose stocks appears to be decreasing. The market is likely to experience a few narrow-range sessions with continued low liquidity or sessions with range-opening pushes to test supply. The strategy remains to focus on stock purchases and flexible long/short positions in derivatives.
VN30 closed today at 1335.48. Tomorrow’s nearest resistances are 1341, 1348, 1356, and 1365. Supports are 1333, 1325, 1318, and 1308.
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