Recently, the A-shares market has staged a short squeeze rally, with the major indices surging on high volume to new historical highs, and bullish sentiment in the market fully unleashed. In the face of such a market development, investors need to stay in sync with the trend and grasp the core trading strategies.

**Behind Trillion-Level Turnover: Dominance of Incremental Funds**

By the close of the morning session, the major index had risen to 4151 points, with over 3,800 stocks across the two markets closing higher, including 142 stocks hitting the daily limit, creating recent highs. The morning’s trading volume already exceeded 2.3 trillion yuan. Based on this pace, the total daily turnover is highly likely to stabilize above 3.5 trillion yuan.

Compared to last year, a turnover of around 3 trillion yuan was often seen as a risk signal, but this year's market performance is quite different. What is the core driving force? Continuous inflow of incremental funds. Before the holiday, the two markets had a combined turnover of about 2 trillion yuan, which quickly surpassed 3 trillion yuan within a week after the holiday—driven by large institutional allocations and retail investors chasing missed opportunities. Market trading sentiment has reached an unprecedented high.

Why isn’t volume expansion a sign of topping out? There are two key points: First, early this year, institutions faced no year-end ranking pressure, boosting their confidence in holding long positions and expanding their capital operation space; second, the current market main themes are diversified. The single-sector “grouping” pattern from last year has been completely broken. Tech sectors like commercial aerospace, AI applications, robotics, and brain-computer interfaces are making successive efforts, while sectors such as retail, cyclical commodities, precious metals, and anti-inflation tracks are also attracting funds simultaneously. This rich array of investment directions is enough to accommodate massive capital inflows, forming a relatively healthy market ecosystem.

**Divergence is an Opportunity, Trends Do Not Top Out**

From the trend-based rally starting at 3815 points, many investors have begun to worry about risks. But have you considered that there is still a large amount of missed funds outside the market? It is precisely because of these funds that every market correction can be strongly supported. What is the underlying logic? Healthy conversion between long and short positions. Profit-taking behavior within the market just creates entry opportunities for outside missed funds.

This morning, after a gap-up opening, the index also filled the gap and then surged again to a new high. This trend is the best proof of the strength of capital absorption. During an upward trend, short-term divergences are quickly resolved—that is the power of the trend. Corrections are not the end of the market but an opportunity for consolidating positions and rebalancing.

How to operate specifically? If your holdings have already gained too much, you can switch within sectors; if the main sector has risen significantly, you can also cross-theme to deploy other hot spots. The core principle is simple: maintain your positions and avoid holding cash.

**Stick to the Trend, 4200 Points Are Within Reach**

In the face of the current short squeeze rally, rather than obsessing over risks, it’s better to stick to the established trend rhythm. Since the second bottom at 3815 points, the bullish strategy has never changed. Breaking through 3936 points and stabilizing for three days confirms a trend reversal; before the New Year’s Day, it was advised to hold positions through the holiday, and after the holiday, the expectation was to break through 4034 points and aim for 4200. Since breaking above 4100 last week, the goal of challenging 4200 this week has become clearer.

Now, only about 50 points away from 4200. Even if there are fluctuations along the way, the profit-making effect of the trend will not easily dissipate once established. The move from 3815 to the current level has fully validated the power of the trend. As long as the core logic remains unchanged, holding positions is the best choice.

**Retail Investor Operation Guide: Strategies Vary by Individual**

In the context of unstoppable bullish sentiment, investors can formulate their own trading plans based on their personal situations.

Trend investors should: continue to adhere to the original rhythm, and avoid exiting easily due to short-term fluctuations before clear turning points in market sentiment and trend appear. Missing the main upward wave would be very regrettable.

What about cautious investors? Stick to trading strategies you understand, and avoid blindly chasing highs. Clear judgment of market logic is the foundation of confidence. If the market exceeds your understanding, you should also switch to a cautious stance in time.

In terms of sector selection, technology remains the core mainline for the year. Among them, commercial aerospace, AI applications, robotics, and brain-computer interfaces are top priorities. It’s worth emphasizing that in 2025, the market’s focus will be on AI hardware, and 2026 will be the explosion year for AI applications and software. This core logic has been continuously validated by the market.

Besides the tech mainline, missed funds will also seek opportunities in other sectors. Cyclical commodities, consumer sectors like retail, brokerage and financial sectors, and anti-inflation tracks are expected to see catch-up gains driven by incremental funds. Ultimately, in the context of continuous capital inflows into A-shares, as long as you hold chips, there is a good chance to profit from the rise.