Is confidence still sufficient after today's pullback?

This time, the AH shares affected by deepseek are quite interesting.

1/ In this "deepseek bull market," the behavior of institutions vs. retail investors is actually quite similar; both are feeling anxious. According to feedback from Goldman Sachs, some clients were still complaining about insufficient positions yesterday, and upon seeing a slight pullback today, they became cautious again, even considering some hedging;

2/ Naturally, the anxiety includes FOMO emotions. The impact of this deepseek came quickly and fiercely, and the positions of hedge funds also show a clear pulse. For example, from MS and Goldman Sachs:

Goldman Sachs - The net buying speed of hedge funds in China is the fastest in four months, almost all net buying.

MS - The degree of buying by hedge funds has reached 80% as of September 24.

3/ This time, the buying is much narrower than on September 24. On September 24, the most famous remark was Tepper's "buy everything related to China" (this quarter's 13F shows that Tepper is indeed still buying Alibaba, keeping his word); this time's deepseek rally is concentrated on large tech stocks in Hong Kong, and we haven't seen the previous phenomenon of a basket of Chinese ETFs being bought.

4/ The funds this time were initially led by Asian hedge funds, but now American hedge funds have also started buying. The ratio is 64 to 36.

5/ As for today's decline? There aren't too many fundamental reasons; it seems more like a pullback driven by profit-taking.

6/ The only relatively bearish point might be that the name "God's Eye" is not trendy enough (180K: This is my personal observation....).

7/ Regarding profit-taking, Goldman Sachs described it as follows:

The Chinese market ended its three-day winning streak, closing slightly down today, with turnover decreasing by 5% compared to the previous day. Short-term profit-taking was the main driver of today's pullback, as reflected in the decline of the DeeSeek index in the afternoon market. However, the magnitude of this adjustment was relatively mild, indicating limited selling pressure, and the market still shows a tendency for continued upward movement. I believe this adjustment is a healthier correction that may create space for more incremental capital inflows.

8/ Next are some interesting charts;

The trading volume of the technology sector in the A-share market has started to become very crowded; it already feels like when GPT first came out.

The trend from "hard technology" to "soft technology" is evident.

The Hang Seng Tech Index is the first to return to the 924 high point.

This time, the market's fluctuations and trading volume are not as frightening as at 924.

The kind of surprises from the performance of the US stock market's MAG7 no longer exist; previously, many people at the trading desk were asking whether US stocks must fall for Hong Kong and China stocks to rise? (The momentum of American exceptionalism has also been declining recently)

180k, original title: "Foreign Capital Trading Desk | Today's Pullback, Is Confidence Still Sufficient? (February 11)"

Risk Warning and Disclaimer

The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investing based on this is at one's own risk