There is a term that you may or may not have noticed, called "resonance."

In the stock market, the place where it most commonly appears is called "index resonance."

The frequency of this term was not high before, because most of the time, the market's indices are in resonance.

That is, when the overall market trend is good, the trends of individual stocks are also quite good, and the rise and fall of the major indices are also relatively synchronized.

But since the concept of a structural bull market was proposed in recent years, the trend of the indices has begun to deform, and the frequency of the word "resonance" has increased.

The so-called index resonance refers to the situation where the four major mainstream indices rise and fall together, with similar amplitude and strength.

These four indices are, respectively, the Shanghai Composite Index, the Shenzhen Component Index, the ChiNext Index, and the Science and Technology Innovation Board Index.

If you carefully observe the market, you will find that since 2019, the trends of the major indices have begun to show differentiation.

However, the differentiation is not very obvious, but the frequency of resonance has clearly decreased.

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Here are a few examples.In 2019, after reaching a high of 3288, the Shanghai Composite Index began to fluctuate sideways, and by June 2020, the index had adjusted to its lowest point of 2646.

However, in 2019, the first round of high points for the ChiNext Index was at 1792, but by February 2020, it had broken through to 2293, with the lowest adjustment in June at 1819.

That is to say, during that period, the ChiNext Index showed a structured market, significantly outperforming the Shanghai Composite Index.

Including in 2021, the high point of 3731 for the Shanghai Composite Index, and the subsequent second high point of 3723, were actually due to the index not resonating.

The high point of 3731 was the high point of blue-chip stocks.

The high point of 3723 was the high point of the ChiNext.

The direction of speculation for the two high points was different, the first was consumption blue-chip stocks such as liquor and medicine, and the second was growth-oriented new blue-chip stocks such as new energy and photovoltaics.

If the index resonates, then the market will be relatively smooth, the market sentiment is consistent, and both the height and certainty will be relatively good, but if the market does not resonate, the situation will be more complex, or relatively bad.

Of course, the decline without resonance is not a real decline.

The index is the same when it hits the bottom.Take the bottom of 2635 as an example; there was a previous low point of 2724.

The low point of 2724 was a result of the index's decline, while small and medium-cap stocks were still "high up" at that time.

The term "high up" here refers to the relative position of those small-cap and micro-cap stocks compared to the 3731 cycle, which had not fallen to a relatively low point.

As a result, a sharp decline in small and medium-cap stocks, coupled with a resonance with the index, found the low point of 2635, which then confirmed the short-term bottom.

In other words, only when several major indices fall simultaneously, and none are spared, can the true bottom be seen.

As long as there is differentiation in the market, the so-called low point cannot be determined as an absolute low point, and the structure will be very complex.

Do you still remember an experiment? Or a common sense?

Soldiers walking on a bridge must disrupt their steps and cannot walk in unison or march in step, because resonance can cause the bridge to collapse.

How does an avalanche come about? It's not just a gust of wind that causes an avalanche, but the frequency of sound is prone to resonate with the accumulated snow, leading to an avalanche. Therefore, teams climbing on snow are basically speaking softly and never shouting.

Only when the capital in the market is directionally consistent and there is no divergence will there be greater energy.The market's emphasis on resonance is correct because resonance is very important. Only the market with resonance has directionality and can be a major trend.

Let's discuss two important points.

1. What to do in a market without resonance.

For example, in 2024, the market was actually very lacking in resonance.

The market began to diverge from March, with the high dividend direction being strong until June.

Many sectors, however, started to decline from March.

By June, the situation changed again, with the Science and Technology Innovation Board starting to strengthen, and the dividends represented by high dividends began to weaken.

In the middle, different sectors were on different cycles and frequencies.

March to May was the market for the Shanghai Composite Index, and June to July became the market for the Science and Technology Innovation Board Index.The rotation and switching between large and small cycles are so rapid that they are overwhelming, with no resonance at all.

Even the adjustment cycles and structures are different, making the operation extremely difficult.

In a market lacking resonance, always sticking to the direction of low positions is the safest.

Some people would say, the strong always remain strong, and the weak always remain weak.

This should be the case in a structural bull market, not in a structural bear market.

A structural bear market is where the weak undergo valuation repair, and as soon as they rise a bit, they have to go elsewhere for rotation.

The so-called weak market, which is driven by structural bull markets, is not actually a sector bull but a hot spot bull.

That is, in a bear market, some hot spots may drive the market.

When the hot spots are no longer there, it is just a process of low-position rotation.

Moreover, the low-position rotation market is not easy to operate because the space is very small, and it is just consuming the time cycle.Therefore, in a bear market, there are no resonant rebounds, which are difficult to participate in; they are just small wave hot spot markets.

In a bull market, without resonant trends, there will be no significant rise.

To put it nicely, it is called a slow bull market, but to put it bluntly, it is a partial bull market.

Only when the four major indexes, including the corresponding sectors, have a continuous flow of funds for speculation, can it be considered a true bull market.

It is hard to say whether this kind of market will still exist in the future.

So, whether the future bull market will still be dominated by a structural bull market requires patient observation, and currently, it can only be said that it is highly likely.

2. What is the signal of resonance?

The signal of resonance is relatively easy to understand. In simple terms, it is a simultaneous rise and fall.

When the market sees the four major indexes rising together, and preferably with a close ratio of increases, it is a standard resonance signal.

If some rise more and some rise less, there is a problem.Additionally, the release of volume needs to be synchronized, meaning that capital needs to be evenly distributed, which is resonance, rather than a single direction.

Hot spots, leading stocks, and structural market conditions do not essentially affect resonance.

When both large-cap and small-cap stocks have market movements, it is called resonance.

When both junk stocks and high-performing stocks are rising, it is called resonance.

The two extremes of market style, doing the same thing, can be defined as resonance.

Once resonance occurs, the trend of the market is easy to establish because the market's capital is unified.

Of course, resonance requires a large amount of capital to drive.

With the current market transaction volume of around 60 billion, let's not even talk about resonance.

The capital is not enough to be evenly distributed, and it's already good to be able to sprinkle some water locally in the drought-stricken field.

A lot of capital is on the sidelines and waiting, which is actually waiting for the moment of resonance to appear, and the market to become active again.Before that, it is suggested that the average retail investor should focus more on waiting.