On the basis of economy, policy plays an important role. If the stock market rises too much, the government will introduce negative policies to curb the stock market rise, and the stock market will generally peak and enter a downward cycle; If the stock market falls too much, the government will introduce favorable policies and the stock market will generally rebound.
The supply of funds or stocks is also an important factor affecting the trend of stock indexes. With the increase of capital supply, the purchasing power of the market has increased, resulting in a situation of short supply, which has caused the stock index to rise; The decrease of capital supply and the decrease of market purchasing power will lead to the decline of stock index.
Similarly, the increase of stock supply will lead to an oversupply situation, which will make stock index stocks fall; The decrease of stock supply will cause the situation that the supply exceeds the demand, which will cause the stock index to rise. The change of fundamentals has become an important basis for the change of stock index trend.
Fundamental judgment has three important characteristics:
One is the lack of fundamental information that stock investors can grasp. Investors always can't grasp the comprehensive fundamental information, just make their own perfect trend judgment based on some fundamental information, and then make operational decisions, which often leads to significant differences between the expected fundamentals and the actual fundamentals, making wrong judgments on the stock index trend and conducting reverse operations.
Second, investors are not clear about the changing laws of fundamentals and stock index trends. Fundamentals and stock index trends are consistent for a long time, but inconsistent in the short and medium term, and sometimes even run counter to each other. When investors intuitively predict the trend of stock index according to the fundamentals, they may draw wrong conclusions and make wrong operations.
Third, the fundamentals are changing. Fundamentals will run in the established direction, or they may run in the opposite direction, or even suddenly run in the opposite direction, which will cause the stock index to run in the opposite direction and turn investors' original correct positions into wrong positions.
A change in fundamentals can lead to a stock index reversal. When judging the trend of stock index, investors often make comprehensive judgments from fundamentals, technical aspects, long and short games and other aspects. However, in quite a few cases, as long as the fundamentals change, it can cause changes in the direction of the stock index, and stop loss is necessary.
In quite a few cases, as long as the fundamentals change, or our understanding of the fundamentals changes, we should stop immediately without waiting for technical confirmation. But in some cases, technology may prove better. But in any case, fundamentals are the basis of the stock index, and any change in fundamentals will cause changes in the trend of the stock index. It is of great significance in practice to find fundamental changes and stop losses in time.