Why did the stock market plummet after the Dragon Boat Festival?

During the Dragon Boat Festival holiday, the overseas epidemic situation has rebounded to some extent, and some States in the United States may adjust their epidemic prevention strategies, triggering further adjustments in US stocks.

After all, there is a certain linkage in the global stock market, and the callback shock of US stocks has a short-term impact on A shares. Therefore, the repeated shocks in the global market and the repeated epidemics constitute the driving force for the decline, which has caused some negative effects on investor sentiment after the Dragon Boat Festival.

Extended data

Some media have counted the trend of the Shanghai Composite Index around the Dragon Boat Festival since 2008, and found that during this 12 period, the average decline of the Shanghai Composite Index on the second day before the festival was 1.42%, and the rising probability was only 16.67%, less than 20%. After the holiday, the Shanghai Composite Index fell by 2.50% on average, and the rising probability was only 16.67.

The Li Lifeng team of Guo Jin Securities made statistics on the fluctuation range of the Shanghai Composite Index before and after the Dragon Boat Festival of 20 10-20 18, and found that during these nine years, the index decline probability of the Shanghai Composite Index reached 100% in the week after the Dragon Boat Festival, and the cumulative yield decline probability of the Shanghai Composite Index was about 77.8% in the two weeks after the Dragon Boat Festival.

The team therefore pointed out that after the Dragon Boat Festival, the A-share market often has the characteristics of "six unique spells". The reason for this feature is that the Li Lifeng team believes that it is related to two factors: First, it has a certain relationship with the credit volume in May and June over the years (wait-and-see period); Second, it has a certain relationship with the potential scale of lifting the ban on A shares, and the A-share index is under pressure accordingly.

It is worth mentioning that there has always been a saying in the A-share market that the stock market often falls in May and June each year and rises in July. However, since June, the overall increase of the Shanghai Composite Index has reached 4.4 1%, and the "six musts" have not appeared.