Over the past week, Chinese assets have experienced the largest surge since 2008, with the Hang Seng Index leading the charge, breaking through the 20,000-point mark. On Friday, the trading volume of Hong Kong stocks also exceeded 400 billion Hong Kong dollars, setting a historical record. The series of stimulus measures introduced by the central bank last week have greatly boosted market confidence. For a while, measures such as the reduction of existing mortgage interest rates, the lowering of benchmark interest rates, and the central bank's provision of innovative tools to support the stock market, which were previously "unthinkable," were all introduced last week. The market also loudly proclaimed a significant "turn" in China's economic policy. On Sunday night, a series of measures to relax real estate regulations were introduced, filling the market with anticipation for the real estate market during the Golden Week holiday. Since Hong Kong stocks only have a one-day break during the Golden Week holiday, the Hang Seng Index and the offshore renminbi will become important indicators to observe market sentiment during the Golden Week.

It must be said that this is not the first time that Hong Kong stocks have rebounded or even reversed before the end of the year. In the past few years, Hong Kong stocks have often performed well in the fourth quarter. However, unlike the previous two years, the Hang Seng Index is currently in an upward trend, so the probability of a reversal is also increasing. Of course, whether the market reverses still requires the cooperation of various conditions. We can only say that from a technical point of view, the shape of the Hang Seng Index is currently at its best in recent years.

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The importance of technical analysis is very important in the financial market. Generally speaking, we can consider that investors have enough information and therefore have corresponding expectations for the market. From this perspective, the shape that the market ultimately forms largely indicates the result of market competition. If there is a positive external force at this time, the market may accelerate the previous trend. For Hong Kong stocks, this effect was very obvious last week. Before the dense introduction of policies on Tuesday last week, the Hang Seng Index had already formed a very obvious bottom and gradually raised its trend. With the support of policies, the Hang Seng Index rose rapidly, breaking through several key psychological points, and there was an increase in volume, indicating that the possibility of the Hang Seng Index forming a historical-level market is gradually increasing.

Of course, there are still many issues that the market cares about. The key factor is still the implementation of policies and the actual feedback of the economy. To answer these questions, investors need patience, especially to observe the actual trend of China's economy and real estate market in the fourth quarter. But the more concerning issue may be, if the market continues to be excited, can economic improvement meet the growing appetite of investors?

So, we are back to a new prisoner's dilemma, which also leads to investors never being able to be harmonious with the market. At this time, research and attention to the fundamentals will become key, but without long-term tracking and analysis, the view of the fundamentals is likely to be biased when there is a huge change in sentiment. At this time, technical analysis may still be the best solution, because it may be easier for investors to find a more practical pricing anchor.

Another event that attracted attention last week was that Shihoko Ishinomori is about to become the next Prime Minister of Japan. Due to Japan's important role in the Asia-Pacific geopolitical pattern, the new Prime Minister's appointment has also aroused the market's concern about the future geopolitical pattern of the Asia-Pacific. From an economic perspective, because Shihoko Ishinomori supports the Bank of Japan's efforts to tighten monetary policy, the exchange rate of the US dollar against the Japanese yen fell from 146.5 to 142.15 last Friday, with the Japanese yen appreciating by nearly 3%. Investors are also worried that if it breaks the previous low of 139.57, it may trigger a new round of arbitrage trading to be closed. But investors may need to be more concerned about whether the renewed focus on the renminbi will have a substitution effect on the market star of the past period - the Japanese market.

Of course, investors are also worried about the tax policies that Shihoko Ishinomori may adopt after taking office, which further increases the possibility of capital short-term outflow from the Japanese stock market. During the election process, Shihoko Ishinomori expressed a positive intention to implement the necessity of "taxing financial income" such as stock sale profits. He said, "I do want to implement this measure because Mr. Fumio Kishida, the Prime Minister of Japan, initially said so. I don't know where the resistance comes from, but I always feel that this matter is regressing."

Shihoko Ishinomori pointed out that some people say that if the policy of taxing financial income is implemented, wealth will flow overseas, and the rich will leave Japan, which may be why this policy is suppressed. However, whether Japan will really face the problem of capital outflow needs further discussion.