On Friday, September 6th, over 4,700 stocks across the entire A-share market experienced declines, with market sentiment being quite low. Continuing with the previous judgment, it is believed that not only is there no need for pessimism, but there should be a sense of excitement, as we are very close to a significant reversal.

Due to the significant differences among various indices, the Shanghai market is relatively weak, and the probability that the Shenzhen market has already bottomed out is actually quite high. Therefore, the previous viewpoint was that "the Shenzhen market is no longer willing to fall, and the Shanghai market is creating a golden pit."

At the close on September 6th, the Shanghai Composite Index, the STAR 50 Index, and the CSI 300 Index all set new low levels for the phase, while the Shenzhen Component Index and the ChiNext Index were still able to hold their positions.

At this juncture, a bold prediction is made that there is an 80% probability of a stunning reversal in the A-share market next week. Of course, this "great reversal" also varies among the indices; the Shanghai market will only be able to reverse after continuing to set new lows, while the Shenzhen market may not necessarily reach a new low for the phase.

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The most undesirable scenario is an "accident," which would be if all the major indices start the week with a "gap-up and high walk," as this would only prolong the time it takes for the bottom to be established, which is not conducive to the occurrence of a reversal.

The most ideal situation would be for next Monday, especially the Shanghai Composite Index, the CSI 300 Index, and the STAR 50 Index, to have a significant gap-down and bottom-fishing action, and to be able to create a single-needle bottom-probings K-line throughout the day, which would be "exquisite." If this happens, the chances of establishing a key bottom next week would be very promising.

In a word, it is very much to be avoided for the market to open high and rebound sharply on Monday. If there are two consecutive days of minor adjustments on Monday and Tuesday, it would also be a key bottom characteristic.

Laozi said: "To take, one must first give." That is the principle. As for other macro reasons, they have been discussed many times in previous articles, and there is no need to continue discussing them.

New observations, in fact, can also add more confidence.From the perspective of political economy, every significant historical bottom and each major bull market in the A-share market has emitted specific signals. Historically, for instance, the shareholding system reform in 2005, the 400 billion yuan stimulus in 2008, and the Shanghai-Hong Kong Stock Connect in 2014, were all followed by bull markets.

Of course, another significant event, albeit indirectly related to the capital market, was the "supply-side reform" in 2016, which had a profound impact. In the A-share market, several industries were most affected, with the coal and cement sectors both producing a batch of super blue-chip stocks.

At the end of 2018, we proposed the "registration system reform." Although a substantial bull market has not yet emerged since then, it must be acknowledged that the "structural bull" in the A-share market has indeed occurred since the implementation of the registration system reform.

Policy guides the market, which is a significant characteristic of the A-share market.

We are fortunate to be experiencing a larger "financial supply-side reform," a reform that has been planned for many years.

If we consider the registration system reform as part of the "financial supply-side reform," it means that this reform has been advancing for six years, and now we have reached another critical point.

Continuously pushing for a downward trend in market interest rates provides a long-term foundation for the migration of long-term savings funds to equity investment, which lays the underlying logic for the long-term bull market in the A-share market.

Another significant and unexpected development is the effort to promote mergers and acquisitions and the consolidation of the securities industry to become larger and stronger. The merger and reorganization case of Guotai Junan and Haitong Securities is worthy of being recorded in the annals of securities history.

In the past, the acquisition of small securities firms by large ones did not cause much market turmoil. Now, it appears that the intensity of the "supply-side reform" in the securities industry is extraordinary. This reflects the ambition to build a strong financial country and also lays the foundation for further opening up China's financial market to the outside world, preparing the way for the internationalization of the renminbi.

It can be said that the "supply-side reform" in the securities industry is closely linked to the capital market, and it is not ruled out that this round of the A-share market's major reversal will be the first shot fired by the securities industry.We observe the trend of the securities industry index, which bottomed out first in July. Even if the market continues to decline, it is unlikely that the low point in July will be broken, making it highly probable to become a historical bottom. Stimulated by news, today it just rebounded to the resistance level, and coupled with the fact that the Shanghai Composite Index has not bottomed out, it is understandable that the securities sector has not shown the anticipated restlessness.