Hexun Investment Advisor Wang Shijie: The broader market forms an M-head pattern, two phenomena emerge

On March 21, Wang Shijie from Hexun Investment Advisory stated that yesterday the Shanghai Composite Index formed an M-top pattern and broke below the neckline, indicating a temporarily bearish market. During this period, two strange phenomena occurred. The first is that in the commodity price index, the oil sector continued to rise without any signs of correction, but in the A-share market, oil and gas exploration, oil service engineering, and oilfield sectors showed divergence at the top. Despite soaring oil prices in the commodity market, related sectors such as petrochemicals, refining, and oil trading in the A-share market performed divergently without deteriorating fundamentals. Whether this strange phenomenon is caused by human factors or other reasons remains to be seen. The second phenomenon is the gold sector, which moved downward along with the main tracking line, showing a trend of following the market without counter-trend performance. Currently, these two phenomena in the market are quite interesting. On one hand, the fundamentals are intact, but the A-share oil sector underperformed; on the other hand, the precious metals sector and precious metal commodity prices moved in tandem, following the trend. Why is this happening?