The market is still rising, but be cautious of these two pitfalls.

Yesterday, the Shanghai Composite Index rose again, although the increase was small (0.09%), but this is already the 11th consecutive bullish day. The Shenzhen Component Index and the ChiNext Index, on the other hand, declined, indicating that the profit-taking effect is not evenly distributed—only 2,776 stocks rose, while 2,474 stocks fell.

At the end of the year, both bulls and bears are competing. On one side, traders want to lock in profits after a series of gains in the short term; on the other side, institutions are preparing allocations for next year. So despite the rally over these days, the market remains quite cautious. The military industry and media sectors are leading, while pharmaceuticals and semiconductors are noticeably weaker.

However, there are two details worth noting. First, the index is approaching the 4,000-point psychological barrier, which is a resistance level. More importantly, the index has not yet recovered the mid-November high. If it weakens again here, it could form a "double top" pattern from a technical perspective. Once a double top is confirmed, the subsequent correction space could be quite large.

Second, although the last three trading days have all closed higher, the focus has not shifted upward. Interestingly, each of these three days saw more declining stocks than advancing stocks. This indicates that the market's risk appetite has not truly improved.

In simple terms, after this rally, the divergence between bulls and bears is widening. Liquidity should be relatively loose after the holiday, and combined with the historical pattern of post-holiday catch-up rallies in A-shares, as long as there are no major external changes, a new wave of gains is likely after the holiday. But after reaching a high, a correction is inevitable. The real start of a new trend depends on the medium-term moving averages turning upward.