Today, a few news items taken together make the main thread clear: on one side, the new A-share trading rules have officially taken effect, while on the other, indices have broken key levels. This suggests that the market is being pulled between 'accelerated institutionalization' and 'cautious capital flows'. ETF Radar will follow this line of thought today.

First step: On July 6, the new trading rules simultaneously revised by the Shanghai, Shenzhen, and Beijing stock exchanges came into effect. The key points mentioned in the news include an expanded scope for post-market fixed-price transactions and the introduction of a market maker system on the Growth Enterprise Market (GEM). In simpler terms, this means there will be more opportunities for additional trades after the market closes; the market maker system can be understood as having dedicated entities continuously quoting buy and sell prices to ensure that trading does not become too inactive. Brokers are also actively updating their apps with rule explanations, clearly indicating that regulators aim to make transactions smoother, improve liquidity stability, and modernize market infrastructure.)

[未翻译/untranslated] 按理说，这类消息通常偏积极。因为交易越方便，理论上越容易留住资金，也更利于一些成长板块获得更平滑的定价。尤其创业板引入做市商，这对白话来说，就是给波动大的小票多加几盏路灯，别一有风吹草动就没人接单。所以新闻的第一层含义，不是“立刻涨”，而是“市场的路在修宽”。

But in the second step, the market's reaction on that day was not as optimistic. Today, all three major indices of A-share markets closed lower, with the Shanghai Composite Index down 1.26% and losing the 4000-point mark, the Shenzhen Component Index down 1.24%, and the ChiNext Board down 0.94%. Moreover, the decline was not uniform across all sectors; concepts that were previously popular such as pharmaceuticals, satellite internet, and brain-computer interfaces saw significant adjustments. Rongchang Biopharmaceutical fell more than 9%, Sibo Brain Science over 8%, and South Navigation over 7%. What does this indicate? It suggests that while the rules are beneficial in themselves, actual capital is now more concerned with valuation and pressure for realization. To put it plainly, the market knows

Meanwhile, today's news also highlights this divergence. The combined turnover of the Shanghai and Shenzhen stock markets exceeded 3 trillion yuan, but it was over 7 billion yuan less than the same time in the previous trading day. While a turnover of 3 trillion yuan is not low and indicates that there are still many participants in the market, the year-over-year decline suggests that marginal enthusiasm is waning. In plain terms, this means that while the market remains crowded, people are less enthusiastic about buying than they were a few days ago. With volume failing to continue rising, the market is more likely to shift from 'general euphoria' to 'picky buying'.

Thus, the third step saw sectoral differentiation. What strengthened today were not the best story-telling themes but rather semiconductor wafers, GPUs, and bank stocks. Yanyan Silicon reached a limit-up, Muxi Shares rose more than 14%, and China Construction Bank gained over 2%. The underlying transmission chain is significant: when the major index falls while trading volume remains but market enthusiasm cools down, capital tends to shift from pure concepts to two types of directions. The first type has industrial logic and can still deliver performance, such as semiconductors and GPUs; the second type is relatively stable in position with lower volatility and can still support the index, like banks. Imagine a market where people are seats at a table, and when the music starts to slow down, they rush for two types of chairs: one that looks the most solid and another that seems likely to retain value in the next round.

This also explains why today's news cannot be simply interpreted as 'A-share market fell, so everything is bad.' On the contrary, today more resembles a style screening. While trading mechanisms are improving, short-term risk appetite has not warmed up in tandem, leading to funds no longer indiscriminately chasing themes but instead favoring hard tech leaders and financial stabilizers. There's also a small counterflow worth noting: while indices breaking below 4,000 points can scare people, semiconductors and banks are still performing strongly against the trend. This actually indicates that it is not panic selling across the board but rather internal gear shifting in the market.

Another background point: There is also news of 'two departments supporting reinsurance institutions in increasing their capital and issuing capital ', aimed at accelerating the construction of Shanghai as an international reinsurance center. In plain terms, capital are ways to help financial institutions prepare more 'buffers' so they can withstand risks better. This news resonates with the strengthening of bank stocks: both indicate that the foundational building of the financial system is continuing. Therefore, today's rise in banks is not just defensive but also reflects some expectations of benefits at a systemic level.

Following this line of thought, the relevant ETFs naturally fall into place.

First, let's discuss SOXX. One of the strongest market signals today is the counter-trend strength in semiconductor wafers and GPUs. The ETF Radar model has a positive bias towards SOXX with consistent signals. The first quantitative evidence is that SOXX AUM = $40.9B, with net new creations of +$8,807M over the past day, representing a 21.51% increase in AUM. In plain terms, this means real money is flowing into the ETF, not just positive sentiment. The 21.51% increase is significant, indicating substantial rather than sporadic capital inflows. Second, the arc window shows SOXX -1.65%, SPY +0.13%, and SOXX-SPY excess -1.77%. An excess return of -1.77% means that SOXX underperformed the broader market by 1.77% recently, suggesting some lag. Third, the recent 4-day excess is -0.65%, indicating no particularly strong short-term performance either. In summary, the data paints a picture where capital flows are very active but prices have not fully caught up. This aligns with today's A-share news of weak indices and strong chips, pointing to a concentration of funds in hard tech. As an aside, comparing the tape, SOXX over 20 days is -5.55%, indicating that the market has yet to fully buy into this trend; ETF Radar takes a more medium-term stance, so here we have 'positive news and capital flows but prices still digesting recent performance'.

The second one to look at is KBE, which can also provide insight into the banking sector. The model has a slightly positive bias towards KBE, with signals that are relatively consistent. The first quantitative reading shows an arc window of KBE +3.99%, SPY +0.95%, and excess +3.03%. An excess return of +3.03% means it outperformed the benchmark by 3.03%. The second reading indicates a cumulative gain of +1.67% over the past seven days, with a maximum drawdown of -1.10%. A maximum drawdown of -1.10% is not significant, indicating that the decline was relatively contained. The third point shows net inflows into the fund of +$228M, representing an increase of 14.43% in AUM. This suggests that capital is flowing towards instruments like KBE. Today's news of China Construction Bank rising more than 2% and the policy announcement regarding capital replenishment tools for reinsurance aligns with the direction of KBE. Although KBE is a bank ETF, it does not directly map to the A-share banking sector, but it conveys similar market sentiment: as markets shift from to more robust valuation, banks are likely to be reassessed and potentially valued more favorably again.

Thirdly, look at MCHI. Although the mainline today is mainly switching within A-shares, the index breaking below 4000 points itself reminds the market that overall Chinese equities are not in a fully favorable position. ETF Radar has a generally negative outlook on MCHI with consistent signals. First, there was a net redemption of -$400M or -6.83% AUM for MCHI on a single trading day, which means capital is being withdrawn. Second, the arc window shows MCHI at -1.19%, SPY at -0.13%, and excess at -1.06%, indicating that it underperformed the US stock market by 1.06%. Third, the implied volatility of options is 33.37%. In simple terms, this means the option market expects significant future volatility, akin to insurance premiums increasing. This point somewhat contradicts today’s news about semiconductor and banking sectors showing local strength, but the system remains negative on MCHI because it looks at overall funding and risk pricing over 1 to 3 months. The divergence itself is a reminder: while there are hot spots in the market, this does not necessarily mean that the broad-based environment has strengthened.

Fourthly, consider IEF, which is less directly related to today’s A-share news but is pertinent to the interest rate environment behind a banking advantage and growth differentiation. The ETF Radar model has a negative bias towards IEF with consistent signals. IEF is an intermediate-term US Treasury ETF, essentially a fund that bundles 7- to 10-year US Treasuries. In plain terms, higher bond yields put more pressure on it. First reading: COT 10y net short ≈ -1,938,747. COT net short means the positions betting on a decline minus those betting on an increase still have many short positions. Second point: IEF had net outflows of -$1,606M during the reporting period, or about -3.43% AUM, indicating that funds are also flowing out. Thirdly: FRED DGS10 ≈ 4.49% is the yield on US 10-year Treasury bonds, which in simple terms means long-term borrowing costs remain high. Today’s strength in bank stocks aligns with this high-interest-rate environment: higher interest rates typically make banks’ spread logic more visible to the market; however, they are not friendly to bond prices. The connection to today’s A-share news lies in the market preference for a direction that offers “more stable cash flows and direct benefits from rising rates.”

Looking at these ETFs together, today's ETF Radar does not paint a fully bullish or bearish picture but rather a layered map: semiconductors in hard tech are positive; banks and financials also show a positive signal; however, Chinese broad-based indices and intermediate-term bonds remain cautiously viewed. In plain terms, the most important aspect today is not whether to 'buy or sell', but where the money is moving.

To wrap up: today's fresh news indicates that systems are continuing to optimize, but funds are not indiscriminately embracing all assets. Instead, they are more concentrated in sectors like semiconductors and finance, which offer stronger traction. Again, the above is a directional prediction by our system quant model for general markets and does not constitute personalized investment advice; please consult a licensed investment advisor before investing.