The May moving average held up. The rapid rebound after the dip to 3859 basically signaled that a second dip is unlikely.

If you look back at historical K-lines, you'll notice a pattern—every slow bull run of around 1,000 points is always followed by a monthly-level pullback. Time window? Around three months. Pullback range? Within plus or minus 100 points of the May moving average. If it exceeds this range, the uptrend is likely to reverse.

From the early April low of 3040 to the November peak of 4034, the index rose exactly 1,000 points. Then there was a single-month pullback of 1.67%, landing right on the May moving average (currently moved up to 3897). These three months of consolidation around 4000 is a classic "bull retracement" pattern, and the correction seems to be done.

If we extrapolate according to this rhythm: the main upward wave should start as early as this month or at the latest, early next month. If we still project a 1,000-point rally, starting from 4034, the target is around 5034—which is pretty close to the previous cycle's high of 5178.

Looking at this month's low, the theoretical lower bound is 3789 (May moving average minus 100 points). The actual lowest point was 3859, leaving a buffer of 70 points. With such a strong rebound from this level, it's likely the ironclad bottom for December.

The external environment is also cooperating. The Fed's rate cut expectations are heating up, and a 25 basis point cut is almost a certainty, which will directly boost risk assets. On the domestic side, incremental funds from insurance capital are being released, and liquidity is clearly improving. With technicals and funding both positive, short-term optimism prevails.

Of course, caution is warranted above 5000 points. After all, that's the resistance level left by the last bull market, so it's better to observe more and act less at that point.