This week's A-share market, as the National Day holiday approaches, increasingly gives off a "capital going on early holiday" vibe. On September 29, the three major indices closed slightly higher, with only real estate pulling up a rally on policy expectations, while components, media, and semiconductors that plunged the previous day staged a symbolic rebound, and the remaining sectors barely moved at all. Total turnover across the two markets shrank directly to 1.41 trillion yuan, hitting a new low for the year, nearly 300 billion less than the previous day, and less than half of this rally's peak.
Once volume cools, the old question of "hold stocks or hold cash over the holiday" predictably floods screens again. This question is asked every year precisely because it is genuinely difficult. Hold cash, and you fear missing the post-holiday rally; hold stocks, and you fear overseas surprises during the break. Especially this year, before the holiday even began, US stocks already delivered several warnings: the three major indices pulled back from highs, the 10-year Treasury yield touched 5.274% intraday, a new high since 2007, and market expectations for a Fed rate hike next month have risen above 70%. Then there is the Middle East, where Trump rejected Iran's peace proposal, triggering repeated sharp swings in international oil prices. The more information there is, the blurrier the sense of direction becomes. Against this backdrop, what posture for riding out the holiday offers the best cost-performance?
What history tells us
From historical patterns, A-shares typically begin gradually shrinking volume starting eight trading days before National Day, and this risk-averse sentiment persists through the first trading day after the holiday; generally by the second post-holiday trading day, capital that went out to avoid risk flows back in succession, and the market's turnover center only then clearly rises. This is the special nature of long holidays. During the closure, overseas markets continue trading normally, and variables like geopolitics, US Treasuries, and oil prices cannot be hedged domestically in real time; combined with quarter-end institutional net value settlement and position adjustments for profit-taking, some capital actively chooses to "step out and hide for a few days."
Historical data shows that during bull market corrections, volume shrinking 40%-60% from the peak is a normal range. Right now we have roughly shrunk to 50% of the peak, and today's 1.41 trillion level just touches the widely recognized dividing line. Only when turnover further shrinks below 60% of the peak should we worry about a trend reversal; the current position looks more like a sentiment bottom, not a trend bottom. Interestingly, over the past 16 years, the Shanghai Composite Index rose in the 5 trading days after National Day in 11 of those years, averaging a 1.5% gain; ChiNext had an even higher win rate, with 14 of 15 years seeing post-holiday trading centers above pre-holiday levels, a probability approaching 90%. There is also a very clear pattern: the more depressed pre-holiday sentiment is, the stronger the post-holiday capital replenishment drive.
Returning to today's market divergence, it is all a mapping of capital behavior: real estate's big rally is a bet on stabilization policy implementation, semiconductors' rebound is an oversold repair after concentrated selling, and most sectors trading flat reflects everyone collectively choosing to "wait and see until after the holiday."
Overseas variables during the holiday
US stocks trade as normal during the National Day holiday, and historical data shows that the A-share market's performance in the first week after National Day is highly correlated with US stock performance during the break—especially in the tech sector, which is almost a one-to-one mapping. But this October's overseas environment is indeed far more complex than previous years. The 30-year US Treasury yield just broke through 5.5%, the Fed's September rate hike has landed with the dot plot retaining guidance for further hikes this year, and the press conference tone was hawkish. The Middle East is also unsettled, with the US-Iran situation repeatedly difficult to pin down, and Brent crude oscillating around $100 per barrel.
Just days ago, the US publicly rejected Iran's proposal for a 7-day Strait of Hormuz navigation plan, and Iran's foreign minister stated he would not compromise on core conditions, leaving the strait navigation talks temporarily deadlocked. High oil prices reinforce inflation expectations, which in turn push up US Treasury yields, which then suppress global risk assets. This transmission chain will repeatedly disturb markets in October. Add to that the approaching US midterm elections in early November, where policy scenarios are constantly being repriced by markets, and volatility could amplify under overseas political decisions.
So choosing to hold cash is equivalent to actively isolating this period of uncertainty, seeking stability. During the holiday, three key data points will land in sequence to set the tone: core PCE inflation on September 30, ISM manufacturing PMI on October 1, and non-farm payrolls on the evening of October 2. These three data releases will directly revise market judgments on the Fed's subsequent policy: if both employment and inflation weaken, rate hike expectations cool, Treasury yields fall, and US tech stocks likely continue to strengthen, then post-holiday A-share tech sector repair momentum will be strong; conversely, if data comes in stronger than expected and Treasuries surge past 5% again, tech stock valuations will come under pressure once more. Additionally, Micron's earnings report on September 30 will directly provide next-quarter guidance for memory chips, with a direct mapping effect on A-share semiconductor memory stocks.
However, there is no need to over-amplify overseas shocks. From recent market action, A-shares' sensitivity to rising US Treasury yields has clearly declined compared to last year. On one hand, domestic monetary policy remains accommodative, with the 10-year government bond yield at only around 1.7%, providing strong valuation support at the bottom; on the other hand, northbound capital accounts for less than 5% of A-share free-float market cap, and its marginal impact is weakening. More often, overseas variables affect opening sentiment and short-term rhythm, but can hardly change medium-term industrial trends.
Of course, this is not to say tech has no risk. After the first-half rally, the tech sector's risk-reward ratio is indeed not as good as at the start of the year, and if US Treasury yields surge sharply, a 20%-30% pullback is not impossible. But conversely, if you go completely to cash waiting for a correction, you could easily miss the rally, since fundamental support remains and industrial catalysts have not stopped. The consumer sector is even more awkward—it looks cheap with a high risk-reward ratio, but household credit and retail sales data have not picked up, making it easy to fall into a "value trap," where cheap has its reasons.
Holding the right structure
Given the current complexity of global markets, the core of holding stocks over this year's National Day holiday is not betting on index direction, but getting the structure right. What you hold matters more than whether you hold. Specifically for sectors, the "barbell strategy" is a relatively accepted approach—one end for offensive elasticity, one end for defensive ballast, without churning in the middle.
On the offensive side, prioritize tech hardware. After this pre-holiday round of adjustment, most tech sectors' deviation from the 20-day moving average has fallen back and has not reached historical overheating thresholds, so short-term risk has largely been released. AI servers, optical modules, and semiconductor equipment have the hardest industrial logic and the most solid orders, making them the directions with the greatest post-holiday elasticity. As for the recently hot AI Agent and consumer-facing applications, do not get excited and benchmark them against US stocks like MetaMuse—the internet ecosystems, labor costs, and user habits on both sides are completely different, and domestic companies trying to directly replicate the rally face great difficulty. Just watch them, do not chase with heavy positions.
On the defensive side, use high-dividend stocks as ballast. From a positioning perspective, this sector currently has about 9% of upside space to the upper channel boundary; the gain is not particularly impressive, but its advantage lies in high certainty. With many overseas disturbances in Q4, holding some dividend positions can effectively smooth portfolio volatility, suitable for capital that does not want to churn too much.
The consumer direction can also serve as a supplement. Historical market data shows that pre-holiday consumer style tends to be relatively dominant, with food and beverage, pharmaceuticals and biologics, power equipment, and telecommunications sectors showing good win rates and average interval returns, while post-holiday consumer sector cost-performance also ranks relatively high. But this year's consumer recovery prospects largely depend on the direction and intensity of domestic fiscal policy. Some views hold that whether the fiscal policy focus can shift from tech to consumption is key to narrowing the divergence between tech and consumption, and the consumer sector's improvement may take longer.
As for real estate, which has rallied sharply recently, frankly it looks more like short-term policy speculation. From a trading heat perspective, the real estate sector's deviation has already touched the threshold, making it a "do not chase" category. Policy support does not equal trend reversal, and if you really want to position in real estate, prioritize regions like Shanghai where fundamentals are recovering first, rather than betting on a broad rally.
On position sizing, roughly 50%-60% in positions with some cash on hand is probably the most comfortable neutral allocation for the holiday. If unexpected negative shocks truly emerge overseas during the break, you have bullets to add post-holiday; if all is calm, existing positions can still capture the repair rally. Able to attack and defend, far more从容 than going all-in or fully empty.
Final thoughts
Objectively speaking, this year's market from the start has been a structural行情 throughout, and post-holiday will likely remain the same. This October indeed has relatively more overseas disturbances, but this precisely shows that the key to holding stocks over the holiday is not "whether to hold" but "what to hold." Tech growth, large-cap financial dividends, and stabilization are three lines with relatively high market consensus. But expectations for post-holiday行情 are better placed on structural rotation rather than broad-based gains. October's non-farm payrolls, inflation, US Q3 earnings, the OCP conference, and AI model updates—these nodes will continuously provide new pricing clues to the market, and maintaining some flexibility is more important than a one-time bet.
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