The Yin-Yang and Bagua formation is a unique characteristic of China. Whenever "Yin-Yang" or "Bagua" is mentioned, people around the world think of China. With the progression of time, the concept of Yin-Yang is no longer limited to philosophy—it is also applicable in the field of finance and economics. Today, the author will introduce how to analyze the stock market using the Yin-Yang contrarian theory. Let’s take a look~~  

The core principle of the Yin-Yang contrarian theory is that crowd behavior determines investment decisions. It suggests that in both the stock and futures markets, when everyone is bullish, it indicates that the bull market has peaked; when everyone is bearish, the bear market has bottomed out. Investors only need to hold a view opposite to the crowd to ensure profitability.  

Of course, in the Yin-Yang contrarian theory, it doesn’t mean that investors should immediately turn bearish when everyone is bullish—it is a dynamic concept that also considers proportional trends. The theory does not claim that the crowd is always wrong. In fact, the crowd is generally accurate in identifying trends. When most people are bullish, market trends will be dominated by optimism, driving purchasing power upward. However, when bullish sentiment becomes nearly unanimous, the market trend undergoes a qualitative shift.  

Additionally, the theory argues that before a market reversal—such as when a bull market turns into a bear market—every investor believes prices will continue to rise. When this consensus is reached, mass buying exhausts purchasing power until no buyers remain, and the bull market ends amid widespread optimism. Conversely, when a bear market transitions into a bull market, pervasive pessimism leads investors to sell until all positions are liquidated. Once bearish sentiment can no longer drive further selling, the bear market has bottomed.  

So, how can we gauge public sentiment? Beyond intuition, two key indicators should be considered: the Bullish Sentiment Index and the Market Sentiment Index. Only by combining these three metrics (including intuition) can one more accurately and appropriately assess market conditions, ensuring that the measures taken are of greater value.