3424 Points Initially Demonstrates Its Power

2008/3/28 15:12:27

N weeks ago in the revisited outlook, this ID gave 3424 points as the most likely ending point for this decline — 2700 points down from 6124, which is 3/4 of 3600. The first stop at 4778 was exactly 3/8. Today, this level initially demonstrated its power.

Note: a most basic piece of technical common sense — any technical level has an allowable range of plus or minus 3%. Since there are far too many dimwits in this world, I must say this again. For example, the rebound starting from 4778 points last time — this ID said it would end at 900 points up, the 1/4 level of 3600, which is 5678 points. The final ending point was at 5522, completely within the 3% range of 5678 points. Yet some people moaned like Xianglin's Wife for a whole month because it didn't reach exactly 5678. What kind of person is this? No common sense of their own, yet stupid enough to broadcast it to everyone on the street. The world is full of such people. If these people don't get wiped out, where's the justice in the market?

And as I said yesterday — just like the last time when 580989 launched from below 0.4 and led the market to break below support before the market ultimately returned to the pre-breakdown platform — today's price action proves that there's really not much new under the sun.

But one must pay even closer attention to this: since today's rally wasn't even enough to create a bottom fractal on the daily chart, and today's rally was lured by numerous rumors, once these rumors fail to materialize next week, another round of selling to retest support cannot be ruled out. Therefore, whether 3424 points can ultimately become the bottom has absolutely no final conclusion yet. One must adopt flexible strategies to deal with this, rather than being single-minded.

From an ultra-short-term perspective, 3499 points is the critical level. Once it can't hold, another bottom test becomes inevitable. Of course, as long as it can hold above 3499, there's hope for the market — making that level extremely important.

For the ultra-short-term, watch whether early next week, the 5-minute MACD ultimately evolves into a situation where the red bars can no longer extend and the area is smaller than the previous set, corresponding to whether the zero axis on the 15-minute MACD can be broken through. If not, a retest of support levels like 3499 is certain. Of course, the skilled don't need to wait for 3499 to actually break before exiting.

For small capital, the principle has been stated many times: seize the opportunity, take a bite, and the moment it looks like it can't continue, run first. This decline from 5522 — using this principle to catch countless bottoms, each time making money according to technical signals then running out first — proves that downtrends really aren't a big deal. The key is whether you can hustle. If you hustle well, downtrends are paradise too.

Of course, as mentioned before, for large capital, the current hustling must include attention to accumulating base positions. Large capital differs from small capital: small capital can build a full position in one second, but large capital doesn't have that luxury. Therefore, there must be a deliberate accumulation process. Note: from 5522 downward, it's only recently that this ID gave the requirement for large capital to start accumulating base positions. Why? Because before, we were still far from the bottom, so accumulation wasn't even on the table. But at the current level, even if 3424 ultimately doesn't become the bottom, what's below is merely a bear trap. For large capital, that's nothing at all, so starting to accumulate base positions now is perfectly timed.

Weekend — go rest from stocks.

Signing off. Goodbye.