6100 Points Finally Breached — No Regrets!

2007/10/16 15:29:29

Today we stood above 6100 points — finally nothing to regret. 6100 points was once the peak of the Shenzhen Component Index during the 1996 bull market, which also launched after just breaking through 1000 points. By comparison, this round's bull market hasn't been too aggressive — it took over two years to reach the amplitude the last one completed in just over a year. Precisely because this pace is relatively moderate, it won't be the true ultimate top. However, a medium-term correction is needed; we're just waiting for the resonance point.

Today's market continued last week's pattern: big oscillation followed by the rest of "China"-prefix stocks while theme stocks launched. Today the sugar industry had a big launch. 600737 barely moved, mainly because right now China's largest sugar production hasn't been injected into it yet. Today's rally seemed a bit lacking in legitimacy. However, this stock's most bullish theme isn't about having the largest sugar — it's something else. For such mid-to-long-term stocks, short-term price action isn't important. Just like 000777 — from 7-something yuan in December last year to over 47 yuan now, with the real theme still not having materialized. That's how mid-to-long-term stocks work.

But right now, individual stocks aren't what matters. What matters is the rhythm of this race-to-the-top game. Let me lay out the script: After one rotation of theme stocks, if there's no special news, the "China"-prefix stocks will have to charge again. Now that the "China"-prefix cohort's returning companions have shifted to themes, mainly just PetroChina and China Mobile remain. Shenhua also hasn't reached 100. There's room for all of them — the key is the time afforded by policy. In the short term, one round of oscillation is unavoidable. After the oscillation, if there's no news, the "China"-prefix stocks will switch back and restart.

After the "China"-prefix stocks have exhausted the returning-cohort rally, next comes index futures. However, there are variables here, and of course efforts are being made outside the market to delay the index futures. Positions aren't always fixed — many positions can be repositioned. Nothing is absolutely unchangeable; success depends on human effort. Of course, if the effort fails to change anything, there are no regrets either. Speculation is the simplest game — who's afraid of whom?

Of course, these are all minor issues. The key is the overall direction of policy. This ID has been very clear: around November is the resonance window for this timing. Once the direction shifts, this race-to-the-top game is over. Once the left side of the top is done, naturally comes the right side.

This ID can state very clearly: after the final top forms, at most 20% of people will be able to preserve today's market value. It's not that retribution won't come — it's just that the time hasn't arrived yet.

Everything that needs to be said has been said. There are things tonight, so I can't write a post. If possible, I'll make it up tomorrow morning.

Tomorrow's market analysis will have to be done in the evening, because there's a meeting right after the close. Just letting you know in advance — apologies.

Signing off first, goodbye.