Funds Launch a New Round of Provocation Against Policy
2007/9/17 15:46:13
Today's movement was perfectly normal—it simply continued the old pattern of breaking through after rate hikes. Friday's analysis already made it very clear: as long as a 1-minute third-type buy point forms, new highs are the overwhelming probability. That third-type buy point around 11 AM this morning was absolutely textbook, and the subsequent movement was 100% guaranteed activity under this ID's theory. Nothing to say about it.
The year-end market analysis has already been posted in this morning's article "Analysis of Late-2007 Market Movement Under the Capital-Policy Game". To accommodate the majority, the article didn't use this ID's theory for analysis—it only used some common analytical methods, because predictive articles like these aren't very meaningful and are just to give everyone a general directional sense.
What can truly and effectively conquer the market is learning to use this ID's theory for real-time operations. Last week there was a brilliant short-term trade, then another brilliant re-entry point. Starting from that 5025-point mark at segment 93, not even one 1-minute hub type had been completed, but if you understand this ID's theory, you could watch it grow step by step according to the theory's specifications. The composure and ease in this—how could those who spend their time using endless probabilistic nonsense to argue whether the market will make new highs or not, whether it's a real breakout or a fake one, possibly understand?
Stocks are for operating, not for predicting—you must understand the unity-of-knowledge-and-action characteristic of this ID's theory. It's extremely simple right now: just wait for the withering of this 1-minute movement type. The specific theory and operations have been repeatedly covered in the lessons, so I won't repeat them one by one. Also, today's analysis is too straightforward. To save that precious 200-image space, I won't be uploading charts today.
Since there was repeated oscillation at 5000 and even a brief plunge, this ID has also opened up the space expectation a bit for the market. The analysis was already presented in this morning's article—please go read it. Overall, as long as the oscillation centers around the 2/3 line to 3/4 line as the hub, it's acceptable.
Today, the market's capital side has launched a new round of provocation against the policy side. Whether it will succeed depends on how the policy side reacts to this stimulus over the coming days. Generally speaking, if there's no response this week, the chance of a response next week gets even smaller—after all, there's a long holiday ahead, and stability comes first. Nobody would joke around with that.
Regarding individual stocks, the "China"-prefix stocks continue to show strength. More and more people are starting to tout the "China"-prefix stocks recently. This ID started talking about them at 3600—I won't talk about them anymore now. Of course, the "China"-prefix stocks are one wing of this ID's portfolio—they stay till the seas run dry and the rocks crumble.
This ID always tries to see things through to the end. 600569—at the time, at 9 yuan, I said five limit-up boards. That unlucky kid ran into the May 30th crash, so the script had to change. This time, starting from 7 yuan, after all the ups and downs, the original script's promise has been delivered. Of course there are more scripts to come, but this ID owes nothing to anyone on previous promises.
600078—this ID recently sent someone to investigate. Here are the latest findings. All subsidiaries and sub-subsidiaries of this company in the local area have been checked, yet no mining or extraction permit applications have been found at the local land and resources department. Since the company has a tangled mess of companies in the area, it's unclear whether any were missed. Without a mining permit, nothing counts. Based on the situation, the rough possibilities are:
- A farce.
- These private scoundrels want to pocket it themselves.
- They want to follow the example of a certain Mr. Huang—shelve it first, wait until no one's paying attention, then suddenly inject it.
So now, this game has shifted from PE to VC. This ID is too far away, and going to the company directly would be too conspicuous. I also don't want to mobilize provincial-level resources for this matter, so I can only gather information through certain standard channels at the provincial level. If there's anyone local who can, perhaps visit the company to investigate further and see if VC can be turned back into PE.
While investigating this matter, I also learned about another thing: someone wants to bring in an American donkey to take a stake in a certain donkey. Currently the Chinese donkey is very powerful, so someone wants to pull such tricks. However, the company is quite resistant, so the outcome is really hard to say. If the American donkey actually gets let in, those donkeys are going to go wild again. But this is just something someone is maneuvering on. In reality, things are often maneuvered into existence, but maneuvering doesn't always produce results. So this can only be treated as a VC project—don't get too obsessed.
Note: this ID said "donkeys"—I didn't mention any specific stock.
Today, dancing on the knife's edge, we brazenly broke the top fractal completed last week. So we might as well live it up a bit—I'll answer everyone's questions until 5 o'clock.
Replies
缠中说禅 2007/9/17 16:06:45
[Anonymous] Spring日 Delete all comments by this person
2007-09-17 15:51:54
Hello Sister Chan! I've had a question that remains unsolved: between segments 100-101, there's no consolidation divergence against 98-99, and there's no internal line-segment-level quasi-divergence either. How can one determine in real-time at segment 101 that it's time to re-enter?
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When comparing strength, you don't just compare the most recent segment using consolidation divergence. In previous lessons, there was specific discussion about strength comparison within hub oscillations. You must start looking from segment 96. Before 101 comes out, you can only first look at the oscillation of the hub from 96 to 99. This oscillation didn't break point 97, meaning the oscillation's strength is limited. So it can only be hub oscillation. Moreover, inside segment 100, there's a typical pattern: after the yellow line drops, a double pullback, then another drop, and this second drop clearly can't match the first yellow line drop. Also, the bar area can't match either.
Additionally, below line segments there are no hubs, so you can't mechanically apply hub concepts—this must be clear. Generally speaking, it's best not to operate on line segment levels. Without even a hub, it's meaningless—unless your concepts are particularly clear and you've thoroughly studied hub oscillations.
缠中说禅 2007/9/17 16:09:49
[Anonymous] 与你同行 Delete all comments by this person
2007-09-17 15:55:58
OP, for individual stocks, if a top fractal appears and is immediately followed by a bottom fractal, while the market's direction is uncertain, can you buy such stocks?
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This situation has been explained very clearly. After a daily or weekly top fractal, the key is to watch the 5-day or 5-week line. This time the market continued breaking new highs after the weekly top fractal precisely because the 5-week line wasn't effectively broken, forming a perfect re-entry point. Reference what was said about 000938 to understand. As for the relationship between the market and individual stocks, that's a different question. Generally speaking, those with less skill should ideally buy stocks with high correlation to the market. For the highly skilled, it doesn't matter.
缠中说禅 2007/9/17 16:13:22
[Anonymous] 白玉兰 Delete all comments by this person
2007-09-17 16:04:18
Hello, sister!
If Tomato Sauce's former executives don't resign, the additional share issuance won't be approved?
Without the share issuance, there's no escaping the predicament?
==
Correct, because they were originally under the Tang brothers. Now they all have to be purged. Getting things done—how could it ever be that simple? There's a lot of work involved.
缠中说禅 2007/9/17 16:16:57
[Anonymous] 下岗工人 Delete all comments by this person
2007-09-17 15:57:50
I read your articles every day but don't really understand them. Is today saying we can go wild? Hold stocks and wait for the rise? But I'm afraid of heights—I sold today and went to subscribe for new stocks. So unlucky—didn't understand the teacher's article.
==
That was the right call. If psychologically you can't handle it, stepping out first is absolutely correct. There are plenty of opportunities in the market—don't force yourself; don't give yourself a heart attack.
Of course, those who've already committed and aren't afraid of being in deep can continue. This is dancing on knife's edge—if you get cut, make sure you have the psychological resilience.
And of course, if your technical skills are good and you're following the movement, then it doesn't matter. Even if sudden news hits, a decisive cut—who's afraid of whom?
Without this psychological fortitude, better not to play dangerous games.
缠中说禅 2007/9/17 16:18:14
[Anonymous] rivus Delete all comments by this person
2007-09-17 16:06:03
Boss, are the non-ferrous metals about to go into a "strong stay strong" mode? Apart from your positions?
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Isn't 600432 one of this ID's stocks? I've been in since the beginning of this year, bought at under 20 yuan. Up to today, besides this ID, who else held it?
缠中说禅 2007/9/17 16:21:05
[Anonymous] Sina User Delete all comments by this person
2007-09-17 16:17:44
When will China Aluminum finish its correction? Sister Chan has been stuck holding it for a long time.
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What more is there to ask about China Donkey? This ID said at the time to ambush it downward—said it so loudly the whole street knew. Why didn't you leave? Just like 000802, I spoke that clearly at the time, yet there were still people who didn't exit. Now the small ABC has emerged. Short-term, just watch the pullback strength toward the hub above. Medium-term, there's of course no problem.
缠中说禅 2007/9/17 16:22:44
[Anonymous] 云儿 Delete all comments by this person
2007-09-17 16:20:40
Hello, Sister Chan. Let me report my learning progress to you.
Before, I was confused whether the market went up or down. Now I know to buy at buy points and sell at sell points. Even if I miss the first sell point, there's still the second sell point.
Before, I only knew to blindly add investments. Now I know I can sell first and buy back, making money all the same.
Although my skills aren't refined yet, following your line of thinking, trading stocks has never been this relaxed and carefree.
Very grateful.
==
No need to thank me. This ID is at most a sparring partner—the results are all from your own effort. You can only keep working hard.
缠中说禅 2007/9/17 16:26:08
[Anonymous] 清空 Delete all comments by this person
2007-09-17 16:22:10
Sister Chan, I haven't mastered your technique. I cleared my positions before 9/11 and have been sitting on the sidelines since, so frustrated! For those of us who don't have much time to watch the market, could we just pick one or two stocks to hold till the seas run dry and the rocks crumble, ignoring the market's storms?
==
I said very clearly that day: once the 5-week line is broken, there must be at least a major rebound. Why didn't you re-enter that day?
A critical point of this ID's theory is rhythm. Especially for those operating at small levels, rhythm is even more important. If you sell and don't buy back, you might as well not have sold and just wait for a large-level sell point instead.
After buying, immediately think about the sell point. After selling, immediately think about the buy point.
If you don't have enough time and operations are inconvenient, choose large-level operations. Don't play with small levels—otherwise, buy and sell points are easily missed. One meeting, one task, and they're gone.
Small levels are only suitable for professional or at least semi-professional market watchers.
缠中说禅 2007/9/17 16:27:08
Breaking Chan Within Chan Delete all comments by this person
2007-09-17 16:23:56
Actually, hubs are pretty much like moving averages.
==
I would recommend you do more reviewing.
缠中说禅 2007/9/17 16:30:23
[Anonymous] 粗茶淡饭 Delete all comments by this person
2007-09-17 16:25:53
Hello Master Chan! How do you view the venture capital and brokerage-stake sectors? My stocks in the venture-capital-stake sector are all drooping. 000850 has practically zero cost, so that's bearable. But that lousy bus 741 still hasn't made any money. Could you give some guidance?
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Now that positions are high, some thematic plays that have been over-exploited will naturally need to lie flat for a while. However, if there's no major policy intervention, sectors will rotate to them eventually. But there are too many brokerage-stake stocks. Without solid fundamentals to support them, they can't possibly get the frenzied treatment like the first half of the year, when anything with a brokerage stake got wildly hyped.
缠中说禅 2007/9/17 16:32:42
Free from Money Delete all comments by this person
2007-09-17 15:59:04
Huge support for Master Chan!
May I ask: For this round of "living it up," will second-tier component index stocks take the lead? Or growth stocks?
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This time, the second- and third-tier stocks will naturally show more strength. That's why I said "China"-prefix stocks and second/third-tier stocks—two wings.
缠中说禅 2007/9/17 16:36:45
[Anonymous] Sina User Delete all comments by this person
2007-09-17 16:02:30
Sister Chan, why is it that the theory of Chan Theory is very clear, but once I actually start operating, I get confused again? So frustrated!
==
The fundamental reason is that you haven't studied the theory thoroughly enough. Look—above, many people still haven't figured out today's segment divisions, so they don't understand how the third buy point came about either. Therefore, first get the theory clear. You must study the charts more—they're drawn with money.
Think about it: right now, the most expensive paintings typically go for tens of millions at most. But pick any random chart—it costs at least a hundred million to draw just one daily intraday chart, let alone daily, weekly, and annual charts.
Such precious paintings, and you're not carefully appreciating them? That's such a waste.
缠中说禅 2007/9/17 16:45:07
[Anonymous] 路边社通讯员 Delete all comments by this person
2007-09-17 15:54:07
Sister Chan, I've been studying for 2 weeks and am finally almost caught up with the group.
When studying strokes, fractals, and line segments, I felt the content before and after was basically consistent and easier to understand. Once I got to line segments, I started getting confused. The hub concepts from before lesson 55 seem to have been overturned by the later content.
==
Nothing was overturned—this issue has been explained very clearly. The original hub definition was purely theoretical, making it very cumbersome to operate, because nobody can truly start looking from each individual trade.
This issue has been repeatedly covered across several lessons. Please read them again.
缠中说禅 2007/9/17 17:04:19
Sorry, just got a long-distance phone call. Extending by 15 minutes.
缠中说禅 2007/9/17 17:06:07
Entangle Me Delete all comments by this person
2007-09-17 16:56:02
Last 5 minutes.
Sister, when will the music blog be restored?
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That website was probably killed by the 300,000+ hits it got that one time. It hasn't recovered since that day—there's nothing this ID can do either. Finding a new one would mean re-uploading all the music again—too much work. Let's wait and see if it can come back to life.
缠中说禅 2007/9/17 17:07:52
[Anonymous] Sina User Delete all comments by this person
2007-09-17 16:56:26
OP: On the 1-minute chart, there are two K-lines at the top with the same high. Strokes on both sides are formed. Can this top count as a top fractal??? Thank you!!!
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Without a top fractal, how could there be strokes? If it's not a top fractal, how could it be a top? "Top" is simply shorthand for "top fractal."
缠中说禅 2007/9/17 17:09:22
Happy vs Veggie Bug Delete all comments by this person
2007-09-17 16:59:29
Chart 1:
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Chart 2:
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-------------/----\--/--\------/--\--/---
------------/------\/----\----/----\/----
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----/\----/----------------\/------------
---/--\--/-------------------------------
--/----\/--------------------------------
-/---------------------------------------
Sister Chan, how many line segments are in Chart 1 and Chart 2 respectively???
==
Both are one segment.
缠中说禅 2007/9/17 17:12:00
[Anonymous] 大盘 Delete all comments by this person
2007-09-17 17:00:56
Blogger,
I've been tangled up with line segments for a while. Let me ask a question about how to view market movement like watching flowers bloom and fall.
After a divergence buy point, two completely non-overlapping 1-minute hubs form. If the 2nd 1-minute hub doesn't produce a third buy point but instead extends through 9 segments to form a 5-minute hub, and this 5-minute hub temporarily doesn't overlap with the 1st 1-minute hub either,
should we currently view the movement as an uncompleted 1-minute trend, or treat it as 5-minute oscillation for our current operations?
I really want to watch stock movement like watching flowers bloom and fall, but there are still quite a few questions.
==
Of course it's 5-minute movement—treat it as 5-minute hub oscillation.
缠中说禅 2007/9/17 17:21:46
[Anonymous] 影子 Delete all comments by this person
2007-09-17 17:04:52
I missed half the rally today. After reading too much of Little Chan's blog, I—someone who's almost a perma-bull—actually missed half the rally. Seriously.
The blogger uses too many derogatory terms for the bulls. I'd estimate the proportion of Chan followers who missed the rally is not small. Let me share a different opinion that I hope helps everyone. Don't blame me if I'm wrong.
==
Your judgment is completely wrong. Apart from funds that must be kept for tactical flexibility and positions that had already hedged risk, this ID has been 100% fully invested since 3600 points. Of course, this ID's tactical funds flow continually within the portfolio, generally fluctuating between 10-30%—this is the most efficient approach. Generally speaking, when there's a larger sell point, this ID's tactical funds might reach 30%, though generally they won't reach that ratio. Additionally, this ID always maintains a certain proportion of risk-hedging operations—I won't elaborate. This is actually very important for large capital. Without this, this ID wouldn't have been so composed on the morning of May 30th. After all, for large capital, during that chaotic morning, even at a second sell point, you can't move much. But with hedging, it's different.
From a hedge fund perspective, being purely long or purely short both carry risk. There must always be some hedging.
缠中说禅 2007/9/17 17:32:17
[Anonymous] 时时是花时 Delete all comments by this person
2007-09-17 17:17:23
Happy vs Veggie Bug Delete all comments by this person
2007-09-17 16:59:29
Chart 1:
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----------------/\--------------------/--
---------------/--\----/\------/\----/---
--------------/----\--/--\----/--\--/----
-------------/------\/----\--/----\/-----
------------/--------------\/------------
-----------/-----------------------------
----/\----/------------------------------
---/--\--/-------------------------------
--/----\/--------------------------------
-/---------------------------------------
Chart 2:
----------------------------------------/
---------------/\----------------------/-
--------------/--\----/\--------/\----/--
-------------/----\--/--\------/--\--/---
------------/------\/----\----/----\/----
-----------/--------------\--/-----------
----/\----/----------------\/------------
---/--\--/-------------------------------
--/----\/--------------------------------
-/---------------------------------------
Sister Chan, how many line segments are in Chart 1 and Chart 2 respectively???
==
Both are one segment.
Teacher, in the example chart you gave in Lesson 71, Chart 2 above was divided into 3 segments!
Should Chart 2 above be understood using the following passage:
"In the second type of situation's second characteristic sequence, its direction is consistent with the original line segment. The appearance of an inclusion relationship means the original line segment has sufficient energy. And the second type of situation itself already means insufficient energy for the reversal of the original line segment. With these combined, the inclusion relationship must of course be applied."
==
If Chart 2's falling segment consists of 5 strokes of decline, then it's three segments.
缠中说禅 2007/9/17 17:37:06
Everyone note: a characteristic sequence must have three elements for a fractal to be possible. How could two elements possibly form a fractal?
The phone has been ringing nonstop today—all long-distance calls. Just took another one. My answers haven't been very smooth today.
But I need to sign off now. See you later.
缠中说禅 2007/9/17 15:56:38
All Red Delete all comments by this person
2007-09-17 15:52:22
Isn't it a stretch to consider the period from 10:58 to 11:18 this morning as a single line segment? The three strokes aren't clear, and there's no overlap.
==
Please continue studying line segment division. Why can't that line segment start from this morning's high?