Cliff-Like Decline Continues Bringing the Short-Term Buy Point Closer

2008/8/11 15:07:35

This morning I already asked everyone to look at the 30 or 60-minute charts to gauge the momentum. From those ever-lengthening green bars on the 60-minute chart, anyone with eyes could tell that downward momentum remained powerful. Therefore, the first scenario mentioned this morning has been increasingly evolving from possibility into inevitability.

In the worst case, this week will only see the second hub rebound after the breakdown from the 2700-point hub (generally speaking, this move should appear during tomorrow's session, or at the latest the day after). The strength of this rebound may not even reach today's high, followed by continued freefall. After the second hub, once divergence appears, it means a buy point of a higher level has emerged—this buy point is at minimum at the level of the second hub from the decline off 2924, and should at least constitute a stroke-level move on the 30-minute chart. (In the worst case, this will definitely appear by early next week at the latest; under normal circumstances, if it's not the worst case, the probability of it appearing this week is quite high.)

However, if this rebound is only at the second hub level from 2924, then there will still be further decline afterward to form a divergence completing the entire downtrend from 2924. After that, the more significant move—the sub-level rebound of the so-called major hub since July—will be the most important one. Whether it forms a third-type sell point will be determined by this move. Once that sell point forms, there will be an even more cliff-like decline ahead.

In terms of timing, to avoid this third-type sell point from forming, it depends on whether the policymakers finally get it. If they're still deluding themselves, still focused on the opening ceremony, then let them dazzle themselves like those tasteless, grotesque fireworks, and let the broken legs and severed limbs fly across the sky—that's more spectacular than any fireworks show.

For rigorous analysis: this Shanghai decline is also a classic four-time bottom-breaking pattern, except the second bottom is lower than the first one on June 20th—this is something commonly encountered in weak consolidation patterns. The details about consolidation pattern types will be discussed in future lessons.

The stock market's opening ceremony is rehearsing cliffs. Whether the cliff that this ID has repeatedly warned about in recent times will spread to the economic sphere depends on the performance of certain people. If they've got the ability, let them launch over a thousand rockets to fake the weather like they did on the opening ceremony day. This ID would very much like to see that—please, go ahead.