"Currency Wars and the RMB Strategy" Sequel 6: Central Bank, Don't Let Your Brain Get Waterlogged
2007/4/25 9:03:08
Whether the central bank has a brain is a question for zoology and won't be explored here. Let's assume it does—like a male ape-man—hence the reminder: don't let it get waterlogged.
This ID's views have always been consistent and root-seeking. Some see this ID no longer opposing RMB appreciation and assume this ID has revised its position from years ago. This is absolutely wrong. This ID only cares about views that can be implemented and realized. Since the RMB has already appreciated—that's reality—spouting useless "what ifs" about non-appreciation is wasting bandwidth. But this absolutely doesn't mean this ID now thinks the appreciation was right. This ID still maintains: this was the "July 7th Incident" of the Sino-US currency war, a dishonorable affair. But after July 7th comes eight years of War of Resistance. Who turned a not-too-terrible situation step by step into this—history can judge. This ID has no need for empty talk.
Because of RMB appreciation, America dodged a bullet and gained breathing room. An irreversible fact is that after the appreciation, America has gained the strategic upper hand and initiative. The world's financial trajectory has essentially re-entered the track America designed. If you can't even recognize this, this central bank might as well become a gigolo shop. May I ask: have certain people ever examined their strategic and tactical arrangements from the highest level of overall currency warfare? Do they know what they're doing? Is their level perpetually lagging, constantly reactive? Right now, America is systematically transferring the crises it previously accumulated to the entire world. Do certain people understand the mechanism? Do they realize that RMB appreciation has allowed crises that should have rotted inside America to be successfully transferred globally? If the Iraq War was a military crisis transfer, RMB appreciation is an even more profound economic crisis transfer—and America is succeeding.
Of course, America hasn't truly succeeded yet. Their current strategy still holds plenty of danger ahead, but this danger can now be shared by the entire world. In essence, America has already succeeded enough. The truly meaningful question now has become: "China's monetary strategy under America's crisis transfer." Of course, with the right strategy, there are still many opportunities to prevent America from succeeding. But this ID's only concern is: opportunities need to be seized. If brains are all waterlogged, can they be seized?
This ID can say without the slightest hesitation: a scenario like this is becoming increasingly likely to become reality—that America's already-successfully-transferred crisis gradually drags the world into the abyss, and ultimately, in the grand cycle's grand shock that this ID identified, America once again becomes a phoenix rising from the ashes. It's like playing cards—originally holding a great hand, then losing to someone with terrible cards. What does that say? This ID has long said: this ID opposes the left, the right, and the center. Whether left, right, or center—zero technical content. Playing 3P in their own fantasies, playing until everything falls apart.
Of course, from a personal interest standpoint, because of stocks, this ID absolutely supports RMB appreciation, absolutely supports everyone having waterlogged brains. This ID can accept and exploit the consequences created by any waterlogged-brain person. But this ID still must point out: if brains weren't waterlogged, what other possibilities might exist—even if such possibilities would actually harm this ID's personal interests. But money is already just a numbers game for this ID. This ID would rather have personal interests damaged, even personal safety threatened, than see America and the traitors succeed.
This ID hopes to see a technically sophisticated story, not a completely lopsided contest. China's strong national fortune means even giving America a head start through RMB appreciation, it can still prevail. But the premise: where there shouldn't be water, don't let there be too much. Whether central bank or foreign bank, brains don't necessarily need to be waterlogged. If there's too much water, better to think with the lower body, or go celebrate April 19th—just don't pour it into the brain. This ID has none of that affected "deep love breeds deep pain" sentimentality. Whatever, whoever.
Appendix—same-day analysis:
Even if you only have kindergarten-level understanding of this ID's theory, today's movement shouldn't stump you. The gap-down opening quickly pulled back into the 3688-3699 small hub from the day before—meaning hub oscillation continues, nothing to worry about. After the first three 30-minute periods, the balanced market's pattern and oscillation amplitude were basically established. Today was the most balanced type—the first three 30-minute periods established the full day's high and low points. The afternoon dip was like free money for short-term hedgers.
Technically, the line connecting 04241335 and 04251030 must be broken—otherwise technical analysts will interpret it as a so-called megaphone pattern. From the bigger picture, the 5-minute hub extension starting from 04240931's 3689-3745 range—when it ends depends on whether a third buy or sell point forms in the next day or two. All this needs no prediction. The market itself will tell you.
On sectors: as said yesterday, today needed a sector switch—constituent stocks had to start moving again. The switch was okay. After all, funds also want face—they need a nice market cap before the May 1st holiday. Can't be too aggressive. But the market hasn't been crazy at all lately. Rather, traitors have been getting crazy—self-writing editorials and spreading them, even loudly cursing in foreign financial newspapers. How such people should be dealt with—everyone can discuss.
I have to go now. I'll come back at 9 PM tonight to answer questions. Goodbye.
Replies
缠中说禅 2007/4/25 15:25:17
Even if you only have kindergarten-level understanding of this ID's theory, today's movement shouldn't stump you. The gap-down opening quickly pulled back into the 3688-3699 small hub from the day before—meaning hub oscillation continues, nothing to worry about. After the first three 30-minute periods, the balanced market's pattern and oscillation amplitude were basically established. Today was the most balanced type—the first three 30-minute periods established the full day's high and low points. The afternoon dip was like free money for short-term hedgers.
Technically, the line connecting 04241335 and 04251030 must be broken—otherwise technical analysts will interpret it as a so-called megaphone pattern. From the bigger picture, the 5-minute hub extension starting from 04240931's 3689-3745 range—when it ends depends on whether a third buy or sell point forms in the next day or two. All this needs no prediction—the market itself will tell you.
On sectors: as said yesterday, today needed a sector switch—constituent stocks had to start moving again. The switch was okay. After all, funds also want face—they need a nice market cap before the May 1st holiday. Can't be too aggressive. But the market hasn't been crazy at all lately. Rather, traitors have been getting crazy—self-writing editorials and spreading them, even loudly cursing in foreign financial newspapers. How such people should be dealt with—everyone can discuss.
I have to go now. I'll come back at 9 PM tonight to answer questions. Goodbye.
缠中说禅 2007/4/25 21:05:35
[Anonymous] Ancient
2007-04-25 15:42:12
Teacher, tonight... Chelsea vs Liverpool
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Right, old rivals.
缠中说禅 2007/4/25 21:13:53
[Anonymous] Stock Louse
2007-04-25 19:11:47
Chan MM, a question that's puzzled me for a long time:
Most stock trends have 2 hubs, with divergence ending after the second hub. But if there's no divergence after the second hub, should I:
- Wait for a new hub to form and the yellow/white lines to approach the 0-axis, then check for divergence again? 2. If the trend is a+A+b+B+c+C+d, should I compare d with c or d with b? Or something else?
Stock Louse
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If there's no divergence at that level, two choices: 1. A new hub forms. 2. A small level transforms into a larger level.
缠中说禅 2007/4/25 21:19:04
[Anonymous] Easy to Buy, Hard to Sell
2007-04-25 09:35:04
Easy to buy, hard to sell. Easy to pick stocks, know when to enter, but don't know when to sell. Headache!
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The logic is the same. If it feels unnatural, flip the chart upside down—some software allows this. Then when you see a buy point, sell instead. Of course, the ultimate solution is to treat buy and sell points equally—no bias. Any level's chart structure is the same.
缠中说禅 2007/4/25 21:21:51
[Anonymous] Sina User
2007-04-25 21:17:11
May I ask, 416 halted trading starting today—why? Related to Minsheng restructuring? Please advise! Eagerly awaiting!
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Recently, certain online media and market rumors about Jiant Biological's asset restructuring have caused abnormal stock price fluctuations. Per Shenzhen Stock Exchange listing rules, the stock has been halted starting April 25, 2007, pending a clarification announcement before resumption.
缠中说禅 2007/4/25 21:26:32
[Anonymous] Ah Q
2007-04-25 21:19:14
Teacher, I've had a persistent issue: I clearly identify a top divergence but then feel the level isn't significant enough. Result: the small-level top divergence evolves into a large-level top divergence, and the short-term spread opportunity slips away. Is there any forceful method to make myself exit decisively?
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Very simple. For example, if you operate at the 30-minute level, a 5-minute divergence is within your tolerance. A 5-minute divergence normally only triggers a correction of the 5-minute movement type. Once the first hub of that correction is larger than 5-minute level, you should exit first—because at minimum a 30-minute consolidation will form here. This is why the second sell point is needed. More refined details will be covered later.
缠中说禅 2007/4/25 21:34:52
[Anonymous] Infinite
2007-04-25 10:09:09
Good morning, Chan m
I also hope the RMB doesn't appreciate, to absorb all the world's capital, drain America's coffers, and let the dollar bubble completely burst. But I thought of another issue. Competition between nations isn't just about currency and economics—there's also politics and military. If the RMB always refuses to appreciate, the consequence might be a desperate American counterattack. War would be the final weapon, inescapably aimed at China.
Just one war—America doesn't need to show up personally. Just instigate India, Japan, or even Vietnam to drag China into a quagmire, rendering the RMB worthless.
I think the central bank bigwigs might get waterlogged brains, but national leaders won't be so soft-eared—they must consider the big picture.
China needs to transform from the Jiang era's dough into Chairman Hu's steel plate, and even into the magnet that Chan m hopes for—it needs a process, a gradual style shift.
My thinking isn't thorough enough yet—I'll stop here for now.
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Actually, appreciation or not isn't a huge deal. Once it happens, there must be corresponding countermeasures. The problems we're encountering now were all inevitable—but the countermeasures simply don't exist. What we have is purely reactive, without any strategic purpose—random messing around. Plugging in a few Western economics formulas and you can run the central bank? Their brains are truly rusted.
缠中说禅 2007/4/25 21:36:32
[Anonymous] Stomping Sister
2007-04-25 21:27:17
Sister, hello. Buy at buy points, sell at sell points—easy to say, hard to do! Doing it precisely—even harder!
Continuously practicing!
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Start from larger levels. Don't start with 1-minute or 5-minute—these require high precision and good trading infrastructure. At the beginning, operate at minimum on the 30-minute level.
缠中说禅 2007/4/25 21:42:20
[Anonymous] Sina User
2007-04-25 21:33:39
If you can continuously profit from buying and selling stocks, why still reduce holding costs to zero and hold until the bull market ends? Wouldn't that waste resources and reduce efficiency? Question.
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If you only have 100,000 yuan, naturally there's no need. But if you have 1 billion, then you absolutely must. With large capital, how can you switch stocks every day? And switching stocks requires high precision, high demands on execution time and trading channels. What this ID describes is the ultimate method. Anyone whose capital reaches a certain scale will need this. This is also an important factor in why many people hit a bottleneck at a certain scale.
缠中说禅 2007/4/25 21:50:06
[Anonymous] Sina User
2007-04-25 21:41:07
Blogger: these two days 778 seems to want to go up but can't. Can you analyze what's good about it?
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The rule here is: for this ID's 14 stocks, this ID won't act as commentator. Otherwise this ID would be triple-hatting—referee, commentator, and player all at once. When I mentioned these 14 stocks, the reason was stated at the time: so everyone could study in peace. Buy them, store them—no effort, earning while learning. Unfortunately, I estimate everyone went in and out—probably very few held from the day this ID mentioned them to now.
999—maybe some people held from 6 yuan to now. 777 from 8+ yuan, 600432 from 20 yuan, 416 from 3 yuan to now—probably nobody. Others, even less worth mentioning.
缠中说禅 2007/4/25 21:54:56
[Anonymous] Your Appearance
2007-04-25 21:48:11
Boss, a question: does getting cost to zero mean the stock doubled and you sold half, or does it mean you scalped until the software shows zero cost?
With buy-then-sell, the software shows rising cost. Only sell-then-buy brings the displayed cost down.
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Achieving zero through scalping is best—that's the ultimate goal. Because nobody can predict whether a stock will definitely double or more. So the "wait for doubling" method isn't always practical. Of course, if it truly doubles and you can find better targets with the freed capital, naturally sell down to zero cost. If not, continue scalping without changing position—this is a capital utilization efficiency question. After achieving zero cost, the goal becomes accumulating shares—until a mega-level sell point appears.
缠中说禅 2007/4/25 21:58:58
[Anonymous] Infinite
2007-04-25 21:51:37
(Replying to the earlier question about appreciation and countermeasures)
==============================================
Thanks, boss, for replying.
Our little study group wants to ask: if you were the CSRC chairman, what do you think would be the right approach? (Can you be more specific? Thanks)
Thanks, boss. Our entire study group salutes you.
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At least up to now, the CSRC has performed the best. If even they couldn't hold firm, then the balance of interests among departments would have produced problems long ago. So to reach today's state, the Shandong man still deserves great praise. Even if they ultimately can't sustain it, they deserve understanding.
缠中说禅 2007/4/25 22:04:12
[Anonymous] Radish and Cabbage
2007-04-25 21:57:26
Chan master, please:
"From the bigger picture, the 5-minute hub extension starting from 04240931's 3689-3745 range—when it ends depends on whether a third buy or sell point forms in the next day or two."
I believe: the 5-minute hub from 04240931's 3689-3745 should be 0931-1025, right? Isn't that correct?
That's only one segment—how does it become a hub?
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That's the first segment. But this first segment is completely contained within the third segment, so the three-segment range equals the first segment's range. What this ID stated was the hub's range.
缠中说禅 2007/4/25 22:10:06
[Anonymous] Sina User
2007-04-25 22:04:11
Boss, hit a tricky problem.
002129—could you give an operational suggestion? Help with analysis.
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This is a classic hub oscillation—same situation as the current broad market. It's just a question of whether a third buy point or sell point emerges first. In hub oscillation, any departure from the hub that lacks sufficient force to escape its gravity will be pulled back. But you can operate accordingly. For specifics, see the previous hub oscillation lessons.
缠中说禅 2007/4/25 22:14:47
[Anonymous] Watching from the Sidelines
2007-04-25 22:08:40
Chan MM, if we compare the hub to a gravitational center, the only criterion for escaping gravity is exceeding escape velocity. The sole determinant of escape velocity is the gravitational center's mass. Does movement force resemble velocity? Can the hub's escape velocity be calculated?
Adding one more thought: in a standard trend a+A+b+B+c, by the divergence theorem, if c's force exceeds b's, a new hub C is born; if less than b, reversal occurs. Here, b's force seems like the benchmark for B's escape velocity?
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It can be calculated, but there's no need—otherwise you'd have to design your own program. Too troublesome. MACD works perfectly well. Also: "c's force greater than b's, therefore new hub C"—that doesn't necessarily produce a new hub. There's a special case: small-level transformation to a larger level. Of course, from a certain perspective, you could say a new hub is produced—but this hub ultimately overlaps with the original hub. Whereas in a true trend, a new hub at the same level absolutely cannot overlap with the previous one.
缠中说禅 2007/4/25 22:17:16
[Anonymous] Little Phoenix
2007-04-25 22:11:35
Queen, hello. I'm a beginner—how can I learn even a fraction of your skills? Where should I start? Thanks
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Start from the lessons. First get the recursive definition between hubs and movement types clear. Take it step by step.
缠中说禅 2007/4/25 22:19:06
[Anonymous] Asking About Funds
2007-04-25 22:17:03
Blogger, I don't have time to trade stocks! Is buying a fund good right now? What type to buy? Can you recommend a specific one so I don't have to think?
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Simplest: buy a fund directly positively correlated with the index. That way, at minimum you keep pace with the index. Of course, safest to buy after a relatively large-level correction.
缠中说禅 2007/4/25 22:20:55
[Anonymous] Your Appearance
2007-04-25 22:16:49
Boss, watching the match tonight?
I'm also staying up to watch—synchronizing with the boss, hehe.
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Of course. So this ID needs to go rest now.
Heading out. Goodbye.
缠中说禅 2007/4/25 9:06:54
Ugly Rooney defeated handsome Kaká; the English Premier League I like beat the Italian Serie A I dislike. That's how the world is.
Heading out. Will post the daily commentary at 3 PM. Goodbye.