The Decisive Battle for the Future of China's Stock Market

2007/7/9 15:35:37

The first objective of the decisive battle has been achieved today—using a movement more aggressive and of a lower level than the decline, the market has returned to the hub below the previous 3900-point area. As long as it returns to that hub, everything can be continued in the next installment. Both bulls and bears will have a breathing space to contemplate their next moves.

Since we are now in wartime, this ID's segment analysis should not be posted, lest the traitors and foreign invaders try to deduce this ID's intentions from it. But based on the principles of fractals, strokes, and segments that this ID has previously laid out, it's actually not difficult to figure out. Yesterday's "Brief Discussion of the Market's Long, Medium, and Short-Term Trends" already analyzed the market's long-, medium-, and short-term trends with perfect clarity using pure theory. Based on actual market movement, it's not hard to discover the result ultimately chosen by the convergence of forces.

This ID, as one of those forces, of course chooses the first path. Moreover, the triangle option is not something this ID only began discussing now—it was also the primary technical reason for entering last week. Of course, since this ID is currently "in the midst of the mountain," saying more is pointless.

Starting this afternoon, the traitors and foreign invaders began intensifying their counterattack. Tomorrow, this intensity will increase further, but all of this is within this ID's expectations. At worst, we'll just play another round of hub oscillation. From a pure chart perspective, the traitors and foreign invaders definitely do not want the current large head-and-shoulders bottom to ultimately hold—and that is the crux of the battle.

Regarding individual stocks, this ID's stocks are all medium-to-long-term positions. All were entered with sufficient fundamental and strategic reasons. Of course, for capital of this ID's scale, sometimes the stocks entered may not have clear fundamentals—but this ID may enter first and then reshape the fundamentals. For example, a stock recently entered near the annual moving average is currently only 7 or 8 yuan, but the product it's about to manufacture costs 30% less than Sany Heavy Industry's highest-profit flagship product, and production is about to begin. Sany is in big trouble this time. Normally such a stock would be excellent, but there are some very unclear factors in its fundamentals, which is why this stock should already be trading above 30 yuan by now. Because of these fundamental factors, this stock cannot be toyed with too aggressively. Whether these factors can be resolved, even this ID has no certainty—we can only take it step by step. So this kind of stock can only be this ID's private indulgence.

In short, stocks—these boy-toys—must be controlled in terms of cost. Don't chase highs. Those with skill must use oscillation trading to drive costs down to zero or even negative—that is the way to toy with stocks.

Too busy lately, no time to answer questions for everyone. Sorry. Signing off, see you next time.