The Ambushed Bulls—Can They Still Eat?

2008/1/21 15:18:54

Just got done being ambushed by Citigroup, and over the weekend were ambushed yet again by Ping An Insurance. The bulls have absolutely no room to maneuver, at least on the index level. Technically, as stated before, if 5209 points cannot be recaptured, there will be a second bottom test, continuing until a daily bottom fractal appears. And during a 30-minute oscillation, 4778 points can absolutely be broken in the worst case. The ambushed bulls' failure to hold above 5209 at today's opening means the subsequent trend can only choose from the worst options.

From this ID's standpoint, this kind of issue is not of great concern. What this ID has been most concerned about recently has now found answers. You should remember that at the end of last year, this ID harshly criticized certain people who, for certain reasons, were trying to rush the so-called stock index futures through before year-end. Now the facts are out—that attempt has gone bankrupt, and the capital that trailed along not only missed a major wave of individual stock opportunities but finally couldn't hold on any longer and fled in retreat.

This is exactly the outcome this ID most wanted to see. Stocks are far more than just a few curves on a chart. For retail investors, of course you only need to look at the curves. But the sword-fighting and scheming behind them—how much of that can you know?

Big capital—only killing big capital is satisfying. Those capitals that spend all day eyeing retail investors aren't worth a damn.

This ID's view has always been crystal clear: let everything rot together in A-shares. This ID's only wish has always been one thing—turn A-shares into the world's largest mahjong table belonging to the Chinese people, making foreign invaders scramble to catch up. Anything that goes against this goal, this ID will do everything possible to intercept—for example, that idiotic Hong Kong Stock Connect scheme from before.

Back to today's market: Ping An that isn't actually "ping an" (peaceful), PetroChina turned into a waterfall—the big heavyweights certainly have their uses. Once certain people completely surrender, the big heavyweights will be useful. And if they don't surrender? Then think about this ID's dinner-table story about PetroChina. Let me spell it out: if they don't surrender, the numbers in that story can be revised.

Enough stories—let's talk technique. By purely technical analysis, from 5522 points downward, according to this ID's theory, after the line segment decline ends, the mid-yin movement forms a 1-minute hub. The worst case is that this hub is the first hub of a 1-minute decline—if so, this decline has a long way to go, and at minimum one must wait for the 1-minute decline's divergence before it's over. The other possibility is that it first expands into a 5-minute hub, because within a 30-minute level oscillation, the maximum sub-level can only be 5-minute. Therefore, once that 5-minute hub forms, the worst case is that it's the first hub of a 5-minute decline. Whether the subsequent hub is 1-minute or 5-minute, a third-type buy point must emerge before the downward pressure is truly escaped.

In reality, since this afternoon the third-type sell point of that 1-minute hub has already been manufactured (at what position and time—a simple quiz. If you couldn't give the correct answer immediately at the time, you need remedial study). Therefore, the best case going forward is an expansion into a 5-minute hub, and the possibility of a 1-minute decline forming is absolutely not small.

With such clear theoretical classification, subsequent operations are very simple. If you don't want to bother, just wait until a daily bottom fractal forms before doing anything. If you love short-term stock-swapping, then arrange your specific operations based on this hub's evolution. It's that simple. The only slight complexity is that you're operating specific stocks—the index is the index, stocks are stocks, and they are never always the same thing. So pay more attention to your own stocks, the specific trends in your stock pool. For example, even with today's market action, there were still stocks hitting new highs.

Attention—serious attention—no stock is worth chasing at high prices. This ID doesn't need any retail investors to carry sedan chairs either. There is no stock that rises forever. When a stock has risen a lot, it needs to rest. Those with skill can still oscillation-trade out profits during the rest. Those without skill should take out their principal once a stock has risen substantially.

For any stock you hold, the most basic standard for maintaining a position is being able to eat and sleep normally. If holding a stock has begun to affect your sleep and meals, please exit immediately.

Stocks, to put it plainly, can be summed up in just four characters: level and rhythm. Understand this and you'll eat large chunks of meat, drink big bowls of wine, enjoy wonderful times every day, and play the 419 game daily. Otherwise, your rhythm will be played by the stock.

On the medium term—the ambushed bulls, can they still eat? This ID already explicitly stated in last year's annual analysis that there is a very real possibility this year won't make a new high above 6124 points. But this year is not an index-driven market; it's a sector-driven market. This was already clearly stated in that post. Even if the index doesn't make a new high, there are still countless opportunities waiting—the key is whether you have the technique and mindset for it.

Ride fewer elevators, practice more technique. The simplest move: exit when you see a daily top fractal, come back when you see a daily bottom fractal. Master this one move, and you can avoid many elevator rides this year.

Once again, let me state this ID's three wishes for this year: I want to see the ChiNext board (Growth Enterprise Board), I don't want to see stock index futures, and stamp duty must be lowered. Regardless of how things go, I hope all three can be realized.

Signing off, see you next time.