Tomorrow Faces Upper Channel Resistance on the Downward Flat Channel

2007/10/29 15:25:18

The rebound after holding 5555 points — all within expectations, as stated earlier. Tomorrow faces resistance from the upper rail of the descending channel. That's the technical view. On fundamentals, if index futures launch, point levels become meaningless — especially when a long-short showdown forms. At that point, the only concern is how to blow up the other side. If squeezing to 100,000 points is what it takes to crush the shorts, then of course that's exactly how it'll be played.

Futures have always been a life-or-death struggle — there's no mercy to speak of. Holding the corresponding chips means holding the market's voice. Having that voice matters more than anything.

Tomorrow, once the upper rail resistance is breached, the rebound space will be blown wide open. Of course, back-and-forth at this level would also be perfectly natural. Since massive amounts of capital are frozen in IPO subscriptions, in the absence of any news, this rebound won't end easily.

If futures are launched within the year, then 6100 points obviously won't be any kind of barrier — this is currently the market's biggest wildcard. But regardless of where the trend takes us, it's actually irrelevant to most people, because the stocks truly rising will basically still be the index heavyweights. Other stocks — most can only continue their temporary rebound followed by further decline, at best maintaining a consolidation pattern, with no big moves to speak of.

However, in the short term, oversold stock rebounds still offer some opportunities, though the risks are equally large. As for "China-prefix" stocks, with the futures umbrella as protection, they can naturally be as crazy as they want.

After futures launch, divergence among individual stocks will continue to intensify. Retail investors' survival space will shrink further. That's just how things are. When the sky is about to rain, find your own umbrella.