If You Eat Salted Fish, Be Ready for the Thirst

2007/9/3 15:38:43

A trip to Guangdong always teaches you some quirky Chinese expressions, like today's title. The meaning of this saying, applied to today's market participants, couldn't be more apt.

Today's broader market, as discussed last Friday: with no news of sufficient weight over the weekend, bullish energy erupted as expected. But today brought an interesting phenomenon—the market lingered below 5330 for a long time, refusing to go up. Why? Because the memory of what was left behind above 4330 remains too vivid.

Now, every day is essentially a bet—betting that no significant news will come out that evening. The key issue is that the confidentiality of policy decisions has exceeded most people's imagination. Otherwise, how could May 29th possibly have been the highest close? Thus, the biggest contradiction shaping current price action is the tension between still-strong market energy and the fear of sudden news.

In this situation, one must embrace the spirit of "if you eat salted fish, be ready for the thirst." Go hard or go home—charge until the news breaks. When the real deal drops, smash without mercy and see who's tougher. Even during the 530 crash, plenty of individual stocks were still in the green that morning. The key is to never hesitate when it's time to sell. Only then do you earn the right to keep being reckless. Otherwise, step aside and watch.

Recklessness requires qualification. Without the temperament, without the technique, don't be reckless. Earth is too dangerous—go back to Mars. And the current recklessness is proceeding entirely according to script: second- and third-tier stocks are dancing wildly. Some people clamor that they'd rather have a blue-chip bubble than let second- and third-tier stocks move—that's textbook water-in-the-brain thinking. Reality has already punished these people harshly enough.

From a pure technical standpoint, today's gap creates a short-term oscillation risk, and therefore the technical significance of this gap must be taken seriously in the short term.

For individual stocks, one can fully focus on the significance of the technical chart. Using stocks this ID holds as examples:

The first category, like 600636, belongs to the weakest stocks—still hasn't gotten back above the half-year line. The task for such stocks is to first hold above the half-year line and then expand from there. Specifically for this stock, there are no fundamental problems—it's just that there are too many mixed players inside.

The second category, like 600737—just broke through the first rebound high after May 30th a few days ago, then pulled back. This holds the same significance for other stocks. The task for this category is to stabilize at that level through oscillation, and only then will it go challenge the May 30th highs.

The third category, like 000938—oscillation after breaking through the May 30th high is perfectly normal. For this category, whether the short-term rally can continue depends critically on whether the May 30th high can hold firm after the oscillation.

For catch-up second- and third-tier stocks, these are the only three categories. Therefore, you can handle them with appropriate short-term strategies based on specific conditions. If you can't figure it out or don't have time for short-term trading, just use the 5-day or 5-week line for entries and exits—that's the laziest method for short- to medium-term operations. Generally, when oscillation occurs at resistance levels, you can exit on the rally and buy back on the dip, using the hub oscillation method. If you lack the judgment and skill for that, forget it.

Additionally, unless your technique is particularly advanced, frequent trading is not recommended at this time, because nobody can guarantee that what you buy today won't be hit by terrible news that very evening. For those with exceptional mindset and technique, of course it doesn't matter—if real news hits, one slash and it's done. But ordinary people don't have that kind of mentality.

One must pay attention: long-term entry must occur at a long-term buy point. Entering at a short-term buy point and trying to hold long-term is an absolute violation of this ID's theory. Entry at a short-term buy point only implies short-term trading, unless you have the strongest possible will and can sit through any prison sentence to the end. Otherwise, don't play this game.

What this ID says is what it is. For example, the current broader market movement is acceptable to this ID. But if the broader market quickly breaks through the 3/4 line and continues rapidly rising to construct a bull trap, then even without policy intervention, this ID will absolutely show no mercy. The recent Chalco play was just a drill. The purpose of this Chalco drill was fully achieved—it successfully enabled the complete switch to second- and third-tier stocks. Starting tomorrow, every man for himself.

The afternoon and evening are reserved for PE. No choice. Logging off now. See you.