Adjustment Pattern Holds, Consolidation Intensity Increases

2007/11/2 15:25:06

Today's trend was equally textbook-perfect, so I've copied the chart — study it carefully. For the 1-minute hub of segments 189–192, segment 195 is the third sell point. But for the line segment-type decline starting from 191, segments 194–195 form the second type-hub, so the subsequent break below lacked conviction and showed obvious divergence, which then necessarily produces a new 1-minute hub at this position.

The subsequent trend is straightforward: whether this new 1-minute hub continues to extend downward into a new 1-minute downtrend — in other words, whether this 1-minute hub produces a third sell point. From the bigger picture, the adjustment of this rebound will expand to at least the 5-minute level.

Of course, operationally, the third sell point of the first hub is the last chance to exit at that level — anything after that is meaningless. That is to say, for avoiding this adjustment: 191 is the first sell point, because the preceding line segment-type uptrend showed type-divergence; 193 is the second sell point, because from the line segment perspective, it is the second sell point. From the perspective of the 1-minute hub consolidation of 189–192, any sub-level departure will first constitute a sell point, and then one considers whether a pullback forms a third buy point for re-entry — this is the operational method for hub consolidation.

After 195, with respect to this adjustment, any selling is too late — it means you could face the end of the downtrend at any moment. Many people like to wait until the second hub before considering the third sell point, but that is late upon late, so it's not surprising at all that they often sell only to be squeezed by a reversal. Of course, it's entirely possible that selling is followed by a continued decline, but that's already a probability issue, not a technical matter that can be 100% guaranteed by theory.

Alright, enough of the technical lessons. Today's market, influenced by overseas factors, performed not too badly. Most importantly, rumors about a weekend interest rate hike are also circulating everywhere, putting psychological pressure on the market. But next week, whether or not there's a rate hike, the real protagonist will be PetroChina. If that stock opens excessively high and produces a particularly ugly trend, it will have a significant impact on the market. Additionally, quite a few funds fled today, waiting to speculate wildly on oil. Next week, let's see whether this grand drama turns out to be comedy, tragedy, or farce.

Weekend — rest well. Next week, we go to watch the show. Whether you become a member of the cast depends on your own ability. Don't force it — forcing things brings no happiness.