Can the Bulls Build a Gradual Ascending Channel?

2008/1/19 10:31:53

Sorry, I was busy in meetings yesterday and had no time to analyze the market. Let me make up for it now.

Friday's market trend had already been discussed in Thursday's analysis — the oscillation amplitude was decreasing, awaiting the settling of news and sentiment. Friday was a standard box-shaped oscillation, closing high at the end. Since the break below 5209 points hasn't lasted the basic three-day minimum, as long as the market can reclaim it early next week, it'll be fine.

Now, let me tell you in the clearest possible language what lies ahead for the broader market. But this ID must still warn you: there will certainly be many people, especially those who learned Chinese from Kong the Man, who will end up falling into the well. This ID's language has always been as precise as mathematics — the key is whether you can understand it.

Right now, it's a 30-minute major oscillation. According to this ID's theory, in a 30-minute oscillation, the worst case can include a break below 4778 points — why? Such a simple theoretical question — don't ask why, go study the lessons.

Of course, for the bulls, they naturally don't want the worst scenario of a 30-minute oscillation. So for the bulls, the only way to neutralize this 30-minute oscillation is to create a gradual ascending channel.

Now, open the daily chart. Three of the four original anchor points for this ascending channel have already appeared. This current dip, if the bulls can maintain control, would complete the construction of the fourth anchor point. With four points — two above, two below — the channel is formed, and the game can continue along it.

The characteristic of this channel is that the slope is relatively gentle but the amplitude is relatively large. This way, it can generate corresponding market moves while having sufficient room to maneuver. It is currently the bulls' sole best option given the policy, news, and technical landscape.

Channel-style ascent is the least energy-consuming. With proper manipulation, costs can be shaken down to the minimum while maintaining a sound basic formation. Once a chance for liftoff appears, the price can break out of the channel and ultimately dig out a magnificent well that mesmerizes the masses, turning everyone tormented by the channel oscillation into frogs.

This ID has already laid out the cunning strategies, but this ID must declare: this ID is neither a bull nor a bear. This ID only acts according to its own theory, because once the bulls fail, only they themselves will be buried — at most, this ID will add a shovelful of earth on top.

However, for the sake of this year's bread, at the start of the year, this ID is spiritually supportive of the bulls — handling them gently for now, with the goal of fattening them up for heavier strikes later. Undoubtedly, this ID is happy to see the bulls' gradual ascending channel succeed, and will cheer from the sidelines.

But this ID has contingency plans for every scenario of the 30-minute oscillation. Once the bulls fail to show sufficient confidence, this ID will turn them into frogs to boil for porridge.

Not enough bread, so we can only drink frog porridge — how pitiful.

If you can't understand the text above, go demand a refund from Kong the Man — Kong the Man, what kind of Chinese did you teach?

But more importantly — even more important than hunting down Kong the Man — is to understand that once you've studied this ID's theory, you'll never again have such tedious notions of being a bull, bear, or fence-sitter. The market is just the market, the trend is just the trend — that's all. All you need to do is listen. Then, all possible trends and corresponding strategies will instantly rise in your mind, and then you simply play your cards as the market plays its — that's all.

The market is nothing more than a mahjong table. This weekend, go play.

Tomorrow evening, see you in Beijing.