Technicals and Psychology Trigger Oscillation

2007/9/4 15:12:24

I have a meeting at Guomao at 4 o'clock, so I can only say a couple of things as fast as possible. Today's oscillation was, technically speaking, caused by yesterday's gap—this was already stated clearly. Psychologically, with risk-warning articles appearing in the newspapers every day recently, how could there not be psychological pressure?

Whether this oscillation intensifies tomorrow actually doesn't matter. From a purely technical standpoint, if the gap gets filled and there's no strong pullback rally afterward, then short-term problems become serious. Therefore, the less the gap gets filled, the less technical pressure there is—this is called the strong stay strong. Once the strong can no longer stay strong, a larger-scale correction becomes inevitable. So technically, the stronger it runs, the less you need to worry; once signs of weakness appear, that's precisely when short-term caution is needed.

On individual stocks, some people might curse PetroChina and China Unicom today. These people have zero conscience. Without PetroChina and Unicom, whether the 3,600-level turnaround could have happened at all was questionable. These two have contributed more than enough for the broader market recently, staying still and contracting the entire time. Not even letting them move now—if the knife comes down and there's not even room for a bounce, that would truly make them Lei Fengs.

Can't afford more idle chat. I'll post the chart tomorrow. After this afternoon's meeting, I have a PE project contract to negotiate tonight, so I might be very late.

Sorry, heading out first. Goodbye.