4391 Points Determines Short-Term Direction
2008/2/27 15:19:36
As stated yesterday, if today didn't make a new low and surged above 4331, it would constitute a bottom fractal. Today's move was obliging enough to reach this most basic target. However, strictly speaking, this is not the strongest move, because the upper edge of the entire bottom fractal is at 4391 points—the day before yesterday's high. The strongest move would have been to attack directly above that point today.
Because the formation of a bottom fractal does not necessarily mean the upward move will extend into a stroke—the key is to hold above the upper edge of the entire bottom fractal. That's the technical crux. The previous failures at 4818 and 4672 to extend into strokes were precisely for this reason. Therefore, 4391 becomes the most critical short-term level.
Since the market chose what we considered the most likely second medium-term scenario (the first cannot be entirely ruled out), further changes in MACD can sketch the possible medium-term evolution:
- Since today's MACD green bars started shortening, the best scenario is for them to turn red again and create bars taller than the previous ones. In this case, the MACD's fast and slow lines would at least return to near the zero axis.
Note: all genuine moves require the MACD's fast and slow lines to return to the zero axis. Once they hold above zero, the move will unfold. This is the best scenario.
- The green bars lengthen again, or briefly turn red before turning green again.
This scenario corresponds to continued bottom oscillation.
Currently, the medium-term neckline is around 4700 points. Let me give everyone the clearest technical picture: if the MACD's fast and slow lines can return to the zero axis while the market returns to the neckline and holds, then a breakout becomes inevitable. Of course, completing this technical picture requires cooperation from multiple fronts. Operationally, there's no need to be distracted by this—as long as the neckline isn't effectively broken through, you can continue operating based on 30-minute oscillations.
Note: the reason for using MACD to describe this is mainly that this indicator is visible to everyone and intuitive. It's not because MACD is anything special. If you have some grasp of this ID's theory, none of this is necessary at all.
This ID explicitly pointed out the 1-minute bottom divergence the day before yesterday. Yesterday's textbook move—if you couldn't even grasp that, you face two choices: 1. You don't need to come here anymore; wait until the market has toyed with you N more times before reconsidering. 2. Study hard—this is the most basic skill. If you can't even grasp this, what better method is there besides studying and continuing to practice?
For those who entered according to the theory yesterday, today's operations were actually discussed long ago in Lesson 100 of the course. Because afterward, you face only two situations: 1. The 1-minute rebound constitutes a third-type sell point at the 5-minute level. 2. The 1-minute rebound doesn't constitute a third-type sell point at the 5-minute level. In either case, it corresponds to a 1-minute trend type. The only thing the market needs to confirm is whether this type is consolidation or an uptrend.
Today's move formed the first 1-minute hub around the 4331 level. Therefore, what follows is this hub's evolution. Once this hub forms a third-type buy point, the probability of forming an uptrend and returning to the original 5-minute oscillation becomes extremely high.
Operationally, it's very simple—you don't need to panic and sell. You can make your decision based on the evolution of this hub. Of course, if you're extremely timid, the most conservative approach is to sell half after the line-segment-type divergence that occurred after the afternoon open. Why? Because line-segment-type divergence inevitably leads to the formation of a 1-minute hub, meaning you don't want to participate fully in this 1-minute oscillation—wait for subsequent moves to confirm before deciding.
Of course, for those with good composure, this isn't necessary. If you can't even handle 1-minute oscillation, how are you going to trade stocks? However, for those with a certain level of skill, you can actually use that line-segment divergence for stock-switching operations—this is the most efficient play, but the skill requirement is higher and not everyone can achieve it.
This ID's theory provides the most explicit and precise operational guidance—there's nothing ambiguous about it. The key is your mentality and ability. Match your mentality and ability to the appropriate activities. But the prerequisite is that you must thoroughly understand the basic operations and analysis.
For individual stocks, still the same line: making sector rotation work is the way—otherwise, the market's momentum will face major problems.
Signing off, goodbye.
缠中说禅 2008/2/27 19:25:45
Keep studying.