Skip to main content

5462 Points: The Expected Significant Oscillation

2008/1/8 15:21:47

Yesterday it was already stated that "it's perfectly normal to see a fairly forceful oscillation this week, after all, the so-called double-top neckline at 5462 points from the 6124 decline is right in front of us." This morning's gap-up and the afternoon's line-segment-type top divergence naturally formed the inevitable shakeout following the first assault on 5462 points.

This ID also said yesterday: "A little oscillation shakes the cobwebs loose." After today's close, every pore of those who've been shaken is probably overflowing with pleasure as relentless as the river's flow that drowns the bell whose ring jingles when we were young in May when the scenery was charming as ants and the moon like a blade slicing face as the saying goes this here place is reeeeeal nice.

In fact, these moves are ultra-technical, and 5462 points is an ultra-technical level. Some oscillation around this level is not only inevitable but necessary. The only two questions going forward are: the form of the oscillation and the possible outcome.

Class is in session. (This classroom has free entry and exit, absolutely no roll call—especially no locking-the-door roll call. Those who openly leave class will absolutely not be beaten. Everyone is free to whisper, dance around, flirt, eat grapes without spitting out the skins, or not eat grapes but spit out the skins anyway.)

Regardless of the situation, we can first give a very textbook-like complete classification of oscillation forms, ranked by strength, with corresponding outcomes:

  1. If the market holds near today's gap, then the 1-minute uptrend from the 5200-level 5-minute move is formed. After this 1-minute uptrend ends, it corresponds to the third-type buy point for that 5-minute level. Then there's a very high probability of forming a 5-minute uptrend from 4800. At worst, it's just a large 30-minute hub.

  2. If the market holds at the 1-minute hub around 5360, then the 1-minute departure from the original 5-minute hub is merely a consolidation type. If it then holds and forms a third-type buy point, the chance of forming a large 5-minute hub is greater. Of course, there's also the possibility of a breakout surge continuing the hub upshift to form a 5-minute hub at a higher position, but generally speaking, a third-type buy point from a sub-level offset of a consolidation type is never that exciting.

  3. If it falls back to the 5-minute hub above 5200 before holding, then there's nothing to say—a large 30-minute hub forms right here.

So, from pure classification analysis, regardless of scenario, except for the strongest version where 1-minute hubs keep moving up, all others will face the formation of at least a 5-minute hub, and at worst a 30-minute hub. The only thing needing confirmation is whether this hub oscillation is positioned at the high end or the low end—which has essentially no impact on operations.

In practice, the market quickly eliminated the first scenario today, so you just need to match the second and third scenarios against reality.

The above merely demonstrates the analytical thought process for everyone. In actual practice, these classifications and judgments should be pre-programmed to flash in your mind within one second. With such a complete classification of pre-planned operations, what is there to fear?

Oscillation is a good thing—especially for the nimble and technically skilled. Ideally it'd oscillate a thousand times so that 3,000% profit naturally emerges. Of course, for those with poor technique, oscillation means riding the elevator—going up and down for the experience. For those with even worse mentality, oscillation is a nightmare—getting slapped left and right.

Figure out which category you belong to—please take your seat accordingly.

Note, this ID's posts cater to all levels. Some things are said for the high-level crowd: matters like buy/sell points, divergence, oscillation operations, stock rotation, sector rotation, and the like. Other things are for those without time or slow short-term reflexes: things like weekly top fractals, the 5-week MA, holding and sleeping. So please take your corresponding seat—not every operation style suits every person.

Don't say this ID hasn't been writing many lessons recently. The sparring value of the daily market commentary should not be underestimated. As for formal lessons, writing requires being in the mood. This ID has recently been in the mood to accompany everyone in reading history. Stocks can serve as sparring practice for now.

Stocks—you can spar with anything, just don't get trapped.

Signing off, goodbye.