Pullback Confirmation of 5010 Points

2007/12/6 15:17:59

Today, as stated yesterday, the entire day was a pullback confirmation of 5010 points. In fact, anyone who's meticulous enough would know that the sudden break below 5010 this afternoon was a classic small bear trap.

Let me take this opportunity to give a quick lesson. As mentioned before, if you understand traps, your technical skill level will improve significantly. What is a trap? Traps must originate from a hub. So-called traps, at their root, are all the result of hub oscillations. If it's not a hub oscillation but a hub migration, then it can't be a trap — it means you've genuinely fallen in.

This morning, the opening gap-up followed by a line segment pullback, then another line segment upward — according to the principle that trends must be completed, a 1-minute hub must exist at that position. With the approximate location of this hub established, the possibility of manufacturing a trap arises. Generally, these small traps are used to create intraday highs and lows. Typically, they deliberately break through a certain level — for example, today it was the low of the first declining segment — but as soon as you compare the strength of this breaking stroke with the previous stroke, you know it's definitely a trap.

The most critical distinction between a trap and a non-trap, besides whether it's a hub oscillation, is the comparison of force between the before and after — this requires thorough study. Only when you've truly understood it and made it into your own intuition will it be genuinely useful.

Enough about technicals. Since tomorrow is the weekend, let's see how strong the usual weekend psychological effect will be. As long as the market can hold above 5010 both tomorrow and starting Monday, the trend is fine.

The greatest psychological significance of lingering at this position is to give wavering people time for psychological transformation, winning over more people. A rebound rally is a process of gradually drawing people in — it can't be a process where the main players pull the market up all the way by themselves. In plain terms, executing a rebound means gradually nudging it up: at each new level, wait until enough people accept it, then nudge it a bit higher. When acceptance starts declining or conditions change, suddenly pull the rug — this is the only way for the main players to exit with their skins intact. Otherwise, if the main players are pulling it up all by themselves, isn't that suicidal?

Those whose technical skills aren't up to par should just keep watching the 5-day moving average.

Signing off, see you later.