When the Rhythm Feels Right, That's True Bliss
2007/11/14 15:17:22
Sorry, I'm out and about, so posts can't be guaranteed. Please forgive me. Market commentary will still be provided, but I can only speak quickly.
Yesterday I made it very clear: watch the 5-day moving average. Because yesterday happened to form a bottom fractal, so this afternoon, as soon as the index stood above the 5-day line, the market strongly launched upward. This is all extremely textbook movement—experience it well for yourself.
After the 1-minute bottom divergence from the past couple of days, what followed was a period of neutral trend. Everyone can look at this ID's lessons about why many people catch the bottom but can't hold on—it's because they don't understand how to handle neutral trends. More detailed analysis will have to wait until I'm back in Beijing to write lessons, but these past couple of days' movements have been very standard too—the standard version of the simplest trend within the concept. Please analyze it carefully.
Whether this ID's theory is useful or not—from the precise identification of the 1-minute divergence during this decline, to the comprehensive handling of this rebound—is a perfect example. This doesn't require any insider information from other channels. The charts tell you everything. Of course, the prerequisite is that you can actually read them—otherwise it's casting pearls before swine.
This ID gave the bulls a very clear script on how to use the 5-month moving average to set up a grand ambush against the bears. It seems the bulls, after a few days of unfamiliarity, have finally started performing somewhat decently—here's a big red flower for them.
The question now is whether 5,462 points can hold once recaptured. If it holds, there's room for an even larger rebound. Also, watch for futures news. If there's clear news on that front soon, then the index movement will have significant variables—meaning there's a possibility the index could hit new highs. But this is irrelevant to the vast majority of people.
For handling the rebound, if you want to be lazy about it, just watch for the end of this daily-level stroke's extension. If it has the power to extend to 10,000 points, this ID has no reason to object. When it runs out of power, this ID will take out what was bought these past days and start dumping—that's all there is to it.
As long as 5,462 is recaptured, whether it holds or not, a large hub will form. So oscillating within the hub, stirring things up, or even coming back for N rounds—it's still quite enjoyable.
On individual stocks, I've already stated clearly: they'll all get stepped on once. But if futures news comes out quickly, then the China-prefix stocks will still be the strongest. Actually, everyone should look at "China Donkey" (China Travel)—you'll know the direction. This donkey is always the smartest; whether in rallies or declines, when has it not led the broader market?
To feel good, you need the potential for feeling good. The most dangerous situation right now is actually this: those who didn't dare to move at the bottom, then after N days of rebound couldn't hold back any longer. From a rebound perspective, rebounds often mean a changing of the guard. This ID has nothing to do now but wait for the bulls to run out of steam, then hand the rifles to those waiting for a shift change.
So, rhythm comes first. When the rhythm feels right, that's true bliss. Regarding using 1-minute bottom divergence for bottom-fishing rebound operations, I've reminded everyone for N days now. Regardless of how you handled it, please reflect carefully—that's the only way to truly improve.
Signing off, goodbye.