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Brief Remarks on the Market's Long, Medium, and Short-Term Trends

2007/7/8 22:16:44

Market movements are the result of the composite force. The market doesn't belong to this ID alone, and the force on this ID's side cannot possibly be the composite force itself. Currently, market movement has three possible paths, each corresponding to different levels of required bullish energy, in descending order:

One. Triangle correction

This requires the greatest bullish energy. In terms of specific trend analysis, starting from the May 30th crash, the market completed the first three legs of a triangle and is currently in the fourth leg upward. For this to hold, the prerequisite is effectively breaking back above the 3919 neckline. Otherwise, without sufficient energy to reach that level, the triangle formation ultimately cannot materialize.

Two. Flat-type correction

Unable to firmly reclaim 3919, bearish energy gradually accumulates, and the market retests the 3400 low. The strongest flat-type can be completed above 3400. More typically, it would break below 3400 to form a bear trap, with the extreme position reaching around 2800.

Three. Large flat-type correction

In this scenario, the adjustment period significantly increases — meaning after the flat from the second scenario forms, a major rebound leg is followed by a renewed decline. The entire adjustment would target the two-year rally from the 1000-point level, with an extreme position potentially reaching around 2100.

The first two adjustments won't take too long — in the fastest scenario, the correction could complete within July. The latter scenario would last at least half a year. Note: any market movement is formed in the present moment. No god has decreed which type of adjustment must be chosen now. The market's ultimate path is the result of the composite force. So this ID's efforts last week were not in vain — the concept of a come-from-behind counterattack means using the most opportune moment to leverage a small force to alter the composite force, steering it toward a better outcome.

Of course, all component forces, no matter how powerful, are ultimately just component forces. Any component force that mistakes itself for the composite force has too much water in its brain. There is no savior or great star in this world, because no component force in existence is the composite force itself. Those who fancy themselves saviors or great stars, or who pray for saviors and great stars, all have waterlogged brains.

For ordinary retail investors, you only need to follow this ID's theory — follow the trajectory of the composite force itself. Some may wonder: if everyone follows the composite force and waits for the market to choose its direction, would the market still fluctuate? This is a typically waterlogged-brain thought. The market contains various different interests, and different interests constitute different component forces. There is never a shortage of different component forces at any time — unless the world no longer has divergent interests. But a world without divergent interests is at least not the current world.

Let's not mince words: fighting traitors, preventing the devils from dominating China's financial markets — this too is an interest, this too is an interest-driven motivation. That's why this ID exerted this component force last week — it's that simple. This interest is fundamentally opposed to the devils and traitors, so there must be battle. And in battle, no god guarantees who will definitely win. So this ID has already stated very clearly: this time is far more difficult than the live broadcast episode around the Spring Festival, but even with only a 1% chance, this ID would still fight. This has nothing to do with any technique — it's purely interest-driven, purely the interest of not wanting devils and traitors to run rampant.

But for retail investors, it's like civilians during a war — what business do ordinary civilians have fighting positional warfare on the front lines? If retail investors are going to fight, they can only fight guerrilla warfare. They cannot afford positional warfare, nor can they afford to lose at it. Retail investors are fundamentally different from someone like this ID. If this ID loses a positional battle, there's always guerrilla warfare to fall back on. And when the big opportunity arrives, this ID can recruit soldiers and horses at any time, find large amounts of new capital to launch a strategic counteroffensive. It's not that this ID looks down on retail investors — this is objective, realistic advice given based on different states of existence.

Therefore, for retail investors, which type of adjustment ultimately unfolds is not important at all. What matters most is using this ID's theory, buying at buy points and selling at sell points according to your own operational level, waging guerrilla warfare — that's what retail investors should be doing.

Of course, if you're a retail investor who lacks the courage for guerrilla warfare, then just be a law-abiding citizen — clear your positions completely, don't participate in market operations at all, and wait until the adjustment is over.

There's yet another option: just hold a full position without moving. After all, regardless of which type of adjustment occurs, it will eventually end, and a new rally will eventually begin. The foundation of China's great bull market hasn't changed one bit. The overly conservative conclusion of 30,000 points in 20 years still stands — in fact, it needs to be significantly revised upward to 40,000 or 50,000 points. As long as you hold stocks with great potential, these small fluctuations are nothing. For example, as this ID has told you all: near the annual moving average, stocks with the "China" prefix, major restructurings, whole-entity listings, and small-to-mid-cap growth stocks — any broad market adjustment merely provides a mid-to-long-term position-building opportunity.

For instance, that "China"-prefix stock of the Tang brothers — such a massive restructuring (you'll understand later, no need to elaborate now), such a deep-pocketed major shareholder background, such a perfect chart. Although this ID strongly dislikes the Tang brothers and deeply despises their intellectually feeble game-playing skills, this ID has still been trading this stock up and down recently. And for this kind of stock, even if you bought at 15.19 yuan, breaking even and making a fortune is just a matter of time, isn't it? The issue isn't at what price you bought, but whether you have the technical skill to bring your cost down — or, if you lack that skill, whether you have the patience and determination to hold. Otherwise, perpetually gripped by greed, anger, delusion, doubt, and pride, being a panic-stricken bird chasing rallies and killing dips — not even God's grandmother's grandmother can save you.

Note: this ID is merely giving an example. This ID hasn't been trading only this stock up and down recently. More importantly, it's not only the stocks this ID trades that are good stocks. Others with big buy points, big themes, and big backgrounds all deserve close mid-to-long-term attention. But the most important thing is still your technique and mentality. If it's lousy technique plus a lousy mentality, any stock becomes a lousy stock.

Stocks are waste paper — play them poorly and the stocks extract your blood, not the other way around. But from the perspective of national financial strategy, stocks are critical chips for safeguarding national financial security — lightsabers in a virtual war. These two perspectives arise from two different vantage points for observing stocks — neither is right or wrong. What matters is your strength and position. Only by clearly understanding your own strength and position can you adopt appropriately suited operations. No single operation is suitable for everyone.

Alright, it's too late. Signing off first, see you tomorrow.