The Power of 3613 Points Fully Displayed

2008/4/9 15:16:57

Today's price action was extremely technical. As clearly stated before, failure to hold 3613 points means another probe to the bottom. After today's gap-down open, the 60-minute chart broke precisely below the lower edge of the top fractal. This morning's textbook pullback attempt obviously couldn't reach 3613 points, thereby confirming that the break below the lower edge of this top fractal was valid. The subsequent decline was therefore a foregone conclusion. Why? Because a downward stroke needed to form.

The current price action is very clear: after an upward stroke, a downward stroke correction is forming — the kind with maximum intensity. Therefore, it's not suitable to re-enter until the downward stroke completes. But once the downward stroke finishes, there'll be another excellent short-term trading opportunity.

Everyone — did you see? Using just a simple 60-minute fractal structure and whether it extends into a stroke, we can completely grasp this kind of price action and the corresponding exit. Now, we simply need to wait for a new buy point to appear. It's that simple.

On individual stocks, as clearly stated yesterday, if real estate can't re-launch, there'll be problems. Today's price action in Vanke and others — a textbook short-term bull trap — naturally triggered a pullback. Perfectly normal.

Of course, even if there's a real move coming, it would still need a major washout. But whether it's a washout or a continued decline — that actually doesn't matter at all. We only care about the next buy point. Dissect the price action and trade accordingly — we don't waste brainpower on the rest.

Let those with water in their brains keep debating whether there's a real rally coming. They can handle the debating; we'll handle the money-making. And for those with energy to spare, tonight we'll continue burning the midnight oil watching football.

Signing off, goodbye.