Breaking the Upper Rail, Rebound Space Opens as Expected

2007/10/30 15:26:44

As said yesterday, after breaking through the upper rail of the descending channel, rebound space has opened. Today's movement was extremely textbook. The afternoon plunge was precisely the pullback after breaking the upper rail. If you can't even understand this most basic technical language, you need to go back and study.

From the perspective of this ID's theory, this morning's dip into the green and yesterday's late session together formed a 1-minute hub. The afternoon plunge precisely constituted the third-type buy point of that hub. In other words, the afternoon plunge carried a dual technical meaning.

The current trend is very simple. As long as there's no return to this 1-minute hub and a new hub forms above it, then the rebound's level is at least no smaller than a 1-minute uptrend. This makes operation extremely simple — just patiently wait for divergence to appear.

The overall short-term rhythm was already stated very clearly by this ID last Friday in "5555 Points Held, Rebound Brewing 2007-10-26 15:13:40": after the 5555 neckline stabilizes, the rebound extends at least until around the time PetroChina's subscription funds are unfrozen. Even in the worst-case scenario, these funds must first be lured in — otherwise it would be too disrespectful of the enthusiasm behind these 3 trillion yuan.

For the medium-term trend, this ID has already stated very clearly: if futures come out, then point levels become meaningless. Even 6100 points wouldn't be a big deal — at that point there's only frenzy, no talk of levels. But if futures get blocked and can't come out, then 6100 points is naturally still a level, and this rebound would merely form the second peak of a topping pattern. Whether this peak is higher or lower than the previous high doesn't matter much — for example, a double top would mean a lower peak; a head-and-shoulders top would mean a higher peak. Neither makes much difference.

Regardless of the final topping pattern, 5555 points is the lifeline. As long as it's not effectively broken, the pattern isn't complete, and there's potential for it to become a continuation pattern. Otherwise, the topping pattern is confirmed and a medium-term correction is established. Currently, the only variable is the timing of the futures.

Regarding futures, this ID has also been very clear: this ID does not want to see them come out, especially now. Because doing so would exhaust whatever energy China's capital market has left, and the subsequent correction would be no child's play. Right now, the wrangling over this matter still can't be said to be completely settled. Some things can change on the very last night — until the final moment, the efforts outside the market won't be abandoned.

As for those currently spouting nonsense, they're not the ones who can make the final call. This ID doesn't even bother reading their drivel.

Of course, public opinion is currently being manufactured, and a group of interests is shilling for their own benefit. This matter comes down to the wisdom of the final moment. But let this ID drop a harsh word here: please don't repeat the 327 or 319 incidents. Whoever makes the call bears the responsibility. This political and economic responsibility can't just be brushed away with a wave of the hand.

Additionally, this ID must say: all those shilling for this — please first state clearly: if something goes wrong, are you responsible? If this wrecks the capital market and the economy, are you responsible? If not — shilling for fame and profit — this is not something Chinese people should be doing.

Now, from this ID's standpoint, it's simple: rebound when it's time to rebound, go crazy when it's time to go crazy. Before 5555 breaks, engage in large-scale swing trading to bleed the market. And outside the market, the necessary efforts will definitely not be spared. Whatever the final outcome, as long as the heart was in it and the effort was put in, this ID has no regrets.

But I believe the regulators have sufficient awareness of the risk at current levels. Once the market enters a state that cannot self-regulate, the regulators will certainly not stand idly by.

Alright, it's been truly busy lately. I have a business trip tomorrow and still lots to handle. Heading out now, goodbye.