Sector Rotation Right on Schedule

2007/10/9 15:26:41

Today, the sector rotation mentioned yesterday appeared right on schedule. Right now, both bulls and bears need this rotation to happen. For the bears, sectors flaring up everywhere is precisely a means to drain the bulls' energy. If all sectors rotate but none can sustain consecutive gains, that would be a powerful blow to bullish confidence.

Last night I already said, "When shorting begins, you often have to be even more bullish than the bulls." Light fires everywhere, and once the bulls' little bit of kindling is burned up—that's the first step of the shorting process. But bulls won't die all at once; they must be worn down through repeated thrashing. Today, technically speaking, a one-minute hub that didn't necessarily have to appear today did appear, and this gives the bears' game a platform to rely on.

Currently, what ultimately decides the outcome between bulls and bears is still policy. Because purely in terms of capital, there is absolutely no inevitable reason for the market to top out here or during this period. But the market is the result of combined forces, not the result of any single capital component, so looking at capital alone doesn't mean much.

On individual stocks, those that are due for their Shuijingfang moment will have their Shuijingfang moment. Of course, some stocks rising is purely to drain the bulls' energy—there are many subtleties here.

From a purely sentimental perspective, this ID very much hopes the market can cross 6,100 points, because this ID has a complex about it. The great bull market of '96 ended right at 6,100 points. Obviously, 6,100 points is nothing for this round's bull market, but whether policy this time gives the market enough time to see 6,100 once—this ID has no attachment to that.

For big capital to go short, there is actually no risk at all. This ID can lay all the cards on the table for you. If the expected policy developments don't materialize, and the expected resonance doesn't occur in the time-pressure zone around November, then at worst we just replay the game from earlier this year—a low-price revolution, and that's all there is to it.

Busy, logging off, goodbye.