The Market Sparkles Again

2008/1/16 15:17:40

Yesterday I said "it's not out of the question that there will be a day or two for everyone to be reminded of the sparkle again," and sure enough, today Citigroup's ginseng ran a big advertisement, making the market sparkle once more. Strongly suspect that the sparkle is secretly acting as a sales agent for Citigroup ginseng.

China Investment Corporation — wasn't it swaggering around not long ago, bottom-fishing on this equity and that equity? Now that Citigroup ginseng has arrived, is CIC going to stuff another hundred-something billion in there to plug holes and fill numbers?

What China should be doing, this ID laid out clearly N years ago in "RMB and Currency Wars." Chinese people have absolutely no need to play on American turf. If China is going to rot, it should rot in its own pot. Create a market for the whole world ourselves — others can come or not. We'll just play among ourselves and starve them out. Do 1.3 billion Chinese really need to invite 300 million American devils over before they can sit down for a mahjong game? Or even sail across the ocean to set up a mahjong table in New York? Ridiculous!

Of course, if today you treated the stocks this ID mentioned as your watchlist and didn't look at the index, then today many shamelessly flashed red, and quite a few even more shamelessly hit new highs — absolutely nothing to do with American devils. However, if this kind of situation extends too far, it's not good. Straying too far from the index isn't desirable either, so let's discuss the index below.

Clearly, today's trend is no big deal for the bulls — in fact, it's exactly what the bulls are happy to see. The reason was already explained yesterday. Technically, today's gap has extremely strong technical significance. If it is not closed within three days, the pressure on the market going forward will further intensify. The key below is the neckline level at 5209 points — as long as this level is not effectively broken, the market remains under the bulls' control.

In the short term, the line segment-type decline from 5522 points has been highly technical, with two type-hubs clearly visible. Now it's a question of type-divergence in this decline. Once it appears, there will be a powerful rebound. The key is whether this rebound can break free from the constraint of the second type-hub. If not, then closing the gap will be difficult — and that's the technical crux.

On the daily chart, after yesterday's top fractal, the possibility of it extending into a stroke is now very high. As long as tomorrow produces a new low, it's basically confirmed. So from a conservative standpoint, one should wait for a bottom fractal before there's a real possibility of stabilization. Therefore, whether this type-divergence can ultimately produce a bottom fractal is the key to further observation.

On individual stocks, many will continue to perform. Of course, if you feel your heart can't take it, you can first pull out your principal — for instance, with stocks like 600737 — and leave the profits inside to continue riding. Some stocks will rally until you don't believe it, and once you believe it, that's the well.

I need to take a trip — going to Shenzhen for a PE-related shareholder meeting. Over the next few days, I may not be able to guarantee evening posts, but market analysis will still be guaranteed.

Signing off. See you.