In the Stock Market, Not Using Your Brain Is a Dead End

2007/6/22 8:30:44

Since I need to leave for a business trip after the market close today — first stop Hunan, then several more provinces — I won't be writing anything new. It's been quite lively here lately, with what seems like a record 100,000 daily transaction volume, which is a bit abnormal. With so many newcomers, it's probably time for another risk education session. "In the Stock Market, Not Using Your Brain Is a Dead End" — this title applies to all risk markets, not just the stock market. Life itself, for example, is one big risk market.

But this world is full of people who don't use their brains. Their mentality is: find some so-called prophet or God, then ride his power straight up to heaven. That's why in the stock market, so-called stock commentators and hot stock tips are everywhere — the people who sustain them are precisely these brainless ones. Yet no stock commentator or hot stock tipster in this world has ever become a truly successful market participant, let alone those who follow them without thinking.

Everything must be processed through your own brain. Even this ID's theory — you must put it through your own brain and judge with your own mind. If some people's level is still too Kong-the-Man for now, they can perfectly well keep a respectful distance from this ID's theory. Or they don't have to be respectful at all — they can even curse freely, for instance saying something very Kong-the-Man-ish like: "By the time I reached your level in stock trading, your entire family wasn't even born yet! How dare you lecture me about stocks? Shameless!" The correctness of this ID's theory doesn't depend on how many people believe in it, just as even if nobody believed Fermat's Last Theorem was correct, the theorem would still be correct. Regarding its proof — few people can understand it, but right is right. Nothing changes.

When studying anything, you must get to the very bottom of it. If you still have doubts, how could you possibly operate with effortless skill? Especially with a theory as highly practical as this ID's — without thorough understanding, how could you possibly spar with the trend itself? Of course, nobody is obligated to study this ID's theory, and this ID has always suggested: if you still have questions about understanding this ID's theory, don't use it to trade, especially not for operations at very small levels. That said, this ID's theory has many facets, and if you truly understand one aspect — for example, same-level decomposition — you can trade based on that, provided you truly understand it.

This ID's blog is not a stock commentary, and there are no hot stock picks here. The stocks this ID discusses here are all ones this ID actually trades, and when this ID mentions them, it's basically the same time this ID is buying. The kind of activity where you buy first then talk — this ID has zero interest in that. Why? Because once you've mastered this ID's theory, buying any stock at any price is really not a problem. Through oscillation, through continuous price differentials, this ID can always get the cost to zero — it's just a matter of time.

This ID's trading style has become quite gentle these days. Years ago, it was a different story. For example, there was a stock from the Northeast — this ID was grabbing shares, from 9 yuan all the way up to 26 yuan, then launched massive oscillations. Multiple players were fighting inside, and costs were dramatically reduced. Finally pushed it up to 38 yuan and it plunged like a cascade — the whole thing took only a few months. That was just a small matter this ID handled once. That time, retail investors were basically irrelevant — who told you stocks must have retail participation to be fun?

Everyone who started coming here since late last year knows: the first stock this ID mentioned here was 000999. That was around December 20, priced at 6 yuan, and this ID entered at the same time. Later, 000416 at 3 yuan, 600635 at 5 yuan, 600777 at 4 yuan, and so on. When this ID mentioned them, that was when this ID started buying. So the timing and cost of this ID's stock holdings are completely public. But those costs were just the initial ones — now all these stocks have zero cost.

As for the stocks mentioned after the original 16, starting from March-April: one was 600607, which was mentioned as "drawing some traitor blood." It was at 13 yuan then. After doubling, I dumped part of the position to bring costs to zero — this was casually noted the same day. 000338 — on the day the poem was written, May 15, this ID started entering the day after the poem was finished. Just look at the chart and you'll know. 600139 — the very next morning after mentioning this stock, I specifically came on to say the float is too small, don't buy recklessly. This ID naturally didn't buy recklessly either. Look at what this ID said at the time — was it clear enough?

Chán Zhōng Shuō Chán

2007-05-22 08:49:55

Everyone please note, the stock this ID mentioned yesterday was just an example. Since some have very small floats — for instance, this ID is tinkering with a stock with contents similar to that zinc-germanium one, but the float is truly too small, simply can't be discussed publicly — mentioning it would cause chaos. This isn't 2000 anymore; risk must be the first consideration for any stock. Entry must be based on buy points at major levels. For small-float stocks, don't buy recklessly, otherwise the trading pattern gets disrupted, and a washout becomes necessary. Everyone's best approach is to follow the investment thesis to buy stocks, and ideally continue holding those already richly profitable yet still with great potential. This reduces oscillation risk. Otherwise, if everyone rushes to swap stocks, it becomes a total mess.

There was also 600569, also mentioned on May 21. Trading was halted on the 22nd. This ID also bought on both the 21st and 22nd. However, this stock had bad luck — it was supposed to surge but got halted and ran into the 530 crash. So this ID explicitly stated on June 13, the day it resumed trading: "Today, that confined steel stock comes out. Many people here bought before the halt at just over 9 yuan — at least you were spared the agony of being shaken out and dodged a major crash. If you reacted quickly this morning, you could still have had over 10% gains. Originally, without this big crash, this stock would definitely have had consecutive limit-ups. Now it can only go through a washout first, letting those who need cash exit first — this is something frequently encountered in market operations. The script, occasionally, needs revisions. As for the subsequent trend, just look at the technical chart and it's not hard to figure out." If you chased this stock higher after June 13 instead of waiting for a buy point, then this ID seriously suspects you are a direct disciple of Kong the Man. As for this ID personally, look at the 60-minute chart — with such a huge top divergence, would this ID sit there numb and oblivious? For a stock with a major sell point, the greatest kindness is to smash it dead — sell first, buy later, maintain rhythm. That's how costs get reduced. Otherwise, how would costs ever get to zero? As for 600636, this ID is also slowly building a position.

Of course, this ID has several stocks never mentioned: 600839, 000021, 000001. These are all stocks this ID sucked massive amounts of money from during the '96 bull market. Buying them is purely nostalgic, and participation was limited. All were bought around New Year's, and all now have zero cost. 002121, 002123 — these are the kind of sub-60-million total shares, sub-2000 float SME board stocks this ID has mentioned many times. There's also 002114 — all bought at IPO. The floats are too small to buy much, doesn't cost much either. These haven't fully reached zero cost yet, but they're getting close.

Since many newcomers don't know all these stories — some even send messages asking "Dear Sister Chan! I visit frequently to study. You always mention 16 stocks in your articles — could you name them? Eagerly awaiting!" — so let me list this ID's original 16 stocks. The figures in parentheses are the prices at the time of mention, which are also this ID's initial purchase prices, rounded to whole numbers for convenience.

Note: this ID is not a market maker, though more ferocious than any market maker. This ID has absolutely no need for anyone to carry the sedan chair. This ID currently feeds on market makers' blood — today's market makers are all this ID's juniors. So those who don't hold these stocks should just watch. Whatever you do, don't chase high prices. Those with weak technical skills should especially heed this. Of course, if you've been holding from low levels, you can certainly keep playing — ride these boy-toy stocks until they're squeezed dry. But ultimately, everyone must learn to hunt for their own food — that's the whole point of coming to study this ID's theory.

000999(6), 000600(5), 000777(8), 600777(4), 000778(5), 000416(3), 000915(3), 000099(4), 600635(5), 600649(6), 600578(5), 600343(11), 000938(10), 600432(19), 000998(9), 000802(10)

On the road — no main posts, but daily market analysis can continue. Probably back in Beijing by next weekend. This week's concert — free activity, everyone.

Appendix

Since I need to travel, let me post this line segment chart first — otherwise, by the time I return, a huge pile of K-lines will have accumulated, requiring many charts. Yesterday's analysis was very clear: "Tomorrow is still about that 4244 point — stabilize above it and the market strengthens; otherwise, the 5-minute hub oscillation continues, and watch out for a third-type sell point." Today's trend was precisely suppressed again right at the 4244 point, followed by a sharp plunge — all of this was easy to analyze in real-time. The consolidation divergence at 81-82, the second-type sell point at 84, then a standard line segment decline, with divergence appearing before and after the micro hub indicated by the red arrow, leading to the turning point at 87. But this turning point, since 86-87 shows no divergence, can only be a sub-level of the line segment. Therefore, one cannot conclude now that this line segment is complete, unless point 85's 4131 is broken above again.

From a hub perspective, the lower boundary of the 5-minute hub at 75-84 is at 4188 points. If subsequent price action fails to reclaim this level, one must guard against the formation of a 5-minute third-type sell point. As stated earlier, the current situation at 46-87 already constitutes a 30-minute hub. The short-term question is simply whether the third segment of this hub is complete. What follows will be a hub oscillation, with the hub range at [4067, 4192]. This hub will dominate the market for a while until a 30-minute third-type buy or sell point emerges.

Next week's trading is critically important. Since it involves the closing of the monthly candle and especially the quarterly candle — if the quarterly candle leaves a long upper shadow, then market pressure from July to September will be enormous. So for the bulls, next week's mission is to prevent the quarterly candle from leaving a long upper shadow. As long as the close is above the 1/2 line at 4144 points, that's the bulls' greatest victory. This ID's assertion from early May that the 1/2 line at 4144 points would dominate the market for at least 3 months now seems certain to hold.

On individual stocks, just do your chart homework. Many of you may have noticed — whenever this ID goes on a trip, this ID's stocks all seem to trade listlessly. Can't blame this ID for that; just treat it as coincidence. Hopefully the big and small market makers inside will change this pattern — is this fun for them? Hoping for some improvement this time.

Market analysis will continue daily after the close next week. This weekend — go indulge, everyone.

This ID needs to get to the airport. Signing off now, goodbye.

Replies

缠中说禅 2007/6/22 8:32:39

Today's market analysis will be appended to this post after 3:30 PM.

Signing off for now, goodbye.

缠中说禅 2007/6/22 15:47:44

Since I need to travel, let me post this line segment chart first — otherwise, by the time I return, a huge pile of K-lines will have accumulated, requiring many charts. Yesterday's analysis was very clear: "Tomorrow is still about that 4244 point — stabilize above it and the market strengthens; otherwise, the 5-minute hub oscillation continues, and watch out for a third-type sell point." Today's trend was precisely suppressed again right at the 4244 point, followed by a sharp plunge — all of this was easy to analyze in real-time. The consolidation divergence at 81-82, the second-type sell point at 84, then a standard line segment decline, with divergence appearing before and after the micro hub indicated by the red arrow, leading to the turning point at 87. But this turning point, since 86-87 shows no divergence, can only be a sub-level of the line segment. Therefore, one cannot conclude now that this line segment is complete, unless point 85's 4131 is broken above again.

From a hub perspective, the lower boundary of the 5-minute hub at 76-84 is at 4188 points. If subsequent price action fails to reclaim this level, one must guard against the formation of a 5-minute third-type sell point. As stated earlier, the current situation at 46-87 already constitutes a 30-minute hub. The short-term question is simply whether the third segment of this hub is complete. What follows will be a hub oscillation, with the hub range at [4067, 4192]. This hub will dominate the market for a while until a 30-minute third-type buy or sell point emerges.

Next week's trading is critically important. Since it involves the closing of the monthly candle and especially the quarterly candle — if the quarterly candle leaves a long upper shadow, then market pressure from July to September will be enormous. So for the bulls, next week's mission is to prevent the quarterly candle from leaving a long upper shadow. As long as the close is above the 1/2 line at 4144 points, that's the bulls' greatest victory. This ID's assertion from early May that the 1/2 line at 4144 points would dominate the market for at least 3 months now seems certain to hold.

On individual stocks, just do your chart homework. Many of you may have noticed — whenever this ID goes on a trip, this ID's stocks all seem to trade listlessly. Can't blame this ID for that; just treat it as coincidence. Hopefully the big and small market makers inside will change this pattern — is this fun for them? Hoping for some improvement this time.

Market analysis will continue daily after the close next week. This weekend — go indulge, everyone.

This ID needs to get to the airport. Signing off now, goodbye.

缠中说禅 2007/6/22 17:05:34
Everyone run for your lives!