The "One Wild Drunken Ride" Game Officially Begins

2007/8/3 15:57:58

Riding a sedan chair does feel quite nice — sitting in the sedan chair watching the scenery along the way has its own charm. Below is the diary for the first day of riding the sedan chair up Mount Hua. This diary will have N days and N chapters.

Today's gap-up opening made it impossible for the June 20th K-line combination to repeat. Yesterday this ID already said "markets often don't proceed in a rational manner — markets often just go on one wild ride of drunken abandon." From the third wave's perspective, quickly distancing from 4300 points and luring in a fourth wave is inherently an urgent matter. As for what consequences may follow — they naturally don't care, and the first two waves care even less. Generally speaking, the later the Nth wave, the more motley its composition. If the first wave's composition was the purest, by later waves it's a mix of everything under the sun.

Today's market began welcoming the vanguard of the fourth wave. If there's no particularly bad news over the weekend, the main force of the fourth wave will enter in large numbers next week. This wave's composition will be even more mixed than the third: deserters from the first three waves who snuck away mid-stream, technical analysts who enter upon seeing the so-called weekly breakout confirmed, those who sold street food outside and are now coming back to open proper shops, and even more numerous are the various men and women burning with anxiety over idle money — the "one wild drunken ride" game officially begins.

For those who entered with the first three waves, starting now, who ends up paying the final bill and what N equals is no longer important. What matters is how to keep this game going as long as possible. But this timeframe isn't determined by any god — under a combined-forces result, starting next Monday, the game clock T begins. T starts at 0 and advances toward the largest possible number. This is like playing a video game — predicting at which level it ends is a sign of having water in your brain.

And just like playing a game, what matters is the operational strategy, not predicting which level the game ends at. Current operations are the same: predictions are pointless games — what matters is precise execution. And execution varies by person, just as in gaming — experts and novices naturally play differently:

For novices, this ID has repeatedly stated the most basic operational strategy: for short-term, follow the 5-day line; for mid-term, follow the 5-week line; for long-term, follow the 5-month line. As long as it's not effectively broken, the corresponding operations need no action — just hold and watch. What constitutes an effective break? It's when the price falls below and the subsequent rebound fails to recover. This rebound is naturally related to the corresponding level — for example, a monthly line break requires watching at least the next month's rebound, not just one day.

For large funds and intermediate-to-advanced retail investors, the key is to use oscillation opportunities to reduce costs. As the market rises, costs are continually reduced while position size remains unchanged. This way, your position naturally decreases as the market rises — meaning more and more cash with no fewer shares. This method effectively avoids potential sudden non-systematic risk while fully capturing market profits.

For advanced retail investors, the key is to fully exploit sector rotation opportunities during market oscillations to capture the market's maximum opportunities.

Someone might ask: what if you can't reach the advanced level? Then be a novice. If you can't even hold stocks — panicking and running at every market wobble — then why trade stocks at all? Just let the stocks trade you.

Yesterday this ID already said: "Regarding individual stocks, component stocks continue to lead the charge. Once the weekly breakout is confirmed as established, second and third-tier stocks will follow." This conclusion remains valid. Moreover, as long as the fourth wave of capital can be lured in, second and third-tier stocks whose earnings risks have been eliminated, as well as stocks with themes, will make big moves. For example, haven't you noticed that these past two days, this ID has been vigorously enticing everyone to visit Beijing for tourism? Note: when trading thematic stocks, absolutely do not chase highs. When you miss one village, there's always the next — every day brings new opportunities. Regardless of whose stock it is, never chase highs.

Stocks are all waste paper. A good strategy and mindset can turn waste paper into gold.

Technically, below is the segmentation of today's chart. For those who still don't understand, please study diligently. For example, the 7 in the chart below — what is it? What is it in relation to the 1-minute hub below it? With such a textbook-perfect chart, if you still can't understand it, then please go re-read this ID's lessons.

The weekend has arrived — time for indulgence. Everyone go enjoy your freedom — don't let stocks hold your life hostage. This ID is going off for wine, poetry, and romance. Won't be keeping you company. Free time for all. The music concert continues Sunday — this time I definitely won't break the promise.

Signing off for now, see you later.