"Everyone Investing in Stocks"—The Inevitable Path to a Mature Market Economy
2007/4/23 8:53:46
Recently, as A-share account openings, indices, and trading volumes have repeatedly hit new highs, "everyone investing in stocks" has once again become a big hat and a big stick constantly brandished by certain people who habitually blame the stock market around the clock. So what exactly does "everyone investing in stocks" mean? What does it signify? Is it really the plague that some people claim?
First, we must define the concept of so-called "everyone investing in stocks." If "everyone investing in stocks" means that all people abandon all work and go work at securities firms, and all normal social activities are interrupted by the sole activity of buying and selling stocks, then this kind of "everyone investing in stocks" has never appeared before, does not exist now, and will never happen in the future. Anyone using this meaning of "everyone investing in stocks" to criticize the current market is not worth refuting. If "everyone investing in stocks" means that more and more people in society are beginning to rapidly convert their assets into virtual assets such as stocks, then "everyone investing in stocks" under this definition precisely represents the correct direction of market economy development and is the inevitable path to a mature market economy. During the developmental stage of a market economy, social and personal wealth is measured in non-virtual assets such as physical goods and currency. But as the capital market gradually becomes the most important foundational part of the social economic structure, the value of virtual assets such as stocks will gradually become the primary component of wealth. In an economy with a gradually strengthening capital market, whether social or personal wealth, there will inevitably be a historical process of rapid conversion from physical goods, currency, and other asset forms into virtual asset forms such as stocks, thus correspondingly forming the "everyone investing in stocks" phenomenon as defined above.
Viewed from the historical trend of market development, the current "everyone investing in stocks" is not excessive—far from it. Currently in China, whether in social or personal assets, the proportion of virtual assets like stocks is still vastly distant from that of developed market economies. Before virtual assets like stocks reach 30% of total social and personal assets, "everyone investing in stocks" can only be considered at a preliminary stage, and a major rapid development is necessary to meet the minimum requirements of market economy development. Currently, the gradual emergence of the "everyone investing in stocks" phenomenon in China's capital market not only conforms to the inherent logic of market economy development but also possesses historical inevitability and broad development prospects. "Everyone investing in stocks" enables any enterprise and individual in society to fairly choose and participate in the most valuable investment opportunities in the market economy through the open platform of the capital market, allowing social and personal resources to be allocated most fairly and rationally. Before virtual assets like stocks reach 50% of total social and personal assets, all criticism of "everyone investing in stocks" is laughable and short-sighted.
Obviously, "everyone investing in stocks" can take various forms and cannot all involve direct participation by every individual. Therefore, the great development of indirect investment channels such as funds will become the inevitable choice for realizing the grand historical trend of "everyone investing in stocks." From this, various financial innovations, technological innovations, and institutional innovations can be better realized within a new major economic framework. The wealth effect brought by the capital market will also become the greatest motivation for people to invest and start businesses. As the saying goes, the power of role models is infinite. Recently, companies listing on the SME board have been creating a billionaire on average every 11 days—this pace is not too fast but too slow. China's rise and the rise of China's economy will inevitably make China a capital powerhouse, and China's increasingly powerful capital market will inevitably produce more and more wealth holders. Americans like Bill Gates and Buffett can possess world-class personal wealth—for individuals, this may be coincidental, but for the United States with its powerful global capital market, it is inevitable. A world-class capital market necessarily creates world-class wealth holders, and the historical inevitability of China's capital market becoming one of the world's most important capital markets also means that large numbers of world-class wealth holders will inevitably emerge continuously from China's capital market. Obviously, the day when China's capital market produces the world's richest person is not far off.
Viewed from the historical trend of China's market economy development, the current stock market enthusiasm is not too high but has not yet reached the level it should be at. The market will of course have short-to-medium-term corrections, but the long-term trend is irreversible. Any level of correction will only invite an even larger rally. The U.S. stock market, with more than 100 years of history, having experienced the great crashes and corrections of 1929 and 1987, continues to hit new historical highs to this day. The development history of capital markets across countries shows that the stock market is the place with the highest average long-term investment returns, and market movements without exception trend upward overall, with corrections being secondary. China's rapidly growing economy with enormous transformation potential—the wealth and investment opportunities it brings need to be shared by all citizens through the capital market. "Everyone investing in stocks" is not a plague but a great thing that benefits the country and the people, in accordance with market economy development.
Appendix:
The market moved very normally today. A unilateral rally without forming any hub—after holding above 3520 on Friday, the original uptrend continued, so new highs were hit. This is 100% unremarkable from a technical standpoint. If you're still gun-shy about such movement, your mentality absolutely has a problem. For those with poor technical skills, this ID has already given the simplest method: for medium-term, watch the 5-week moving average; for short-term, watch the 5-day line. If you can't even manage that, there's no helping you.
Some people constantly switch stocks. This actually isn't a problem, but it requires good technical support. If you frequently switch stocks only to see the stocks you sold surge while the ones you bought don't move, it proves you're not qualified to switch stocks. Just hold patiently—your technical level hasn't reached the level for stock switching and playing short-term swings. The most valuable thing in life is self-awareness—in market operations, this is even more important. Not every activity suits everyone. If you want to reach a higher level, you need more diligent study. Before you've mastered it, adopt a relatively conservative approach—that's the viable way.
Since a gap was left today, from the most bullish perspective, if this gap isn't breached during the consolidation over the next three days, it constitutes a so-called breakaway gap, which would greatly expand the market's short-to-medium-term upside target. Of course, there's no need to predict—the market will naturally tell you. This gap will become an important pullback and support force for subsequent market action. It's also the main technical factor for market fluctuations over the next few days.
Replies
缠中说禅 2007/4/23 15:19:01
The market moved very normally today. A unilateral rally without forming any hub—after holding above 3520 on Friday, the original uptrend continued, so new highs were hit. This is 100% unremarkable from a technical standpoint. If you're still gun-shy about such movement, your mentality absolutely has a problem. For those with poor technical skills, this ID has already given the simplest method: for medium-term, watch the 5-week moving average; for short-term, watch the 5-day line. If you can't even manage that, there's no helping you.
Some people constantly switch stocks. This actually isn't a problem, but it requires good technical support. If you frequently switch stocks only to see the stocks you sold surge while the ones you bought don't move, it proves you're not qualified to switch stocks. Just hold patiently—your technical level hasn't reached the level for stock switching and playing short-term swings. The most valuable thing in life is self-awareness—in market operations, this is even more important. Not every activity suits everyone. If you want to reach a higher level, you need more diligent study. Before you've mastered it, adopt a relatively conservative approach—that's the viable way.
Since a gap was left today, from the most bullish perspective, if this gap isn't breached during the consolidation over the next three days, it constitutes a so-called breakaway gap, which would greatly expand the market's short-to-medium-term upside target. Of course, there's no need to predict—the market will naturally tell you. This gap will become an important pullback and support force for subsequent market action. It's also the main technical factor for market fluctuations over the next few days.
缠中说禅 2007/4/23 15:19:37
I have a meeting shortly. I'll be back at 9 PM to answer questions. Sorry.
Signing off, see you later.
缠中说禅 2007/4/23 21:11:55
Good evening everyone. Just got back—arrived late. Sorry.
缠中说禅 2007/4/23 21:15:39
[Anonymous] 水房姑娘
2007-04-23 20:49:44
Since a gap was left today, from the most bullish perspective, if this gap isn't breached during the consolidation over the next three days, it constitutes a so-called breakaway gap, which would greatly expand the market's short-to-medium-term upside target. Of course, there's no need to predict—the market will naturally tell you. This gap will become an important pullback and support force for subsequent market action. It's also the main technical factor for market fluctuations over the next few days.
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Has MM set the time for the adjustment at three days? Why?
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This isn't absolute—it's a broad statistical concept. Generally, after a gap appears, if it's filled within three days, it doesn't count; if it's not filled, it's basically a breakaway gap. If you explain it technically, it's actually very simple: because three days later, the 5-day moving average will definitely be above the gap. If it doesn't effectively break below the 5-day line, of course the gap won't be filled. And the 5-day line has upward pushing force, so it will naturally continue the trend until the 5-day line is broken, forming a larger correction that would create an opportunity to fill the gap. Of course, if the price has moved quite far, it would take an even larger level correction to have a chance to fill the gap.
缠中说禅 2007/4/23 21:27:24
[Anonymous] N8
2007-04-23 15:48:23
Sister Chan, can Chan Theory ultimately be simplified to this: under the premise of level, guiding operations based on the relationship between the last hub and the current trend?
==
If you're operating at the 30-minute level, look at the hub changes within the segment of movement leaving that 30-minute hub. The specifics will all be covered later.
缠中说禅 2007/4/23 21:33:10
[Anonymous] 走失的爱犬
2007-04-23 21:13:36
Sister Chan, you seem to really like football. Inter Milan has finally won the title on the pitch after 18 years. Watching the Tianxia Football program's introduction of the 18-year journey today was quite moving. Are you their fan? I'm a diehard AC fan. Hope they return triumphant on Wednesday.
=
Most unfortunately, we don't share common ground here. This ID is a Premier League fan—to be precise, I've always been a Liverpool fan. Yes, that Liverpool that came back from 0-3 down against your AC to win.
缠中说禅 2007/4/23 21:34:46
[Anonymous] Sina User
2007-04-23 21:31:24
Boss, has someone studying Zen not passed the test of sensual desire yet? Can you explain?
=
What test? Test for whom? This ID has no tests here at all—what is there to pass?
缠中说禅 2007/4/23 21:37:57
[Anonymous] 在路上
2007-04-23 21:33:30
Hello Sister Chan.
My judgment on the market today was wrong, but my operations weren't. Regarding the previous lesson, I have the same question as the following classmate. After market close today, when Sister Chan said there was no hub, I re-examined. On the Shenzhen and Shanghai 30-minute K-lines, the bodies don't overlap, but the upper and lower shadows do. Should we only look at the bodies and not the shadows?
[Anonymous] 钱龙
2007-04-23 21:03:23
Hello Master Chan,
Didn't you say that three K-lines with overlap count as a hub in each day's intraday movement? On today's 30-minute chart, don't candles 2-4 have overlap? Today should count as having a hub, shouldn't it?
Hope knowledgeable classmates can also help take a look.
=
Saying that 5, 6, 7 have some overlap is somewhat justifiable; 2, 3, 4 don't have overlap. But that overlap is very small, which is why this ID said there was almost no hub. To be precise, there is a hub with a very small range in the overlapping area of K-lines 5, 6, and 7.
缠中说禅 2007/4/23 21:39:38
[Anonymous] 再问一个
2007-04-23 21:29:13
Sister Chan keeps teaching us not to chase stocks higher,
but in this kind of bull market broad rally, they shoot up in the blink of an eye! If we don't chase, we miss out!
Could you teach us a few tips for chasing stocks in a bull market?
==
Third buy point. If you have good technical skills and are bold, set the level lower.
缠中说禅 2007/4/23 21:41:08
[Anonymous] 再问一个
2007-04-23 21:29:13
Sister Chan keeps teaching us not to chase stocks higher,
but in this kind of bull market broad rally, they shoot up in the blink of an eye! If we don't chase, we miss out!
Could you teach us a few tips for chasing stocks in a bull market?
==
Third buy point. If you have good technical skills and are bold, set the level lower.
缠中说禅 2007/4/23 21:41:51
[Anonymous] 再问一个
2007-04-23 21:29:13
Sister Chan keeps teaching us not to chase stocks higher,
but in this kind of bull market broad rally, they shoot up in the blink of an eye! If we don't chase, we miss out!
Could you teach us a few tips for chasing stocks in a bull market?
==
Third buy point. If you have good technical skills and are bold, set the level lower.
缠中说禅 2007/4/23 21:43:28
[Anonymous] 再问一个
2007-04-23 21:29:13
Sister Chan keeps teaching us not to chase stocks higher,
but in this kind of bull market broad rally, they shoot up in the blink of an eye! If we don't chase, we miss out!
Could you teach us a few tips for chasing stocks in a bull market?
==
Third buy point. If you have good technical skills and are bold, set the level lower.
缠中说禅 2007/4/23 21:46:56
[Anonymous] 走失的爱犬
2007-04-23 21:42:18
Haha. Hope this year AC and Sister Chan's Liverpool face off again.
=
Not bad. Ever since Becks left, this ID doesn't like watching Man United either. I'm just afraid AC doesn't have the ability—if they end up like Roma, that would be boring.
缠中说禅 2007/4/23 21:51:11
[Anonymous] Sina User
2007-04-23 21:45:33
=
Saying that 5, 6, 7 have some overlap is somewhat justifiable; 2, 3, 4 don't have overlap. But that overlap is very small, which is why this ID said there was almost no hub. To be precise, there is a hub with a very small range in the overlapping area of K-lines 5, 6, and 7.
=============
Now I'm really confused. K-lines 5 and 7 don't touch at all.
I don't understand what counts as overlap. Please enlighten us, Sister Chan.
==
One has a high of 3892, the other a low of 3688—how is there no overlap? Strictly speaking, 4, 5, 6 could also be considered to have some overlap, but these overlaps of just a few points can all be ignored in the broader market reading. A standard intraday hub generally needs to have amplitude of at least about 10 points. That's why this ID said today can almost be considered hub-less.
缠中说禅 2007/4/23 21:53:57
[Anonymous] 钢股份
2007-04-23 21:50:18
Why would the Queen like the Premier League? The Premier League only looks nice on the surface—the technical content and tactical content are both lacking. I'm a Juventus fan!
==
Football—the most fundamental thing is fighting spirit; technique and all that comes after. I like Liverpool because they are the most spirited team in the world. Of course, having Fowler and Owen was also one of the reasons this ID liked them.
缠中说禅 2007/4/23 21:56:55
[Anonymous] 新股手
2007-04-23 21:51:58
Many stocks have hit all-time highs, like most in the steel sector.
How should we handle old stocks that have already hit new highs?
==
If you're a medium-term trader, watch the 5-week moving average. Look at those bull stocks—when they're in a medium-term rally, when did they ever break below the 5-week moving average? Once broken, it means a significant correction. For short-term, you can watch the 5-day line. Of course, the most precise approach is to look at hubs, divergence, etc., but that requires you to study to a certain level first.
缠中说禅 2007/4/23 22:01:03
[Anonymous] 新股手
2007-04-23 21:51:58
Many stocks have hit all-time highs, like most in the steel sector.
How should we handle old stocks that have already hit new highs?
==
If you're a medium-term trader, watch the 5-week moving average. Look at those bull stocks—when they're in a medium-term rally, when did they ever break below the 5-week moving average? Once broken, it means a significant correction. For short-term, you can watch the 5-day line. Of course, the most precise approach is to look at hubs, divergence, etc., but that requires you to study to a certain level first.
缠中说禅 2007/4/23 22:05:36
[Anonymous] 请缠姐一定看看
2007-04-23 21:59:55
Hello Sister Chan
May I ask:
- On the 30-minute chart, if there are three K-lines with overlap within a 5-minute movement segment, can these three K-lines be considered a hub of the 5-minute level movement?
- Must these three K-lines alternate between red and green? If three red lines have overlap, can they count as a hub?
- Must the overlapping area of these three K-lines be in the body? If the high of one overlaps with the low of another, does that count?
==
A 5-minute hub requires three segments of 1-minute level movements to overlap. These two lessons were about how to read intraday charts—the hub concept used there is different from the previous one; it was just borrowed. Don't mix them up.
Overlap simply means three intervals share a common part—it's that simple. Why make it so complicated? Also, like today's overlapping interval that's very small, it can be ignored. Of course, counting it strictly is fine too, but it has little significance. However, it can serve as a reference. For example, today's 3688 to 3692 can be used as a reference for tomorrow's strength or weakness—if it holds, it's strong; if it breaks and can't hold, there's a problem.
缠中说禅 2007/4/23 22:07:39
[Anonymous] Sina User
2007-04-23 22:03:23
Sister Chan, good evening!
I've been watching the market for a few months now, and I haven't learned well. I have some questions:
I use the 5-minute level as the basis for buying and selling, but in actual operation there's one point I can't break through. When the 5-minute MACD bars stop growing, the profits on the 1-minute have already decreased a lot. So I usually watch both, but then another problem arises: sometimes after a 1-minute consolidation divergence it doesn't drop but forms a 1-minute third buy point and continues rising, but sometimes after a 1-minute consolidation divergence it just drops directly, while on the 5-minute it barely makes a new high and then diverges. How do I handle these two situations? I often miss opportunities because I can't accurately distinguish between these two scenarios. Thank you!
==
When using 5-minute, you can't just look at 5-minute—you absolutely must be clear about the 30-minute. Also, I can see you don't fully understand the auxiliary judgment of divergence yet, and you haven't clearly distinguished the situation where a smaller level transforms into a larger level. Please study these two issues further.
缠中说禅 2007/4/23 22:15:48
Sina is too slow today—it often takes several attempts to post. Seems like as the stock market heats up, Sina is about to crash too.
Everyone, keep a good attitude—this market still has a long way to go. Today when this ID was having dinner, I said to someone: the current situation isn't crazy at all. Think about the past—it even went from 900-something to 6000-something in less than a year and a half. Now it's been nearly two years, and Shanghai, also starting from 900-something, hasn't even reached 4000. That's practically too rational.
No more talk. The zi hour is approaching, and today is not a weekend—we must strictly follow discipline.
Signing off, see you later.
缠中说禅 2007/4/23 8:57:32
Recently I've had things to do after market close, so I've been posting in the morning. Nothing special—no need to be paranoid. The assessment of the trend was stated very clearly on Friday, and there's nothing to add here.
I'll write the commentary in the afternoon after close, but answering questions may have to wait until 9 PM when I'm back. Sorry.
Signing off, see you later.