What Must Come Will Come—Warm Applause for the Decline

2007/9/11 15:59:25

It has been repeatedly emphasized recently that those who try to go against policy will ultimately end up disappearing—this has been proven again and again by the 18-year history of China's capital market. Whatever the reason, today's decline deserves a warm round of applause.

Technically, this ID has stated very clearly that this week will very likely form a top fractal on the weekly K-line—the first since 3600 points. At the smaller level, the situation can still be classified as 5-minute hub oscillation. The principle of selling first and buying back is more than sufficient to let you dodge today's decline.

Well, the decline is already a fact—no need to belabor it. The question is how to operate going forward. In yesterday's chart, point 79 was at 5265. As long as the subsequent 1-minute rebound movement fails to reclaim and hold above that level, the third-type sell point is confirmed, and afterward the market must at least expand into a 30-minute hub. The worst case would be a downward shift of the 5-minute hub.

On the short-term, September 7 on the daily chart—the top fractal has formed. Obviously, there must now be at least a stroke-level correction. Therefore, before an effective daily bottom fractal forms, the market's correction will not effectively end. But short-term oscillation rebound opportunities are still plentiful. Whether it's worth participating depends on each individual's situation.

Currently the 5-week line is at 5074. Generally speaking, the first time the 5-week line is touched or broken, there will be a strong rebound. Therefore, combined with the above analysis, whether this rebound constitutes the 5-minute hub's third-type sell point will determine the magnitude of the entire correction.

Additionally, since the weekly top fractal is essentially confirmed barring exceptional circumstances, the key is to see which of the two types of correction follows this top fractal—specifically, whether the 5-week line is effectively broken. Once effectively broken, the correction will be of a larger magnitude, requiring at least the formation of a weekly bottom fractal to end. If the 5-week line is not effectively broken, the correction's amplitude will be limited.

This ID clearly stated in late August that this ID supports all activity related to the 2/3 line. Now the 2/3 line is in sight again. The correction will use this line as its axis, oscillating above and below to form, and as long as this line is ultimately held, the market will once again launch a medium-to-long-term rally. Before it can stabilize above this line, repeated back-and-forth is inevitable. Look at how the market traded around the 1/4 line below 3000 and the 1/2 line below 4300 to understand.

The most common and most pointless behavior in market operations is forgetting about corrections when things are rising, and thinking the world is ending when a correction comes. If that's your mentality, go home and buy tofu instead.

Anyone who starts blaming this or that after a decline, please leave the market. Were the policy changes something new today? Weren't people still very bullish yesterday, saying they'd push against policy? Why so deflated now? In market operations, everything is on you—the only things to blame are your own greed and fear.

Eternal emptiness of the ages, a single morning's wind and moon. No movement is worth dwelling on. What's past is past—the key is future operations. Whether past operations were successful or failures, as long as the market exists, you exist, stocks exist, and capital exists, this game keeps turning. There are no destined winners or losers. The key is from this moment on: say goodbye to your own greed and fear, deeply understand your own abilities and possibilities, and form a trading system suited to yourself. This way, losers can become winners, winners can keep winning. Rehashing the past is pointless.

I have things to attend to today and can't answer questions. Signing off, see you later.