Oscillating While Waiting for PetroChina

2007/11/1 15:16:39

Today's price action was extremely textbook. In the morning, after the divergence, a second segment of a 1-minute hub formed, then the pullback constituted the third segment, thus completing the 1-minute hub. What followed was oscillation around this hub — all that remained was to wait for the third-type buy or sell point.

The broader market has entered a brief directionless phase at this position, primarily waiting for PetroChina. Additionally, weekend news is a psychological pressure factor. However, the U.S. rate cut has also given domestic interest rate adjustments more reason for caution. In short, one wrong step leads to another — this is just the beginning, and how it all ends is deeply worrying.

Of course, apart from major policy changes, interest rate adjustments alone are insufficient to fundamentally affect the market. The speculative short-term play on PetroChina is coming, though this time it probably won't go as smoothly as with Shenhua. But a price that would scare Buffett to death is certain. However, this means nothing to Buffett — he faces the global market and naturally can find better opportunities.

The thing is, Asia's most profitable company was sold to others at rock-bottom prices, and now it's returning at sky-high prices. Doesn't the problem here deserve deep reflection?

May I ask: who should be held responsible for this?

The first principle of market regulation is: whoever did it takes responsibility. Market participants must bear responsibility for market risks, and market regulators must bear responsibility for the consequences of their policies. Think about the bargain-basement sale of China Construction Bank, the bargain-basement sale of PetroChina — isn't it time to discuss the question of accountability?

Now, futures are about to be tinkered with again. May I ask, does anyone dare to stand up and guarantee that the end result won't be an even more farcical joke than the fire sales of CCB and PetroChina?

I have a dinner engagement tonight. I'll try to write a post if time permits. Signing off, see you later.