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No News, Continue Raising the Bulls' Outpost Higher

2007/10/15 15:15:15

Clearly, the weekend reserve requirement hike is not the policy resonance the bears have been waiting for. Friday's big oscillation accompanied by sector rotation had actually already revealed the bears' plans in advance. Last week, this ID explicitly said: with no news, theme stocks would seize the opportunity to rebound and strengthen, giving the China-prefix stocks a rest. These two days' price action is merely the live performance of that script. Watching the movements of 000777, 600343, 000600, 000807, 002149, 000822, etc. over these two days, along with the broad increase of second and third-tier individual stocks on the gainers list, this sector rotation and rebound is plain as day. But note — apart from a few with recent substantive catalysts, most theme stocks currently don't have the conditions for a major launch. It's merely a transitional gear-shift.

Of course, the most interesting ones are still PetroChina and China Unicom. Today, the two contributed nearly 160 points to the index. Without these two pillar stocks of this ID, today's market would be green. The significance of these two — this ID has said countless times. With PetroChina and China Mobile coming up behind, what does this ID have to worry about? What's there not to go all out on? Right now, for the bears, the only important thing is converting the bulls' kinetic energy into the bears' potential energy. Everything is proceeding according to the bears' designed plan — potential energy keeps accumulating. The moment of the flood release only needs the policy side's full moon.

On the policy front, there's something that must be corrected. Many people still think the last stamp duty move was one particular ministry's idea. Ridiculous — can a single ministry decide something that big? Stop thinking with your toes, will you? Let me state clearly: any future policy regarding the stock market will inevitably be the result of an overall, comprehensive decision from the top.

On individual stocks, those due for rebounds will do so in succession. After the China-prefix stocks pause to rest, if the policy window still hasn't opened, they'll continue pushing up, raising the potential energy further. That's all there is to it. This ID already mentioned having a sentiment about 6100 points. As for whether the policy side gives that opportunity, this ID has no attachment.

Today's report contains nothing surprising — there couldn't possibly be any direct commentary on the stock market in it. The most noteworthy thing today was actually a certain elder scholar, who has always prided himself on being an academic, changing from his stance of criticizing speculation below 3000 points to praising the merits of speculation at 6000 points. This counts as one of the great anecdotes in China's capital market history. This ID's views have never "kept pace with the times" and have never changed:

  1. China's stock market great bull market — 30,000+ points over 20 years.
  2. Currently still in the first phase of the bull market.
  3. A medium-term correction is currently needed, and the economy mainly needs rectification and consolidation.
  4. The medium-term correction occurs at the resonance of capital, technicals, and policy. Currently, capital and technicals are laying groundwork for policy.
  5. Turning component forces into resultant force — this is a complex process. Kinetic energy converts to potential energy, everything proceeding step by step.
  6. If policy also gets caught up in the frenzy, that means the first wave's trend risks reaching its end. Then go for the bargain revolution — even more speculative than speculation.

7. This ID can only be one component force, not the resultant force. Ultimately, everything is determined by the resultant force. Whether this ID succeeds depends on whether the resultant force can be guided out according to this ID's rhythm.

8. For retail investors, operationally: those with poor technical skills should gradually reduce positions on rallies. Those with good technical skills should play the abundant opportunities within the oscillation, but must pay attention to rhythm. Those who chase highs and sell lows have no right to play the oscillation game.

Everything starts from the logic defined by these eight points. From a pure profit perspective, this ID would like to see scenario 6 occur. But from the perspective of national economic strategy and security, this ID absolutely does not want to see scenario 6.

Something tonight, can't write the post. Will make it up tomorrow morning if there's time. Apologies.

Signing off, see you later.