When in February, the market started from 2635 and in just 8 trading days surged to 3000 points.
Many people cried out, the bull market is coming, 2635 is the new starting point of the bull market.
When the market adjusted on 5.20 and the index began to fall, many people still believed that the market would not fall below 3000 points again.
When the market broke through 3000 points, many people began to shout, this is a normal retrace.
Subsequently, 2900 was broken, and the gap of 2867 was filled.
Then, some people believed that the second retrace was over, and it was time to start the second phase of the bull market, which was another big rise of 500 points.
The belief in the bull market began to collapse again.
3144, Old Hu's bottom.
3053, stamp duty bottom.
2923, policy bottom.The numbers 2882, 2724, and finally 2635.
Every time the market fell, many people were shouting that it had hit bottom and the bull market was coming.
Each time they were proven wrong, until many dared not to shout anymore, until the market suddenly returned to 3000 points, and 2635 became the starting point of the bull market in many people's hearts.
But now, this new starting point of the bull market in everyone's eyes, 2635, seems to be in danger again.
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Because the last fall of the last round of decline, from 2893 in mid-January to 2635 in early February, was just a short period of more than ten trading days.
From 2635 to 3000 points, it was only eight trading days.
It can be seen that in this area, the chips are relatively vacuum, and there is not much actual support.
It can be said that whether the market has a rebound first or goes down directly, it will ultimately test the validity of 2635 points.
Everyone must be mentally prepared for this.
In case 2635 is broken and it is proven that it is no longer the starting point of the bull market, do not let your faith collapse.Even if the market breaks through 2635, it does not mean that the true bottom has been reached; it could still be far away, and the market may continue to experience sharp declines.
It is not that 2635 is unimportant, but whether 2635 is the starting point of a bull market is not crucial.
The starting point of a bull market is not determined by a specific index level, but by whether there is a foundation for the rise, the fundamental elements for an increase.
We have all heard that there are several types of market bottoms.
There are three common ones: valuation bottom, policy bottom, and market bottom.
These three bottoms can coincide or be separate; there is no absolute rule.
The worse the situation, the more likely these three bottoms are to be separated.
This means that the market may have a complex bottom structure, requiring resonance from all three to be completed.
The first one is the valuation bottom.The valuation bottom is the most ambiguous and the least effective bottom.
So far, it is impossible to determine whether 2635 is the so-called valuation bottom.
The reason is simple: valuations are floating, and there is no standard for the lower limit of valuations.
When most people talk about the valuation bottom, they will take the price-to-earnings ratio of A-shares as the standard.
So, what multiple of the Shanghai Composite Index is the bottom? What about Shenzhen? The ChiNext board? The Science and Technology Innovation Board?
Especially in the past two years, the performance of the Science and Technology Innovation Board may experience significant fluctuations, with questionable profitability, and the price-to-earnings ratio may rise instead of falling.
Should we change the standard to the price-to-book ratio or the price-to-sales ratio?
For large blue-chip stocks, is 10 times the valuation bottom, 9 times? Or 8 times?
You should know that a drop from 10 times to 8 times still has a 20% space, which is not a small range.
Therefore, 3000 points can be the valuation bottom, and 2400 points can also be the valuation bottom, which is too much difference.Look at the valuation, in terms of confirming the bottom, it is the most unreliable thing.
Secondly, the policy bottom.
The policy bottom is the easiest to understand, but the policy bottom is definitely not something that can be achieved overnight.
When the stamp duty was reduced, when 3053 appeared, some people thought it was the policy bottom, but it was obviously not.
Subsequently, the reform of the dividend system, the implementation of the new regulations on shareholding reduction, all of these can be understood as a combination of policies.
Including the inclusion of state-owned enterprises' market value management in the assessment, etc., all have the appearance of a policy bottom.
However, the policy cycle is uncertain, in the process of continuous policy introduction, where exactly is the policy bottom, this is also difficult to judge.
Policy is a process, the real bottom, and the actual connection with the policy bottom is actually not high.
If the market continues to fall, it is also possible that policies will be introduced repeatedly, and the policy bottom will also be diverse and unpredictable.
So, don't think the bottom has arrived every time a policy comes out.The third one, market bottom. (Capital bottom)
The so-called market bottom is actually a capital bottom.
The market bottom is not something we can judge, but is actually created by the real money and silver of capital.
The reason why 2635 is questioned is fundamentally the issue of new capital entering the market.
All bottoms, more or less, will have new capital entering, changing the market pattern from the capital side.
But if you think carefully, how many times have we heard about new capital entering the market along the way of 2635?
A bottom without new capital must be repeatedly tested.
The market's pullback seems to be a retest, but in fact, it is a reconfirmation of new capital.
Because if there is new capital, it will inevitably be strictly defended at 2635.
But if there is no new capital, 2635 will become isolated and helpless, and it is very likely to be broken through again.Valuation and policy, one is somewhat intangible, the other is long-term, only capital is the present, determining the key to whether it is the bottom.
Retail investors are always eager to catch the bottom, on the one hand, because the bottom is indeed enticing, and on the other hand, because they are deeply trapped, catching the bottom can help recover losses.
However, catching the bottom itself also requires skills.
The bottom at the junction of bull and bear markets must be the turning point of the trend, so one must learn to judge the trend.
The bottom of the trend must be reflected in the weekly and monthly lines.
Simply looking at the daily line of the game, it is impossible to determine whether the bottom is established.
2635 is definitely a low point, but to determine the bottom, at least a trend reversal at the weekly level is needed.
But when we observe the trend line of the weekly line, such as the 20-week line, there is no obvious change in the trend.
If you look at the monthly trend, such as the 20-month line, it is still going down all the way.At present, there is no sign of a trend reversal, nor is there a signal to determine the bottom.
This signal is not something we can guess, but is reflected in the market by the continuous buying of funds.
The absence of a trend reversal signal means that the bottom structure has not yet been completed.
This structure is at the monthly line level, not at the daily line level, nor at the weekly line level.
Only when this structure appears can the market be defined as a reversal, and can be defined as the arrival of a bull market.
Perhaps by the time this signal appears, the market has already left the bottom, missing the buying opportunity of 2635.
But the confirmation of the signal can ensure that our trend has been established, ensuring that we can hold the stock and wait for the rise.
Nowadays, we are still in the bear market cycle of stock game, what we can do is to wait patiently for the real bottom to be explored.
As for 2635, it is just a psychological anchor, do not make predictions, forget it when it is time to forget.
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