Key Traits of A-Share Historical Lows Now Appearing!
For the torment of A-shares over the years, all stock investors have felt it deeply, but investing is a cycle of fluctuations.
Coincidentally, A-shares have experienced a long cycle of adjustment in recent years.
There are many objective factors, including the internal contradictions brought about by economic transformation and changes, as well as external suppression factors encountered after China's rise, which have prolonged this adjustment cycle.
Since stock market investment is a cycle of fluctuations, naturally, there are some patterns to be found.
For example, by studying the changes in K-line technical patterns over a long cycle, we can determine which stages the market is in within the cycle.
1.
First of all, it is important to understand that K-line technology is not omnipotent; it is merely a superficial signal of the market's internal changes.
We can use these superficial signals to speculate on subsequent developments.
2.
Secondly, the most intuitive reflection of the market's internal changes in K-line patterns is the fluctuation of volume and price.
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Volume represents the dynamics of funds within the market, and price reflects the market's positioning of the current stock market.
In the short term, volume can be manipulated by market makers, but not in the medium to long term.
Prices are influenced by macroeconomic policies, market sentiment, and economic fundamentals.
Eagle Eye Logic has been in the A-share market for 21 years, and I personally feel that market sentiment plays a dominant role in the A-share market.
What is the bear market about?
It's about pessimistic sentiment.
What is the bull market about?
It's about a surge in confidence.
Why do I say this?
Because, as the Chinese often say, the market is not short of money, but confidence!
That is to say, in the Chinese social structure, as long as the people are given strong confidence, it will unleash tremendous productivity.
Once confidence wanes, it's hard to say.
For example, the current A-shares are a manifestation of extreme lack of confidence due to various issues.
3.
Market sentiment, in the stock market, can be most intuitively shown through volume and price fluctuations.
If the market gradually increases in volume and goes up, it indicates that the bullish sentiment is beginning to show.
If it continues to increase in volume and goes down, it indicates that panic and pessimistic sentiment are erupting.
If the market goes up without volume, it indicates a lack of confidence, and it will come down the same way it went up.
If the market suddenly increases in volume and then can't continue to rise, it indicates that sentiment has been temporarily released and then encountered resistance, without long-term belief.
4.
The bottom price and volume characteristics of A-shares are divided into three steps: The first three points, we analyzed the theoretical knowledge of K-line research on the bottom characteristics, and now let's look at the specific details.
- First, historical major bottoms are often prone to "left bottom + right bottom" patterns.
- Second, the left bottom often comes with a surge in volume and a rise in price, but then it encounters resistance and can't go up, and then it starts to fall, and the volume will become less and less as it falls.
At this time, it enters the right bottom stage, with specific characteristics being: there are few large bearish candles, but small bearish candles continue to decline, and there are also occasional trials of the market with increased volume, going through repeated trials and tribulations.
- Third, at the end of the right bottom building: there are repeated increases in volume and price, and adjustments with reduced volume.
After several trials and tribulations, until one time it begins to continuously increase in volume and go up, it starts the real trend.
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