10.12 Morning Market Trends and Trading Strategies on Monday

Capital markets are a wonderful thing. The stocks of Europe and America, which had already shown signs of reaching their peak, and the dollar index, which had shown signs of reaching its bottom, suddenly changed direction due to an oil settlement issue in the Middle East. The dollar weakened continuously because of this news, although the relevant countries responded quickly, but the market did not buy it and has been weakening for several trading days. I have discussed the relationship between the dollar and American stocks in a previous blog post. They currently have a seesaw relationship. When the dollar weakens, the American index will strengthen, and when the American index strengthens, it drives up the world's stock markets. In addition, the strengthening of commodities due to the weakening of the dollar ultimately gives A-shares the momentum for speculation. Last Friday, the opening was a long upward jump, locking in a red start. A red start is a good thing, with such a large upward gap, but a trading volume less than 10 billion also poses some risks. This could cause the index to quickly seek support from the large gap below if there is no volume support in the future. Last Friday, American stocks continued to strengthen, closing at a new high since the rebound, but regardless of whether it's American stocks or other capital markets, the technical indicators have not improved overall. This makes the future trend of the European and American markets unstable. In my view, this still depends on the trend of the dollar, which directly affects the international commodity market, thereby affecting the short-term trend of A-shares. Due to the strength of the external market and commodities on Friday, A-shares should maintain a certain level of strength under normal circumstances on Monday. At the same time, related commodity stocks should also maintain a certain level of strength. Personally, I believe that investors need to pay attention to whether the market can continue to show strength and whether the trading volume can continue to expand. If the trading volume cannot expand, one needs to be vigilant. For individual stocks, investors need to pay attention to whether there are new leading hotspots, and at the same time focus on the market situation of the commodity price increase benefiting sectors led by gold stocks. If a situation of increased volume but stagnant growth appears, investors need to be cautious about short-term risks, and closely monitor the trend of the dollar index and the national commodity trends. In a sense, the trend of the market on Monday will determine the short-term market trend. If the market remains strong, the chips held by investors can continue to be held, while waiting for the weakening of the attack force to sell high. Once it falls, attention should be paid to buying low. The overall strategy in the near term is to reduce the cost of positions through selling high and buying low for medium- and long-term layouts. Personally, I believe that as long as the medium- and long-term layout is well set, the subsequent market grasp will be very easy.

"Gold Game" Exchange Platform ("Gold Game" Exchange Email: [email protected], Platform Exchange Purpose: Equality, no threshold, a technical exchange platform where everyone plays together. There are no teachers here, only friends and "warriors". Three types of questions are not answered: 1. Directly consulting individual stocks; 2. Overly sensitive issues; 3. Personal issues): Letter: Big Brother Hao, it is my first time writing to you, and I am a bit nervous. I don't know if I can get your reply. I am a small investor who entered the market before May 30th last year. After experiencing big rises and falls, I realized how dangerous the stock market is, and without skills, one cannot move forward even a step. Thus, I started learning techniques, and your daily three posts are my required reading. Now I have a confusion and hope to get your answer. Given your 'three no-answers', I can only roughly describe my problem. A few days ago, I tracked a stock and found that after the adjustment, it broke above the 5-day line with increased volume, and the MACD indicator was also about to cross above the 0-axis. The next day, although it closed with a negative line, the MACD indicator showed a crossover, and the 5-day and 10-day lines were diverging upwards. Therefore, on the third day, when the stock price fell back to the 5-day line at the opening, I bought into the stock, but that day I got hit with a limit down (due to a significant drop in the market that day). I am confused because according to the indicators, this shape should have the potential for an upward attack. That day, it even rose to over 4%, but then kept falling until it hit the limit down. Why did it suddenly become so weak? Also, I want to ask about the operation method in this case. Another question is like this: the KDJ indicators K and D crossed at a low position, but the J indicator is already around 100. Also, the MACD indicator is about to cross. The next day's movement is crucial. If the stock price continues to rise, the MACD will turn upwards, resulting in a crossover, but the J indicator will inevitably break through 100, triggering an adjustment, thus causing the MACD to die again. If the stock price falls, the MACD will cause a reverse downward trend, forming a refusal to crossover. I would like to ask how to operate in such a situation, especially how to judge during the session. Thank you for taking the time to read this letter amidst your busy schedule. A small investor from Hangzhou, August 20, 2009. Exchange: First, there are two points that must be understood: one is that there is no absolutely accurate technical indicator in the world, only individuals with strong operational capabilities; second is that stock trading is a probability game, so there is never absolute certainty. With these two conditions in mind, transactions based on the 5-day and 10-day lines should come with certain conditions. I summarize these conditions as finding a longer-period directional line besides the 5-day and 10-day lines, such as selecting the 20-day line. When the 20-day line turns upwards and the 5-day, 10-day, and 20-day lines form a bullish distribution and the stock price operates in an upward trend above them or forms a new breakthrough, operations can continue. Conversely, if the stock price adjusts downwards, one needs to look at the support of the stock price on these three lines. If the 5-day line provides support, one can consider holding on, if not, one can consider selling. As for whether the buying opportunity is appropriate, it needs to be judged based on the previous rise, the current market strength of the stock, the short-term candlestick combination, pressure and support assessment, and the judgment of the MACD indicator. Buying when the stock price retraces to the 5-day line and getting hit with a limit down obviously means intervening before confirming whether the 5-day line can provide support, which is a timing error. Besides considering individual stocks, the overall market must also be considered. Generally speaking, when the market has a significant risk of falling, it is unsuitable to intervene, which is a problem emphasized multiple times in "Gold Game" (the advanced application content of the moving average system mentioned above will be detailed in the upcoming "Gold Game III"). Based on the characteristics described above, my personal feeling is that this is a sudden rapid upward breakout followed by a high-position stagnation or failure to break through and then a suppression. Generally, when the overall trend does not support or cannot achieve a breakthrough, it is the time to sell high, not to intervene. This action can mainly be grasped microscopically through intuition on the same day. Regarding the second question, I personally think the key lies in the cycle and purpose of one's own operation. If it is a short-term operation, following the KDJ is safer. If it is a medium-term operation, I personally believe that trends, volume-price relationships, candlesticks, moving averages, and MACD should be given more weight. The characteristic of KDJ is that it works better for short-term applications but poorly for medium-term ones. Moreover, I personally believe that unless one is proficient in using a particular indicator for short-term operations, it is best to avoid the trouble and not use this method for operations. Purchase link address for "Gold Game (II) - Making Money in Bear Markets" and "Gold Game (I) - Profiting from A-shares" on Dangdang: http://search.book.dangdang.com/search.aspx?category=01&key2=%u5360%u8C6A Related thematic articles: Who is demonizing online games