Today, the index closed out of a mid-black candle, falling by -0.82% throughout the day. Today's decline in the index ended the recent short-term volatile market, and the market may usher in a decline in the future.
In fact, judging the future rise and fall of the market is the greatest risk, so we do not make consequence guesses, but analyze the logic of the decline. If you read this article and feel that the analysis logic of the financial report translator is correct, then you should be cautious this week and even in the future. But if you read the article and think that the logic of the decline is pure nonsense, then you can do it the same way.
Let's take a look at the distribution of the market today. Through analysis, we can find that there are as many as 3,678 companies that have fallen today, accounting for more than 74%. However, only 1,286 companies have risen today, accounting for 26%.
Through further analysis, we found that there were as many as 2,673 companies that fell by 0%~-2% today. However, there are only 878 companies with an increase of 0%~2%. The above data is enough to show that today's market is in a general decline pattern, with the bears winning a big victory, while the bulls are losing and retreating.
Seeing that some people here will question that you are analyzing the situation of the market today, it does not mean that the market will fall in the future. This makes sense, but the translator's logic is more than that, so let's move on.
The figure below is the indicator of the proportion of the number of rising companies made by the translator, and we can find that the proportion of the number of rising companies on the 5th has fallen below the 20th, and the proportion of the number of rising companies on the 10th has dropped significantly today. As soon as the proportion of gainers on the 10th of tomorrow or this week falls below the 20-day line, then the indicator forms a bearish alignment.
Once a short alignment is formed, it means that the gainers in 5 trading days, 10 trading days and 20 trading days have fallen at the same time. Moreover, there are significantly fewer companies that have risen recently than in the medium term, and companies that have risen in the medium term are also significantly lower than those in the long term, indicating that the current market is very unhealthy.
Therefore, through the above logic, the translator personally believes that the market may usher in a correction this week, and the index will also fall. But if this happens, it may break this logic and change the future direction of the market.
That is, on one trading day of the week, the index opened with a gap and went all the way up, and more than 80% of the companies in the market were up. and the index opened the week with a gap, then bottomed out and then rose sharply, while still 80% of companies rose. If these two scenarios can occur, it may be able to give the market a dose of stimulant and change the direction of the index's decline.
The above is the personal humble opinion of the financial report translator, not an objective fact, and I hope you can refer to it carefully and pay attention to safety.
Please note: companies with good earnings reports do not necessarily rise. But those companies that can continue to rise sharply must have excellent financial reports.
This article is a pure financial report analysis article, and it is not intended to be recommended, and I hope you can refer to it carefully.