At the end of the day, the three major indexes fell heavily across the board. As of the close, the Shanghai Composite Index fell 0.93%, the Shenzhen Component Index fell 1.54%, and the ChiNext Index fell 1.6%, with 4,850 companies falling in the two cities, and the turnover of the two cities was 582 billion, a slight increase of 7.2 billion from the previous trading day. This is the fourth consecutive trading day that the volume has been below the 600 billion level.
As of today's close, the Shanghai Composite Index has been a daily level of "four consecutive negative". What is even more worrying is that even in the case of "four consecutive negatives", the trading volume of the three major indices has not been released. What does this mean, which shows that the main force is still unwilling to enter the market at the current point to buy the bottom. If the main force does not enter the market to buy the bottom, the main force may wait for a lower price. That means the market may not have bottomed out yet.
Since the Shanghai Composite Index came out of the "guillotine black line" on Thursday last week, my judgment on the short-term trend of the market has been a little bearish.
Last week, the black candlestick broke through the 5-day and 10-day moving averages on Thursday last week
Because Thursday's K-line actually has a relatively large destructive effect on the pattern. And the solid long black candlestick also means the arrival of short-term acceleration. Sure enough, the market has moved in the same way as I predicted in the past two days. Please take a look at the hand-drawn forecast chart I updated yesterday morning about today's trend. I think it's okay to score 80 points on this picture.
A hand-drawn forecast chart for today's movement that was updated yesterday morning
Starting on the first trading day of May, the market index has been running for 35 trading days on July 8 as of today. In the past two months, except for the Shanghai Composite Index, several other major A-share indices have been in a state of continuous adjustment. The length of time for the adjustment is even longer than last year, which is really rare. Where did the A-share cattle go?
Where did the cattle go?
Today, small and micro cap stocks fell again. And the reason for this heavy fall, I expect the market to misread the news again. As we all know, the biggest news at the end of the week was "17 new rules to punish and prevent financial fraud in the capital market". This high-pressure situation has scraped the bones and cured the poison of the capital market, and in the medium and long term, it is absolutely significant and good for the market. However, the short-term market has given a bearish interpretation.
So what will happen to A-shares tomorrow? I think there is a good chance that there will be one last drop in the market tomorrow. The support point of the Shanghai Composite Index is at 2867 points. Why 2867 points? Let's take a look at the picture below.
Daily chart of the Shanghai Composite Index
From the above chart, you can see three information: first, the blue diagonal channel represents the oblique ascending channel that I predicted through the low and two highs, and the lower band of the ascending channel is near 2867 points; Second, if the structure of the five waves of the Shanghai Composite Index falls to around 2867 points, from the perspective of waves, the structure of the five waves will be particularly coordinated; 2867 is a small gap left on February 19 this year.
So, maybe there will be a final drop in the Shanghai Composite Index tomorrow, and once it falls to around 2867 points tomorrow. It is not ruled out that there will be a sharp rebound in intraday trading tomorrow. Therefore, tomorrow's trend will be particularly critical, and I hope that tomorrow there will be a signal of "increasing volume to stop falling" - such as a long-legged doji with large volume.
Today's closing comments will talk to you about this, and the hand-drawn forecast chart for tomorrow's trend will be updated a little later, so stay tuned.
Looking forward to the cows!