This week's market has not seen dramatic changes, still following what was discussed in Hunter's article on Monday. The 88000 level has been briefly broken down, and we are currently in a sideways consolidation.
Some friends who listened to Hunter's advice and opened short positions during the pullback to 88000 may be feeling quite tormented today. For two consecutive days, Tuesday and Wednesday, the market has been hovering around 88000, providing some profit, but without taking action, that profit is now almost gone. It's a situation where it's neither enjoyable to hold nor easy to let go, truly a dilemma.
Today's article aims to inform everyone that this kind of torment is not targeted at you, but rather an essential part of the current market adjustment process. In other words, if this phase of hovering and torment did not exist, and the market directly accelerated downward, I would not dare to continue holding short positions for the long term, as it would mean this round of decline has ended prematurely.
This round of rebound started from 80600 last Friday, breaking through the 88000 resistance on Monday evening, with a peak at 89000 before pulling back, maintaining the sideways movement around the 88000 level.
From a market perspective, consider that the 88000 resistance has experienced three days of high-level hovering without effectively showing a one-sided decline. This suggests that the consensus resistance at this position has weakened. If it was just a test, whether it was a brief break or a direct pressure drop, it could basically be determined at a glance that this is a top-bottom conversion pressure. Now, with multiple rounds of hovering, the recognition of the pressure has been dispelled, and naturally, there is no concentrated shorting. From the bulls' perspective, as the consensus pressure weakens, there is an opportunity for a breakout to the upside, especially during the pullback phase, where the previous 85000 top-bottom conversion support level will attract new long positions to come in.
From a technical perspective, the BBI long-short index line has previously experienced eleven consecutive declines, leading to a serious divergence. The current sideways movement is a way to exchange time for space, extending the consolidation period to allow the indicators to be repaired and adjusted, returning to normal levels before continuing a new round of decline.
On the average K chart, after eleven large bearish candlesticks, a series of doji candles appeared at the low, indicating a continuation adjustment during the decline. After the adjustment is complete, a new round of decline will begin.
On the short term, the downward trend line was already broken on Monday. According to common logic, the downtrend should have ended, and the market should continue to accelerate upward. At the very least, the consolidation should be above the trend line. However, the current situation we see is that it is hovering near the trend line, meaning that although the trend line resistance has been broken, the market has not generated bullish momentum, indicating that this is the end of a strong push.
From Hunter's perspective, this adjustment should be viewed in reverse. It alleviates the market's panic while giving hope for a bullish rise. Naturally, the bears will face torment recently. Essentially, it does not allow you to comfortably hold short positions, urging you to take profits quickly. Once you exit, the market will naturally begin to decline. During the decline, levels like 85000, 83000, and 81000 can continuously entice a new batch of bulls to come in as fuel. The core message is that the more comfortable a position makes you feel, the greater the suspicion of a trap; the more uncomfortable a position makes you feel, the more it proves that your opening direction is correct.
Now, let's summarize all the information. The subsequent market trend is clear. According to the average K theory, we are currently in a continuation adjustment during the decline, so the downtrend has not changed.
Based on the broken short-term downward trend line without the emergence of bullish momentum, combined with the BBI long-short index line gradually moving down through consolidation, it is determined that we are nearing the end of the adjustment and will soon start a new round of decline by the end of the week.
Therefore, tonight's market will gradually start to decline from the 88000 level, encountering some resistance around 85000, and then extending to 83000-83500. In the next couple of days, as long as you see the price reach 83500-83000, you can be sure that you are on the right track and just wait for the subsequent decline. For the current short positions at 88000, pay attention to reducing positions at 85000-85500, and wait for the market to hover and consolidate around 83500 before increasing short positions after the consolidation ends and breaks below 83000.
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