Perhaps it is the continued decline in non-ferrous metal prices that eventually caused a chain reaction in the stock market, on Tuesday, December 9, the stock market index opened with a gap of 2100 points and then continued to decline, and closed at 2037 points at the close, which is almost the lowest point of the day, down 2.54% compared with the previous trading day, and closed out a bald and barefoot big black line.

Although the broad market index rose another 41 points on Wednesday, December 10, closing at 2079 points, an increase of 2.03%, this wave of decline is not over.

On Thursday, December 11, the broader market index fell by another 47 points, or 2.28%, to the level of 2031.

Friday, December 12th.

The broader market index fell another 77 points, closing at 1,954 points, a decline of 3.81%. This closing level has fallen below the 60 EMA at 1956 points.

On the basis of a 5.96% decline on December 11 yesterday, the share price of Liugong Machinery fell by 8.25% on December 12 today, and the closing price was 10.57 yuan. Today's closing price has fallen a full 2.2 yuan from the high of 12.78 yuan on December 8, and has almost fallen to the lowest point of 10.42 yuan on December 2.

Zhang Shaohui originally expected his stock to soar sharply in the third wave of the rise, but he didn't expect that a few days later, the stock price returned from the end to the starting point.

Looking at this result, he asked: "Li Xin, no, the lowest point of the market index on December 2 is 1846 points, from that point to 2091 points on December 8, the upside of the third wave is only 250 points and it will start to pull back, which is not as big as the upside of the first wave." Isn't it said that the third wave will not be the shortest wave? What's going on, has the pullback of the fourth wave begun? Also, one of the three iron laws of the Elliott wave theory you said is that the fourth wave will not overlap with the second wave, but from the trend of the stock price of this Liugong Machinery in my hand, if this wave of pullback is the fourth wave, then the low point of the fourth wave is not only lower than the starting point of the second wave, but also overlaps with the starting point of the third wave and the end of the second wave. In this way, it is a question whether there will be a fifth wave of rise in the stock of Liugong Machinery. ”

Zhang Shaohui's questions made Li Xin stop. It is true that if Wave 3 starts on December 2nd and ends on December 8th, then the upside of this Wave 3 is too small.

Not to mention whether the round of decline from December 9 to today is a pullback of the fourth wave, just from the fact that the upside of the third wave has been greatly reduced, the upside of the fifth wave in the future will not be much. What's wrong with this? Could it be that I'm counting the wrong waves?

Although the above questions were raised by Zhang Shaohui, Wang Minghui and Wang Haoqiang also pricked up their ears to listen to Li Xin's explanation.

The room was quiet, and the atmosphere was rather dreary.

Li Xin carefully compared the trend of the market index in the days after the market index fell below the 60-day moving average support for the first time on November 9 last year, and then said: "In the days after the market index fell below the 60 moving average last year, the market index also showed a sharp correction, you see that the closing point of 5330 on November 8 last year fell below the 60 moving average of 5423 points, the lowest point on November 9 fell to 5217 points, and the lowest point on November 12 fell to 5032 points. The lowest point of 2032 has fallen by a full 400 points from the 60 moving average of 5438 points, which is not a small decline. However, three trading days later, the intraday high of the broad market index actually soared to 5453 points, which is only a single-digit difference from the 60-day moving average of 5462 points. Such a trend shows that there will be a wave of retracement or correction after the broad market index breaks up or down, which is very normal. Today's point has fallen below the 60 EMA a a little bit, which should perhaps be seen as a retracement after breaking through the 60 EMA pressure upward, and may continue to rise in the future. ”

Zhang Shaohui then asked: "Even if this is the case, how much upside will there be in the future? The third wave died down so early, is the future fifth wave worth looking forward to?"

Li Xin pondered for a long time, and then said: "I can't say this well, maybe this wave of pullback from November 9th is just one of the third waves, not the fourth wave?"

Listening to Li Xin's obvious lack of confidence, Zhang Shaohui knew that Li Xin was also a little confused, so he didn't say anything more, but turned his gaze back to the trend chart of the stock in his hand.

Judging from the trend chart of Liugong Machinery, the high point of 12.78 yuan on December 8 and the high point of 12.58 yuan on November 24 are almost on the same level. The downward trend from December 9th to today has made the stock chart show a clear M-head pattern. Once this pattern is formed, there is a lot of room for decline, and it is likely to fall back to the year's low of 7.66 yuan on December 7.

The stock has fallen by two yuan from the high point on December 8 to the current price, and it is too late to regret not grabbing the price difference between the two yuan. Because both in terms of morphology and analysis according to the Elliott Wave theory, the probability of the future rise of this stock is already very small.

However, since November 7th, in the process of rising and correcting this stock, because he wanted to buy high and sell low to make enough difference, he had suffered two big losses, and the result of each operation not only did not spread the cost, but made the number of his holdings smaller and smaller.

Although he has now moved the idea of selling stocks again, he does not dare to act rashly, he is afraid that he will fall into the mud again for the third time.

The trend of the broader market index in the following days is really just like Li Xin said, stepping back on the support of the 60 moving average and then slowly rising again.

Monday, December 15th.

The broader market closed at 1,964, 10 points above the 60 EMA at 1,954.

Tuesday, December 16th.

The broad market index closed at 1,975 points, up 0.54%.

By Friday, December 19, the index reached a peak of 2,038 points, and closed at 2,018 points, an increase of 0.14%, and gradually moved away from the 60 moving average of 1,955 points. This trend seems to show signs of a slow upward trend.

However, if we look at the Elliott Wave theory, which wave of correction from December 9th to December 16th should be regarded as the fourth wave of the pullback, then is the rise from December 16th to 19th the fifth wave of the rise already begun?

Regardless of whether the 4th and 5th waves have appeared, Li Xin feels that the room for the third wave to rise is really unexpected, and from this problem alone, the boundaries of these waves are too vague and far-fetched, and even he can't convince himself. But if this is not the case, then how should these waves be counted?

Monday, December 22nd.

The broader market index fell 30 points, or 1.52%, to close at 1,987 points.

Immediately after, an even more unexpected scene appeared. On Tuesday, December 23, the broad market index opened at 1,990 points and continued to fall, closing at 1,897 points, the lowest point of the day, down 90 points, or 4.55%.

This bald and barefoot long black candle fell below the 60 moving average at 1946 points in one fell swoop.

By this time, Li Xin had already known that he was wrong about the 1st, 2nd and 3rd waves according to the Elliott Wave Theory.

In addition, there is another problem that makes him even more headache: the closing point of 1954 points on December 12 only fell below the 60 moving average of 1956 points by 2 points, which is very small and almost negligible, so in the following 5 trading days, the market index rebounded upward for a period of time relying on the support of the 60-day moving average.

However, today's situation is completely different from December 12, the closing point of 1897 points fell below the 60 moving average of 1946 points by nearly 50 points, and the trend of continued downward trend in the short term has been revealed. So where will this wave of decline fall?

Because from the technical analysis, whether it is the stock price or the market index, the first time it has gained support near the important support line, it has not risen sharply away from this support line, but has turned around again and fallen below this important support line, which is an important sign that the market is about to accelerate its decline. The support line that has been broken through will immediately become an upper line, and under the effect of this upper line, it will be difficult for the stock price or index to break through this upper line again even if it does not accelerate its decline in the short term.

Sure enough, after falling below the 60 moving average this time, the downward trend of the index was very obvious, on Wednesday, December 24, the broad market index opened at 1873 points, and the space for a gap was 1.25%, and by the time it closed, it fell by 33 points, and the closing point fell to 1863 points, a decline of 1.76%. The lowest point of 1850 points in the day is close to the lowest point of 1846 points on December 2, which almost overlaps with this point.