Chapter 92, stock index strategy

Zuo Yuliang, who retired from Wuliangye stocks, rested for a while, and under the repeated requests of his friends, he had to refocus on the stock market, hoping to start a new road of investment and entrepreneurship in the new year.

After the major adjustment of the stock market in 2018, under the influence of the policy of squeezing leveraged funds and focusing on the development of the real economy, the stock market has walked out of a rare road of correction without a major rebound throughout the year. This year, many middle-class people in the stock market were trapped, many private placements were also bruised, many were forced to liquidate and temporarily withdrew from the stock market, and retail investors were even more bruised and swollen. Therefore, some stock market commentators say that the next stock market era will be the era of completely driving retail investors out of the market. Stock market commentary was so alarmist that at the end of 2018, the stock market fell to a new low, 2440 points.

Originally, Zuo Yuliang thought that the time when the stock market low appeared between 2400 and 2500 points may be in the summer of 2020, but now it has reached this range two years in advance, which makes Zuo Yuliang deeply realize that the popularity of the stock market has been weakened to the extreme.

As for the cyclical trend of the Shanghai Composite Index, Zuo Yuliang has also carefully studied it, and roughly came to the conclusion that China's stock market is basically a slow bull pattern.

The low in 2005 was 998, the low in 2008 was 1,664, the low in 2014 was 1,849, and the low in 2019 was 2,440. In other words, on the whole, China's stock index is moving forward on a slow upward path.

When Zuo Yuliang sorted out the fluctuation range of the stock index in the 15 years from 2005 to 2019, he roughly found such a phenomenon.

From 998 to 1664 points, it took about three years and rose by 600 points, from 1664 to 1849 it took about six years and rose by 200 points, and from 1849 to 2440 points, it lasted five years and rose by 600 points.

Judging from the stock index in the past ten years, the general rule is that every six years or so, the stock index has a cycle of ups and downs, but the lowest point of the increase is about 600 points.

If the 2014 low of 1849 is regarded as an extreme low, and the average index position of the sideways index of this year is roughly calculated at 2000 points, the pattern is more obvious. That is, every six years, the stock index has a rise of about 400 to 600 points from its lows.

Thus, the lows of the index in 2008 are calculated to be in the range of 1,400 to 1,600 points, the low of the index in 2014 is in the range of 1,800 to 2,000 points, and the low point of the index in the range of 2,400 to 2,600 points by 2020. Zuo Yuliang looked at his revised index range conclusion, and had a general direction in his mind, that is, the trend of the Chinese stock index is an upward trend process, so that the trend line formed by the low point of the stock index can be used as a reference indicator for each bottom.

Then, now that the stock index has seen this low range in advance in 2019, then there is a good chance that the Shanghai Composite Index will not go down to this range again, that is, even if the stock index retraces in the future, the low stock price will stabilize somewhere between 2600 and 2800 points, in other words, opening a position in A shares in this range is a range with a high probability of bottoming out.

Since September 2019, the Shanghai Composite Index has been fluctuating around 3,000 points, and it is 200 to 400 points away from Zuo Yuliang's target range.

After Zuo Yuliang finished studying the changing characteristics of the index, he also posted his views to the group. to solicit everyone's views and opinions.

"Ladies and gentlemen, I judge that the probability low of the stock index from 2019 to 2020 is between 2600 and 2800 points, comrades, see if there are any different opinions. Zuo Yuliang sent a message and said.

"Brother Zuo, I haven't dared to buy stocks since Wuliangye was thrown away! Hu Weiyong sent a message and said.

"Don't worry, I'm also trying to find clues, and if you want to make money in the stock market, you have to be safe. Zuo Yuliang sent a message and said.

"Also, Brother Zuo, is CTI out of the company that followed you to build a position last time?" asked Liu Pengfei in a message.

"Not yet, I still continue to hold shares, but I don't recommend everyone to follow up!" Zuo Yuliang sent a message and said.

"It turns out that Brother Zuo, you still have a position, no wonder you are so determined?" Hu Weiyong said in a message.

"I bought it in March last year, and it has been more than a year, and this stock has risen a lot, but I still have to work hard to increase tenfold!" Zuo Yuliang said in a message.

"It's terrible, Brother Zuo, you either don't buy stocks, or you want to buy stocks that have risen tenfold, it's really a bull!" Hu Weiyong said in a message.

"Hehe, this is persuasion! You have to do your homework before buying stocks!" Zuo Yuliang said in a message.

"Brother Zuo, do you have any target stocks now? Let us experience the feeling of riding a bull?" Hu Weiyong said in a message.

"It's still in research, I want everyone to help think about it, at the moment, some of the sectors and stocks I was optimistic about before have risen greatly, and it's not a good time to buy the bottom!" Zuo Yuliang said in a message.

"Brother Zuo, how can we help?" asked Hu Weiyong via message.

"It's best for everyone to divide the labor, each person pays attention to the performance of a major hot sector and some major sector leading stocks, and then we summarize together, and then we discuss the selection of stocks that may be bull stocks, and then we choose the opportunity to open a position to buy. Zuo Yuliang sent a message and said.

"I agree with this, but the question is how do we divide the labor?" Hu Weiyong asked in a message.

"What I mean is that we will first collect the main hot sectors at the moment, and then make a decision after careful study in combination with the relevant stock market policies since the beginning of this year. Zuo Yuliang sent a message and said.

"That's fine, everyone has the money to contribute, and you have the strength to contribute! I think I'll be a vanguard! When you've studied the stocks, I'll take the lead and test the water first, how about it?" Hu Weiyong said in a message.

"Hehehe, this is the best, then Hu Wei will be the guinea pig if you hug you, don't cry when the time comes!" Liu Pengfei sent a message and said.

"It's normal to buy stocks and eat traps, the key is not to be trapped. Zuo Yuliang sent a message and said.

"What Brother Zuo said makes sense, even if it's a set, I won't complain. Hehehe. Hu Weiyong sent a message and said.

"At the moment, the stock index is fluctuating around 3,000 points, constantly consolidating in a narrow range, which is obviously not an ideal bottom-buying area!" Zuo Yuliang said in a message.

"Then Brother Zuo, where do you think you should enter the market and buy the bottom?" asked Hu Weiyong in a message.

"My biggest question now is whether the 2,446 point I saw at the beginning of 2019 is the stage low of this round of stock index correction. Originally, I concluded that the low point of this round of stock market correction should be in the summer of 2020, and now the stock index has fallen to this range a year earlier, which makes me have some doubts about my previous judgment for a while. Zuo Yuliang sent a message and said.

"I also studied the law of change in the low point of the stock index mentioned by Brother Zuo, but strictly speaking, I didn't find that it will follow a certain law in time. The lows do not seem to be equidistant, or they must be several years, but the general rule is that the time interval between the lows tends to increase gradually. For example, there are three-year intervals, six-year intervals, five-year intervals, and so on, but the length of time is not equal!" Liu Pengfei said in a message.

"That's right, Pengfei, I'm just entangled in whether we are waiting for the window of time to appear to buy stocks, or waiting for the window of the low point to buy stocks?" Zuo Yuliang asked in a message.

"I think it's better to wait for the window for the low to appear and buy stocks, which is more flexible. What if by 2020 the stock index rises instead of falling?

"Well, what you say makes sense, I'll think about it again. Zuo Yuliang sent a message and said.

"Brother Zuo, even if the stock index falls to the low point of the stock index you mentioned, what sector of stocks should we buy?

"That's what we're going to solve next, but the general direction is to stick to my previous standard for buying stocks. It must be a leading stock in the industry with a low price that has fallen too much!" Zuo Yuliang said in a message.

In this way, through discussion with everyone, Zuo Yuliang first solved the doubts about the stock index in his heart, and then he had to solve the problem of choosing plates and stocks, which is the real problem that will allow them to make money in the future.

So how to find the sectors that are worth building positions and the individual stocks that are worth building positions? Zuo Yuliang began to think and observe again.