Summary:: Everything has ups and downs, and there will be cycles, from the formation and operation of various stars to the birth, aging, sickness and death of each life, whether it is a real thing or a virtual law, it all exists in the cycle of reincarnation. Whether it is the market, life, or historical development, it follows a certain cyclical law, that is, everything is a cycle. There are also different cycles in the market, especially the existence of strong and weak cycles, how to identify the strength of the cycle?
Previous review: "Homeopathic Timing Strategy" The three elements: quantity and energy, trend, and space will have ups and downs, and there will be cycles, from the formation and operation of various stars to the birth, aging, sickness and death of each life, whether it is real things or virtual laws, they all exist in the cycle of reincarnation. Whether it is the market, life, or historical development, it follows a certain cyclical law, that is, everything is a cycle.
There are also different cycles in the market, such as bull and bear cycles, emotional cycles, theme cycles, operation cycles (strength and weakness cycles), etc., in terms of judging the strength and weakness of the cycle, in fact, the Yimeng** hand Zhiying version has been involved, that is, the use of the weekly ** line state to identify the strength of the cycle. When the weekly ** line is in the red holding state, it is a strong cycle, and when it is in the blue holding state, it is a weak cycle. (You can also judge whether the weekly ** line is in a red holding state by whether the Longteng activity indicator shows a red background on the daily line).
In a strong and weak cycle, depending on the cycle they are in, investors are often faced with a choice: should they chase strong stocks, or stick to weak stocks? True wisdom, however, is not to blindly strive for strength, but to defend the weak and attack the strong at the right time. This is not only an investment strategy, but also an investment wisdom.
Weakness: Look for undervalued ** from the weak cycle
In the weak cycle, the overall trend of the market is weak, most of the performance is unsatisfactory, the more suitable investment strategy is to take a light or short position and try not to operate to avoid the risk. However, it is in such an environment that the value of some ** is gradually highlighted. Investors should focus on the study of company fundamentals. By analyzing the company's financial statements, industry position, competitive advantages, and other factors, look for companies with solid fundamentals, stable performance, and high dividends. Due to the overall poor market environment, these ** have a higher margin of safety compared to other varieties due to their lower valuations, and also provide investors with better low** opportunities. Investors should keep an eye out for these low valuations**, which are expected to be restored once the market environment changes, providing investors with strong returns.
Therefore, the meaning of "guarding weakness" here is not to stick to weak stocks, but to discover undervalued value stocks in the weak, and to keep lonely and calm in the weakness, and patiently wait for the bottom of the market and the arrival of the best opportunity.
Attacking strength: looking for high growth in a strong cycle
In contrast to weak cycles, the overall trend of the market is strong in strong cycles, and most of the best ones have performed very well. In a strong cycle, investors need to be more vigilant about market volatility and risks, while looking for high growth**. In a strong cycle, investors should focus on emerging industries and industries with future development potential. Through in-depth research on industry trends and policy environments, we look for those industries and companies with high growth potential.
In addition, in strong cycles, some leading stocks tend to outperform the market as a whole. Investors should pay attention to these leading stocks and choose the right time to attack, as they can expect to achieve strong alpha. At the same time, it is also necessary to pay attention to controlling the ** and risks at critical moments to avoid excessive chasing losses due to gains.
When judging the strength and weakness of the market, we use the state of the weekly line to make a basic judgment. Sometimes there are some special circumstances, such as the index is in a state of being in a state of weighted stocks, but it is in a state of relative activity for the majority; Or **index is in a state of **, with heavyweights leading the index, but ** is generally in a weak state. Therefore, in judging the strength of the market, we cannot judge the operability of the market at that stage only by the rise and fall of the index. In order to allow investors to more effectively identify these special situations, the new version of IMON** Hand-Master Edition judges whether the market cycle is worth operating by stating the state of **20-day and 60-day** in the market. When the number of people on the 20th is more than the number of people on the 60th, it is a relatively active stage for the bulls to control the market, which is a more suitable stage for operation. And when the number of the 20-day stand is less than the number of the 60-day stand, this is the stage of bears' control, and the general weakening is not suitable for operation.
In short, the key to defending the weak and attacking the strong is to seize the cyclical changes in the market. Look for undervalued stocks in weak cycles and wait for the right opportunities, while looking for leading stocks and high growth in strong cycles and attack at the right time. Through this strategy, investors can be invincible in the unpredictable** and maximize investment returns.