Another black swan. Livermore: 4.2 Review Record

Briefly summarize today’s market.

[Taoguba]

The conflict is escalating. Today’s market action stems from Trump’s stance toward Iran this morning. In short, it’s because an agreement can’t be reached. Over the next two to three weeks, there will be a fierce onslaught—bombing Iran back into the Stone Age. In addition, both naval and air strikes were actually carried out, leaving land combat as the remaining scenario. Whether this is truly the case is something nobody can confirm for now.

Today’s broad selloff is exactly due to this. No one could have predicted that these statements would have such a strong influence on the market. After all, in the past few days, market participants believed the situation had been de-sensitized, and that the market would then follow its original trajectory. Instead, today turned into another major drop, dealing a serious blow to market confidence.

Does the market still have the momentum to rebound? We’ll need to observe tomorrow. The market today originally wanted to stage a strong rebound and trade an independent pattern. Looking at the performance of the North China Securities 50 this morning—it was already the first to surge sharply. These funds are relatively sensitive: whenever they believe there is an opportunity in the market, they always pull the market up first. If tomorrow can still see a rebound, it means the market is still fairly stable in this phase. If the market fails to rebound tomorrow, then you should go to cash and take a break, and only after the market is fully de-sensitized should you start to make moves.

Tomorrow is Friday. After that, there will be a three-day market closure for the weekend and Qingming. With the situation in the Middle East changing and many things that can’t be determined happening, tomorrow’s funds likely still won’t choose to push up the market. What we need to watch should be whether the market can be kept steady. In this phase, no one will have it easy when it comes to trading. So only in peaceful times can things feel secure. Thankfully, the strength behind us has allowed our lives to be steady and safe.