Bottom fishing and stock trading is a common desire of every investor, but when is the bottom? Many investors may not be aware that they should buy at a low price, but the stock is still falling. Today we will introduce the signs before the stock bottom arrives, for reference only.
1. The policy bottom appeared before the market bottom, and history has proven this.
Because the policy bottom occurs when the management recognizes the overall market position, the government will introduce a series of policies to rescue the market and avoid further market weakness from having a negative impact on the real economy. When the market's confidence is restored after the policy is introduced, the trend of market operation will be reversed, and the policy bottom will be formed. In the subsequent long short game, multiple forces will dominate, and the stock market will start to rise, forming the market bottom.
2. Quantity comes before price, and land quantity is determined by land price. Every market bottom in history was formed after the appearance of land quantity.
The emergence of land volume indicates that the market has been extremely sluggish, and investors have lost confidence in the market and are no longer paying attention to stocks. Land volume also occurs during the process of market oversold, when the prices of the vast majority of stocks will be far below their value. Buying stocks will exceed their value, which will inevitably attract main capital to flow into the stock market. It is also very suitable for main capital to enter the market. Once main capital re enters, a bottom will be formed.
3. The market must experience another round of panic after a downturn.
As the saying goes, long positions never die, short positions never stop. That is to say, if the power to go long still exists in large quantities, there will be divergence in the stock market, which means that the stock market has not yet bottomed out. The bottoming out must occur when the market experiences panic and investors are desperate, at which point the market can be reborn from the ashes. Buffett's saying, 'When others panic, I become greedy; when others become greedy, I become panicked.'.