Currently there are many different opinions on the future trend of the stock market, and a considerable number of investors believe that there will be no good investment opportunities in the next few years. Pessimism still surrounds the market.
The reason why many people are not optimistic about the future stock market is that the adjustments over the past year have caused many people to lose confidence. Coupled with the negative impact of various major events such as the epidemic, international conflicts, the United States rate hike , etc., it has made investors even more confused. Emotions like
are actually typical psychological characteristics in the bottom area of the market.
let history tell the future. By reviewing and analyzing the trajectories of domestic and foreign stock markets, we can discover objective laws, and then let us see the future clearly, so as to better grasp the present.
Let’s take a look at the similarity with A shares from the US stock and the Taiwan stock market historical trend chart respectively:
Shanghai Index trend monthly chart
I have analyzed the previous article that since 2007, A-shares have been in a long-term cycle wave IV wave, which has lasted for nearly 12 years, and it was not until January 2019 that the cycle wave IV wave ended. Wave IV is divided into five waves ABCDE, as shown in the figure above.
Let’s take a look at the long-term trend of US stocks
Dow Jones Index centuries-old historical trend chart
Dow Jones Index was consolidated from 1966 to 1982. The US economy was in a period of recession and depression in the past 16 years, which is very similar to the current situation. The 3-4 in the above figure is also divided into five waves. The current position of A-shares is similar to the arrow in the figure, which is the starting point of the bull market that has lasted until now or lasted until 2000.
Let’s take a look at the historical trend of the Taiwan stock market in the past 30 years
Taiwan weighted index annual line chart
Shanghai Composite Index annual line chart
Taiwan stock market entered a bull market in 1985 and ended in 1990. The Taiwan weighted index rose from 636 points to 12682 points. The bull market of A-shares from 2005 to 2007 is similar to that. After
, the Taiwan stock market entered a period of adjustment for nearly 19 years, and it was not until 2009 that a new round of long-term bull market began. After 30 years, the Taiwan weighted index finally broke through the all-time high of 1990 in 2020 and rose to 18,000 points.
A shares were similar to the E-point above the Taiwan weighted index in January 2019, which is the end point of the IV adjustment in more than 11 years since 2007.
At the end of April this year, the Shanghai Composite Index was 2863 points similar to the two points marked in the figure below in the figure of the Taiwan Weighted Index, which ended the sophomore wave adjustment and entered the main bull market upward stage.
Taiwan weighted index trend chart
U.S. stocks 1966-1982Dow Jones Index has always hovered around 1,000 points in the past 16 years, which is very similar to the long-term fluctuation of A-shares at 3,000 points after entering a bear market in 2007.
The bull market in the US stock market started in 1982. Who would have thought that it would rise to 11,750 points in 2000, and at the beginning of this year it was as high as 36,952 points.
The 19-year downturn in the Taiwan stock market also brought about a bull market that lasted for 12 years in 2009.
So, there is no need to be pessimistic about the A-share trend.
Learn from history, the A-share cyclic wave IV adjustment that lasted more than 11 years has completely ended in early 2019. Moreover, the big wave and the sophomore wave, which still fluctuate greatly in the early stages of the cycle V wave, have also completed the big wave and the sophomore wave, which are still fluctuating greatly in the early stages of the cycle V wave, have also been completed in February 2021 and at the end of April 2022 respectively.
is now entering the third wave of the circular V wave, which is also the main upward wave of in the bull market.
This year, it mainly runs wave 1 and wave 2 of the third wave, and is generally a slow bull trend. Because the trend is slow and fluctuates from time to time, investors often mistakenly think that it is just a bear market rebound. In fact, it is a stage of accumulating momentum for the future main upward trend.
This bull market that began in 2019 will eventually hit a record high. The Shanghai Composite Index is expected to hit 5,000 points again within two years, and will reach 7,500 points in about four years.
The following is an analysis of the stock market operation structure:
The stock market was established in 1990, but the complete analysis should start from 1949.
Long-term cycle wave:
cycle wave Ⅰ: 1949-1966 , 16
cycle wave Ⅱ: 1966-1978 , 12
cycle wave Ⅲ: 1978-20 in 2007,
cyclic wave Ⅳ: 2007-2019 , 2012
cyclic wave Ⅴ: 2019-2026, 7
cyclic wave Ⅴ For detailed analysis of cyclic waves, see the article on May 12 "Now is in the cyclic wave V-wave stage, the bull market ends in 2026".
Circular wave Ⅴ wave five big waves:
Big one wave: January 2019-February 2021, 2440-3731 points
Big two wave: February 2021-April 2022, 3731-2863 points
Big three wave: April 2022-Second half of 2023, 2 863-5200 points
Big four waves: Second half of 2023-end 2024-early 2025, 5200-3700 points
Big five waves: Early 2025-mid-2026, 3700-7500 points
Big four waves are predicted as follows:
1 wave: around 2863-3700 points. The goal of Wave 1 is to recover the decline of the sophomore wave. It will be completed mainly in the second and third quarters of this year.
2 wave: 3700-3300 points, about the third and fourth quarters of this year.
3 wave: 3300-4300 points, the end of this year to the first half of next year.
4 wave: 4300-3800 points, mid-next year.
5 wave: 3800-5100 points, second half of next year to first half of 2024.
is now at a historic bottom and is also the starting point of the main upward wave of the bull market. Dear friends, we must seize the rare opportunity to make a low-level layout.
