This article mainly analyzes the trend of the stock market in the next two years from a medium and long-term perspective.
The market is relatively sluggish now, and it has been falling more and more recently. Investors generally lack confidence and are confused about the future trend of the stock market.
Don’t be afraid of the clouds, only by lengthening the cycle can we understand whether the current market situation is a risk or an opportunity. To see the future clearly is to better grasp the present.
Analysts in the market generally believe that it is a bear market now, and it will not enter a real bull market until after 2025.
This judgment is obviously influenced by Zhou Jintao’s views on the Kangbo cycle. Zhou Jintao believes that 2015 will enter the depression period of the Kangbo cycle, and will end the depression period and enter the recovery period until 2025.
Zhou Jintao’s view that he entered a depression period in 2015 is obviously inconsistent with the actual operation of the world economy, especially the US economy.
I think 2019 or 2020 is more accurate for the start of the recession. The depression period of the fifth Kangbo cycle should be 2020-2030.
The stages of the fifth Kangbo cycle are divided as follows:
Recovery period: 1982-1991
Boom period: 1991-2008
Recession period: 2008-2020
Depression period: 2020-2030
The global economy is now in the early stages of the depression phase of the fifth Kangbo cycle. Although there will be some ups and downs, the depression will continue beyond 2030. The period after 2025 will be the deepening of the global economic depression. Among them, the world will also face a serious economic and financial crisis in 2027-2028.
All countries in the world will be deeply affected by the Kangbo cycle. Although there are slight differences in specific time points, the general trend is the same.
Whether it is U.S. stocks or A-shares, not only will there be no bull market after 2025-2026, but on the contrary, they will enter a long-term bear market.
Let’s take a look at the long-term trend of US stocks.
The U.S. is currently in the early stages of a recession, and in the next few years from now, U.S. stocks will run through the last wave of gains and tops in a long-term bull market. A long-term bear market has officially entered around 2025-2026.
Therefore, although the United States has continued to raise interest rates sharply this year and the international situation is relatively severe, the US stock market has only adjusted by 21%. Not only is it far lower than the declines in previous bear markets, but it is also much smaller than the rapid adjustment in 2020.
The adjustment of U.S. stocks this year can only be said to be a correction on the way to the bull market. The bull market in U.S. stocks is not over yet, and there is one last wave of new highs. One to two years later will be the time when the U.S. stock market will really see a big top.
A-shares can only run the bull market that started in 2019 in the next two years before U.S. stocks enter the bear market, and peak in about 2025-2026.
From the perspective of technical analysis, there are two types of waves in long-term trends.
The first wave type division is the starting point of the current bull market in early 2019.
The current bull market that started in 2019 will run for 5-6 years in total and will last until 2026, with the high point at 7300-7500 of the Shanghai Composite Index. The bull market has already gone halfway up to now, that is, the first wave rises and the second wave adjusts.
Big One Wave: January 2019-February 2021, 2440-3731 points
Big Second Wave: February 2021-April 2022, 3731-2863 points
Big Three Waves: From April 2022 to the first half of 2024, 2863-5200 points
Big Four Waves: First half of 2024-2025, 5200-3700 points
Big Five Waves: 2025-2026, 3700-7500 points
At the end of April this year, the big three waves rose, which lasted for about two years. The high point was at least 4600 points on the Shanghai Composite Index, and if it is strong, it is expected to reach 5200 points.
2026 is the time when this bull market finally hits its peak. After that, stocks will enter a four-year bear market.
The second wave type division is that 2013-2015 is the first wave. Due to the serious distortion of the Shanghai Composite Index, it cannot reflect the real market trend. Here is the Shenzhen 100 Index for analysis.
Big One Wave: 2329-6015 points
Second wave: 6015-2902 points
Big Three Waves: 2902-8234 points
Big Four Waves: 8234-4803 points
Big Five Waves: 4803-about 10200 points
If it is measured by this wave type division, the target of the first three waves of the Shanghai Composite Index above is the high point of the entire bull market that started in 2019, that is, around 5,200 points.
Both types of wave division have their rationale. The first wave type division is optimistic. Out of prudence, we can choose the second division method, that is, the market that started this year is the big five waves.
Note: The wave theory is for reference only, not superstitious. The specifics should be based on the actual trend of the index.
Now, the operation structure of the big third wave or the big five wave is predicted as follows:
Wave 1: 2863-3424 points, from the end of April to the beginning of July this year.
Wave 2: 3424–3000 points, from the beginning of July to the end of September this year.
Wave 3: 3000-4300 points, from the fourth quarter of this year to the middle of next year.
Wave 4: 4300-3800 points, in the second and third quarters of next year.
Wave 5: 3800-5200 points, the fourth quarter of next year – the first half of 2024.
The 1st wave rise and the 2nd wave adjustment of the big five waves have been completed, and the 3rd wave rise is about to start in October.
From the long-term technical indicators of the index, the indicators of the major indexes have been adjusted to low levels.
Among them, the long-term indicators of the Shanghai Stock Exchange 50 and the CSI 300 Index have even fallen below the levels at the beginning of 2019. The technical indicators of the Science and Technology Innovation 50 and ChiNext Index have also been at low levels. After the Shanghai Composite Index came to the fourth quarter, technical indicators will also return to low levels.
As for the dead fork in some long-term technical indicators, in fact, a similar situation has already occurred in history. The indicators seem to be dead forks, but in fact, as the index rises, the indicators also turn up from the dead fork position.
Therefore, long-term technical indicators also support this bull market into a new round of gains.
From the perspective of plate operation, all plates have been adjusted in place.
The blue-chip white horse and liquor stocks began to adjust in February 2021 and lasted for a year and a half.
Some sectors such as the Science and Technology Innovation Board, technology stocks, and financial stocks have even begun to adjust since July 2020, for more than two years.
The adjustment of the new energy sector is also close to a year. As the industry’s prosperity is still at a high level, the adjustment time of new energy stocks is slightly shorter than that of other sectors. At present, the new energy sector has basically bottomed out in stages.
Finally, let me mention the registration system.
The registration system is a major reform of the basic system of the stock market comparable to the share-trading reform in 2005-2007.
The impact of the registration system will be far-reaching, and it will reshape the ecology of the capital market. Quality companies are listed and junk companies are removed from the market. Value investment in the true sense will become the mainstream of stock market investment.
In the long run, the implementation of the registration system is a major positive for the stock market. Only by fully implementing the registration system can the stock market mature and bring more sustainable returns to investors.
The bull market that started this round in 2019 is essentially a registered bull market, from the Science and Technology Innovation Board to the Growth Enterprise Market and then to the main board market soon. Every rise in this bull market is related to the staged advancement of the registration system.
The launch of the full registration system should not be far away, and it can be expected that the stock market will enter a bull market driven by the registration system in the next two years.
Based on the above comprehensive analysis, it can be concluded that:
The bull market that started in 2019 will continue for about two to three years, and the new bull market will start in the fourth quarter of 2022 and peak in 2025-2026.
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