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A Mysterious Data To Determine The Top And Bottom Of The Market

2011/9/30 13:42:00 21

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equity market

It is expected that the market is expected for the future performance of listed companies, and the stock price is a discount price.

Investors expect the future performance of listed companies to do well, and they will buy; if they expect to do worse in the future, they will sell.

Is there an indicator that can predict the performance of listed companies from a macro perspective? Today, Bozhong researcher introduced a simple data, CPI and PPI's "scissors difference", that is, the value of CPI-PPI, to show the overall performance of listed companies, and more miraculous is that many times can accurately judge the top and bottom of the market.

As we all know, CPI is the abbreviation of consumer price index and PPI is the abbreviation of producer price index.

What investors generally understand is just the meaning of the two data and neglecting their intrinsic meaning.

Here we will not explain the written definition of the two data. The researcher believes that CPI reflects the changes in the price of goods paid by consumers, and PPI reflects the price changes in the means of production purchased by enterprises.

That is to say, one represents the consumer and the other is the producer.

If producers sell goods to consumers, they will gain more than their cost, otherwise they will lose money.

Then a simple logic emerges, that is, the difference between PPI and CPI can reflect the profitability of enterprises.

If CPI-PPI is positive, business profits will increase substantially, and the stock market is expected to increase.

Rise

On the contrary, the cost of enterprises can not be effectively delivered to consumers, the profitability of enterprises will decline, or even losses will occur. The company's future performance can not support the stock price, and the share price will fall first.

It is right to judge whether this simple logic is combined with historical trend.

It is easy to see through this chart.

CPI

And the scissors difference of PPI has a strong guiding role in judging the market.

At the same time, we found that the growth rate of CPI data was increasing while the PPI data began to level in June, and these two data are constantly drawing closer.

Thus, in the foreseeable future, the possibility of CPI under PPI data will be very large. Enterprises will get profits again and investors will buy more and more. At that time, the market will really see the bottom.

This is a logic ignored by the market, and it can not be replaced by technical analysis. If you observe the market more and experience the market more, you will find the password to judge the top and bottom of the market.