How to judge the peaks and valleys of stocks? Can you be specific?

Although we don't pursue buying at the lowest point and selling at the highest point, at least we shouldn't buy at the highest point or sell at the lowest point, so we need to know the peak and trough areas where the market is located. Technically, wave theory can be chosen, but its weakness is obvious. First of all, this theory has no theoretical basis and belongs to the theory of imagination. Secondly, according to the conditions of this theory, there will be many possibilities, and different possibilities will often lead to contradictory conclusions.

The key element of the market is listed companies, and the performance of listed companies is an important part of the macro-economy, so listed companies can serve as a bridge between the stock market and the macro-economy. The market index is calculated by the share price of listed companies, and the index that can best reflect the performance of listed companies and the change of share price is the price-earnings ratio. Therefore, we can take the average price-earnings ratio of the market as the basic starting point to judge the peak and valley of the market. ?

Although the average P/E ratio is published by the exchange every day, it is static, and what we need is dynamic P/E ratio. It's just that it's difficult to calculate the dynamic P/E ratio. Some studies use all the expected earnings of listed companies this year to calculate the dynamic P/E ratio this year, but the deviation of expected earnings will affect the accuracy of the dynamic P/E ratio. We can also use the latest report data to calculate the dynamic P/E ratio. For example, we can now calculate the P/E ratio through the published quarterly report, but it is still difficult to calculate the annual income from one quarter, and we must never simply multiply it by 4. Even if the semi-annual report data is about to be released, the same problem will exist. Therefore, a new way of thinking is needed to calculate the dynamic P/E ratio. ?

Because the expected GDP of each year will become more and more accurate with the passage of time, it is feasible to calculate the growth rate of the overall performance of listed companies through GDP. Add the static P/E ratio announced by the exchange to the expected profit growth rate of listed companies, and you can get an approximate dynamic P/E ratio. Considering that there are some large blue-chip stocks in Shanghai stock market, the average P/E ratio of Shanghai stock market is more representative. According to the statistics of the exchange, the recent P/E ratio of Shanghai Stock Exchange has reached 30 times, and this year's GDP target is to guarantee eight. However, because a large amount of GDP is driven by government investment, the average growth rate of listed companies' performance may not reach the GDP growth level. In a conservative sense, we give listed companies an average growth of five points, so that the dynamic P/E ratio is basically close to the static P/E ratio.