For the seventh straight session the Phisix posted gains of 28.55 points or 1.41% which evidently had been back by heavy volume by mostly overseas capital. During the said period foreign buying totaled P 1.808 billion or about 18% of total turnover where foreign activities, the dominant participant, accounted for about 58% of cumulative turnover.
In seven consecutive sessions the Phisix accrued gains of almost at 9.4%! The last time a similar brio was exhibited by the local market was in early June of 2003 which incidentally was two years ago! And by the same token, the drivers of the market had been the same participants…foreign capital! It does seem like the Phisix’s is celebrating its second anniversary of its advance phase! (Well is it?)
While, to quote Mark Twain, ``History never repeats itself; at best it sometimes rhymes”, the ‘ice breaker’ or the initial salvo or the backbone of the Phisix’s two year ‘ascent’ which in the past I have coined as the ‘Baon ni Gloria’ rally (as the rally came a week after PGMA’s state visit to the United States) was during the first half of June 2003.
Happy Second Anniversary
Let us reminisce with the chart above. The ferocious foreign driven rally in June of 2003 as you can see recorded 20.68% gains in 14 days (!!!) before retracing by as much as 27% of the gains incurred. After two months of consolidation or rangebound trading, the Phisix got its second wind to breakout from the range. The rest is history.
Now this is NOT to suggest that the same instance WILL occur outright, but this is to propound that IF the market dynamics remains on a SIMILAR wavelength as that in June of 2003 which was bizarrely seen last week extending until today, exactly two years ago, then the probability is for the Phisix to be in ‘rhyme’ with the 2003’s movements.
Now of course, a correction is imminent considering the rather fast pace of the recent climb, however for as long as the intensity of the foreign driven buying activities persists, any hiatus would most likely be mild or moderate.
While I do not exactly know or can pinpoint WHEN the pause will come, when it does, it should be interpreted as a buying opportunity in preparation for the next leg up (which I think would come as the FED does apply the brakes-most likely in August or September).
As legendary trader Jesse Livermore (Reminisces of a Stock Operator) once said `` the big money must necessarily be in the big swing. Whatever might seem to give a big swing its initial impulse, the fact is that its continuance is not the result of manipulation by pools or artifice by financiers, but depends on underlying conditions. And no matter who opposes it, the swing must inevitably run as far and as fast and as long as the impelling forces determine.”
In a bull market, the ideal thing to do is to stay long to maximize profits. In a bear market to be in cash to minimize losses. In a trading market, trade the support resistance levels, in the assumption that one can catch the peak and troughs. The recent manifestations of the market is bullish in backdrop rather than a trading market.
That's the way it looks for now.
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