Easy come, easy go.
And just like that RECORD Phisix, which has been glorified by the establishment as some kind of a newfound paradise, has vanished!
The Philippine benchmark sank by a nasty 2.16% in today’s session.
Had the late session combo of afternoon-delight and “marking the close” not been deployed by index managers, the losses would have been a lot deeper (chart from colfinancial)
Today’s actions resulted to some heavy technical damage on the headline index.
The bears had not only overwhelmingly toppled the last vestige of the 2015 record at 7,400, but likewise fathomed the 7,270 level going into the last minute before the pumps had been activated.
This means that the 7,350 support level which used to be the resistance, has even been ruptured.
Curiously only the holding sector delivered the gist of the “marking the close” pump which reduced the headline losses.
Has index managers been losing ammo?
I always say here that the 'obverse side of every mania is a crash'. While today’s actions may not signify a technical (5%) crash yet, emergent signs have pointed to the rising risks of crash.
Of the top 20 actively issues, issues that posted quasi crash-like scale of losses of 4+% numbered 7—where 6 of them are part of the PSE basket! (chart from PSE). And some of those ending % numbers have been eased from the near session end pump.
This only means that today’s actions have brought many index stocks—that had been forcibly pushed to record highs—not only away from their record levels but on course to the bear market zone (20%+ loss).
In other words, the more members the bears’ recruit into their fold, the harder it is for the headline index to recover.
This means index managers have much work cut for them as the back jobs pile up. They also have lesser and lesser room to work with.
The grizzly bears dominated almost entirely today’s activities.
Aside from the carnage seen at the sectoral index level (see left column), market internals reveals that the bears (losers) nearly effaced the bulls (gainers) by a stunning 5 to 1 rout (right column)!
This 121 variance marks the second biggest margin for the year in favor of the bears. The biggest was on May 26 with 130 when the index fell by only .43%. Then the diminished headline loss was due to the massive last minute pump by index managers which erased 51% of the headline losses.
Yet the difference between May 26 and June 9 has been in the degree of losses! So losses have not only been quantitative but likewise qualitative or the broad losses of today had been bloodier than the May 26 contemporary!
And it’s just amazing to see how index managers continue to amass losing positions just to prop the index!
Yet the narrowing time period of the incidences of bearish dominance (seen via the wide margins in favor of losers and deepening losses) could most likely signify as growing signs of recognition that bearish forces have been gaining strength and momentum.
Besides, bears have practically ruled PSE activities even during the manipulated string of record run where MORE than half of the population of listed stocks have been at bear markets (most of them since May 2013)!
Yet April 10’s record at 8,127.48 has represented nothing more than a targeted pump on a few issues that carry the biggest market capitalization and therefore the biggest weights or influence on the Headline index.
Additionally, the convergence of bearish forces, specifically, deteriorating market internals, diminishing volume (bids), the heavily skewed activities towards the biggest market movers and chart formation, as I recently pointed out, has interestingly foreshadowed current developments.
I know: NO trend goes in a straight line.
And given the oversold conditions, one should expect sharp bounces as well. Volatility in both directions should be expected to get amplified as the current stage should mark the culmination of the denial phase.
And once headlines (market signals, economic and financial numbers) rule in favor of the bears, denial will segue into fear and desperation where losses steepen as bids vanish.
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