Afternoon Delight Pump Drives PSEi Over 7,900 as PER Soars to 1997 Levels!

Corrections or profit taking sessions are not to be permitted.

Events of 2H 2015- 1Q 2016 have so traumatized the bulls such that each time a loss occurs the response has been an impulsive frenzied bidding spree!

Last week’s .75% pause has only spurred a two day of manic buying streak which pushed the PSEi up by 2.12% to break the 7,900 threshold!

And because stocks are not only about prices but about valuations, the official PER (based on the average) has likewise vaulted to 26.25! Such has now passed December 1996 level!

Meanwhile, the market cap weighted PER has now crossed the 27 threshold or at 27.09 (based on Friday’s market cap weights)! Such highlights also the return to 1997 levels!

From a low of 6,100 to PSEi 7,900, in the 2014-2015 episode, such was attained through a 13+ month pumping process. However in today’s dynamic, or in the 2016 counterpart, the journey from 6,100 to 7,900 has been accomplished in less than 6 months!

Hence, the time interval to hit present levels had been cut by more than half! Or the PSEi has jumped by 5.4% each month since the low of January 21, 2016!

Therefore for present participants, such activities are emblematic of free lunches! And vertical price actions suggest of deepening and intensifying expectations of even more free lunches!

Of course, it was not just about manic bidding today.

With present PSEi chart ominous of a bearish rising wedge formation, today’s actions seemed engineered to prevent this formation/pattern from happening.

So the massive push to break the formation!

How was this accomplished? Mostly through the afternoon delight pump! 

 

Marking the close wasn’t such a big issue today (being marginal). Instead today’s forceful pumping was channeled through the post-lunch break “afternoon delight” operations!

Understand that for the PSEi to move steeply higher, this requires sharp upward movements in several key or heavyweight issues. So post lunch “afternoon delight” pumps have simply signified a coordinated push on such index sensitive issues.

Lunch time break must have been used for planning for an end of the day operation. The idea is to generate a bandwagon effect from the rising headline index.

Today’s actions have not been isolated.

Here are examples of post lunch afternoon delight pumps for each month since January 2016. These are frequent activities.

The point here is that neither have these been coincidences nor has these signified spontaneous market activities. Instead they represent coordinated-collaborated pumps designed to bolster the headline index. They are part of syndicated moves from several entities who has been desperate to see the Phisix top the 8,100 level.

Yet in many occasions, these afternoon delight pumps have been accompanied by marking the close.

So the present vertical moves have not only been due to a simmering mania but also augmented by manipulations!

To be repeat, even if the PSEi has yet to match or top Apr 2015’s 8.127.48, developments at the PSE has represented watershed history unfolding before our eyes.

Such breakthrough can been seen via vertical price actions of key issues (like SMPH’s stunning 3.89% leap today) combined by accelerating landmark excesses in the context of valuations!

Curiously the current pumping dynamic comes even as the peso continues to flounder. And the pesos’ weakness looks more about domestic rather than a regional influenced phenomenon.

Yet all actions have consequences. And in the world of scarcity, there is no such thing as a free lunch. So inevitable costs lies ahead to what seems as the perpetuity of free lunches today.