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.
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