As I have been saying, stocks have become an entitlement. Since rising stocks have been perceived as a “right”, stocks therefore must rapidly ascend...and climb eternally.
You see, the consensus have come to believe that asset inflation equals wealth. They mistake paper wealth with purchasing power wealth. Or they confuse bubbles as real wealth founded on an increase in purchasing power from capital accumulation.
And as privilege, since last year's crashes have only traumatized immensely the consensus, and since corrections may pave way for crashes, hence corrections must never ever occur.
So every incidence of correction has been envisaged by violent price pumping.
Yesterday’s marking the close dump .31 must not to be tolerated.
So in retaliation to yesterday’s profit taking, manipulators and the consensus bulls had to ensure that there would be no hurdle on 8,100, by hook or by crook!
So the synchronized afternoon delight pump was activated immediately during the post lunch break.
And such frenzied buying had to be punctuated by a price fixing, marking the close pump.
The market intervention phase that leads to the runoff period consumes about 6 minutes. During such transition, no trades are done but prices float to match bid and ask. The industry has learned how to game the system through such trading "limbo" quirk. Price fixing has become prevalent only since the 4Q of 2014.
As shown above, price fixing goes on both directions. However, the upside fix have been the most common.
And since marking the close contributed to 38.5% of the day’s torrid .95 spike, three of the top 10 PSEi issues delivered the meat of the price fixing returns.
Curiously, despite the sizeable headline gain, decliners led advancers 100-93. This implies that the broad markets departed from the activities of the PSEi 30.
And at today’s 8100, the average PER have soared to 27.08 while the market cap weighted PER zoomed to 27.9 a TWENTY YEAR HIGH!
Yet such manic pumping implies that either stock prices have become totally detached from reality or 2Q eps growth must have skyrocketed. Given the historical template, my guess is the former.
To reiterate, history is in the making, not because of the headline index, but because of extent of grotesque valuations reached, the intensive mispricing, the sheer degree of recklessness as expressed by vertical prices, the total evisceration of risks, the extreme or lopsided scale of misperceptions which are basically manifestations of hardened convictions of a one way street or the delusional attainment of paradise, and importantly, the massive and brazen manipulations of stock prices and stock price index.
Such phenomenon occurs ONLY in the Philippines!
Tokyo listed Nintendo share prices recently skyrocketed due to the introduction of augmented reality game Pokemon Go, which took the gaming world by storm. After the initial surge (more than double), Nintendo’s shares appear to have met reality.
Nintendo is a single stock. The vertiginous climb must have been due to dislocation—markets were surprised by the world’s maniacal reception to the game. After the initial “digestion”, markets seem to be reappraising Pokemon’s financial contribution to Nintendo. Hence the sharp volatility.
But the developments at the PSE have been different! Vertical price actions have gripped more than a third of the issues of the PSEi 30!
And such price bidding fury has not been out of fundamental shocks, but from delusional belief that paper asset wealth equals prosperity and privilege.
Or the belief in attaining something out of nothing. Price fixing represents merely an icing to the cake.
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