Season of the Third Liners: Multiple Manifestations of BW-SSO Strains Part II

I probably don’t need to show anew the charts of BW and SSO.  

Yet the mission or the goal of the re-publishing of these BW-SSO charts is as a refresher to usually forgotten blighted (politically distorted) market dynamics. These charts reveal not only of the shifting stages of bubbles—first the boom—but its ultimate consequence: the bust.

Importantly, the extent of the bust have almost always paralleled or equaled on the scale of the boom: or they are plagued by the Newton’s Law.

And the proliferation of vertical price actions (booms) haven’t been about firm specific price anomalies,instead, they serve as a thermometer or as a barometer to the state of the broader markets.

Or, one must not see these strains as “local” or issue specific developments, but rather as a “big picture” phenomenon.

In short, these signify as symptoms of a progressing chronic disease, or subtle entropic forces gnawing at the very foundations of the current market conditions.

Early this week, I sent charts of PHES, TUGS, ALCO, RLT, MG and WPI which have manifested pathological strains in terms of price vertical spirals (Season of Third Liners: Multiple Manifestations of BW-SSO Strain Surfaces! February 7, 2017)

Below are the other fledging or formative BW/SSOs at work via charts of indicated securities

Chart 1: PA, LMG, ALT, PRMX, BSC and ACE 

 

Such symptoms have appeared even in some second tier issues

Charts 2: PNX, SGI, DFNN, PHEN, MED and PF

 

Recall that a fantastic spurt in vertical price spikes surfaced in PSEi 30 issues during the January to July 2016meltup. The 33% surge in 6 months prompted for a string of record highs mostly within the 15 biggest market caps. Unfortunately, a majority of these failed to hold on into these gains. Momentum eventually caused significant retracements. Some even suffered from Newton’s Law.

Now the same convulsive impulses have percolated into the second and third tier issues given the relative underperformance by the PSEi 30 (which is still below 7,400).

The obsession for free money has filtered into issues of lesser status.

Nonetheless, the 9-day meltup that occurred at the end of the week December close to New Year week has somewhat reenergized selective vertical price movements in the PSEi basket. And the jury is out as to whether these would spread and transform into a generalized dynamic.

Yet in recollection, vertical price actions have consistently failed over the long term in all 50 years of PSEi’s history. A PSEi breakdown should extrapolate to a spillover to the broader market.

Finally, and interestingly, a demonstration of security specific episodes of the boom-bust cycle through the prism of two issues.