Why the Pre-Closing Dumps When the PSEi Hits 6,970-80? Are Global Stock Markets Topping? Is SCC Riding on China’s Energy Crisis?

 

The stock market is filled with individuals who know the price of everything, but the value of nothing." — Phillip Fisher 

Why the Pre-Closing Dumps When the PSEi Hits 6,970-80? Are Global Stock Markets Topping? Is SCC Riding on China’s Energy Crisis?  

 

Figure 1 

What is so magical about the PSEi 30 at 7,000? Does this level represent the portals to heaven? The mainstream seems to think so.  

 

The index raced towards the 7,000 level ever since the March 2020 uptrend had been violated twice, at the end of July and mid-August. 

 

However, ever since it reached the 6,900-levels in mid-September, the index appears to have been stuck. It refuses to go below it, as index managers made sure it came back fast. But it has also balked at advancing further.   

 

Interestingly, in 5 of the last eight trading sessions, the quest to reach the destination through intense intraday pumps culminated with pre-closing dumps!  

 

Figure 2 

Or, once the index reaches 6,970-80, some entities have sold-off at the close! 

 

Could this signify ALGO-based or programmed selling? Or are some entities engaged in coordinated early pumps and closing dumps outside their traditional network?  

 

Truly incredible stuff.  

 

And the mechanics of Operation 7,000 remains the same, alternating pumps between the Big-6 and the industries supporting the Fantastic Four (CNVRG, GLO, ICT and ACEN).  

 

Friday's pre-closing selloff essentially determined this week's -.4% returns. While the others corrected, SM, ICT, CNVRG, and GLO provided the fulcrum that sustained the 6,900 level.  

 

In the world of everything bubble, anything can happen. The vertical ascent of some issues at the PSE proves this point.  

 

Nonetheless, global stock markets appear to be plateauing. If not, it has started to show signs of peaking. Perhaps an inflection point?  

 

If so, a pullback on the global markets will likely also weigh on the domestic front, despite magnificent efforts by index managers to decouple the local markets. 

 

Interestingly, the unfolding energy crisis in China and Europe has spilled over to coal prices. 

 

Figure 3 

From Business Standard/Bloomberg October 2: China’s central government officials ordered the country’s top state-owned energy companies — from coal to electricity and oil — to secure supplies for this winter at all costs, according to people familiar with the matter. 

 

Prices of Asian coal have spiked over the last few weeks. The most eschewed commodity is suddenly one of the darlings of the financial markets. 

 

Here at home, former PSEi 30 members, the coal giant Semirara and parent DMC appear to be surfing this Chinese ‘securing of energy supplies at all costs’. SCC and DMC posted 17.74% and 5.81% last week.  

 

Under the current setup, anything can happen. Be careful out there.