March 25, 2001

Come to Bear Country

So far the local market is still taking its signals from the US. With the Dow almost in bear country, should we expect the same? Well the way the market has dropped almost consistently for two weeks now, almost everyone would probably come to the same conclusion. So is now the time to buy?

For that, we'll have to see what happens to the US market. After all, we will continue tracking that market. But even on our own, I don't see a two to three week rally just yet. The phisix chart needs about a 40 to 50 point decline before a good rally can commence. Otherwise, we should just be content with a one to two day bounce every now and then.

Even when I checked the charts of the major index stocks, a lot of them still have a long way down to go. But on a daily chart, most of them are really oversold already. I wouldn't be surprised if the index rallied this Monday and Tuesday. After that, I would expect a consolidation with a downward bias. Hopefully by Friday, both the daily and weekly charts of the index will be oversold.

In the meanwhile, I have my eyes on TEL, ION and ABS still. I would also bet on wildcard SECB.

If you're waiting for the property stocks, well further retracement is warranted. Choose some other index stocks first. If I recall correctly, even SMCB looks good. If it declines a peso or more within the week, that may be a good pick-up point already.

Here's something to think about though. The election fever is heating up. We've heard how the candidates continue to dance and sing. We've heard how the wife or son or cousin of an incumbent would be running for some other position. Wow! It's as if nothing has changed. If so, expect the muckraking to escalate in the coming weeks. We may just have another scandal in our hands. But then again, that's just me speculating.