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.

March 15, 2001

For eight consecutive sessions up to today, the index has performed miserably. Within that span is a 40+ drop and today's 30+ drop. As the index breached the 1500 psychological barrier, a lot of investors must be feeling queasy with their long holdings. There's good reason too. From Japan to the US, all we hear are negative stories. Japan has been trying to stimulate its economy for a decade, while the US may be on the verge of a recession. The Dow is below 10000 and the Nasdaq is below 2000.

But it's not all that bad. My own take is that we're in a period of relative calm. I certainly believe things were a lot more uncertain last year, with standoffs just waiting to happen between opposing political figures. That being said, I would like to believe that the stock market will now be more predictable. Sure there's a drought in terms of volume, but that's really not much of an issue for us retail investors right? Let the fund managers suffer. It's our turn to thrive. ;-)

Very quickly, my personal picks are TEL at P740, ION at P11.75 and ABS at P40 for the coming week. In fact, I've already picked up ION at P11.50. Hope it doesn't dip tomorrow. By next week, if the index continues to fall, perhaps to the 1450 level, a lot of other issues would be ready for positive reversals. Take your pick. You have SMCB, MERB, AC, ALI, BPC, EBC, MPC and SMPH.