Trader's Note
dragon39@rocketmail.com

Sept. 22. Weighing the risks. Around the world, stocks are at more than their year lows and looking cheap. However, overall sentiment is still rather quite panicky and people would still sell at rallies, making any short-term prospects still not in our favor. Personally, I would wait for the American retaliation and the additional fearful selling that comes after that to re-enter the market, and sell immediately if a big runup occurs after that.

 

Sept. 17. Patriotic Rally? The question on investors' minds right now is "will there be a selloff in the U.S. market when they open tonight?". For me, the question should be changed to "when will the selloffs occur?", because recent sentiments show a patriotism that might curb a sharp selloff tonight. Take note that the mood is "I won't sell," rather than "I'm going to buy", so when non-American fund managers who are not Patriotic to the U.S. surely decide to sell, won't this ripple out to the American investor? And if it temporarily doesn't, remember that Americans are extremely concerned with earnings, so when the economic numbers effects come or even way before that, sharp selling of insurance companies, airlines, etc., won't this domino-topple the whole globe into a recession? Stay away first. For our puny country, psychological support is at 1200, then some intermittent support at 1150-1170, then 1122, then 1100.

 

Aug 8, 2001. whew! The Great crack of 1370 has now led us near a slight psychological support of 1300. Will this hold? Maybe for a short while, then we'd come falling back to a firmer support of 1250. The WEB play came and went, along with sister company ISM, whose request for exemption from the "buy at huge discount to market" rule was denied. Ongpin originally wanted to do a WEB2 with ISM, meaning to buy the company at par at .01 while the share price is higher than par so he can sell at the board. Those shares were supposed to be unhalted today, but rumors of a floor/limit down made them choose to remain halted. Be careful with WEB/ISM ! Any play is designed to make ONLY THEM rich, not the minority. And now that their request is denied, things can only get worse.

July 25, 2001. Cracking the 1370 support. This is a seriously major support level, that's why I'm giving it until the week to recover to or above 1370, before calling a move to the 1250 support. In other rumor tidbits, the insiders of OMico are reportedly changing guards and a play is expected. The WEB play is expected to surface any time now. Shorters are padding the sellers side heavily to push the prices down some more.

 

July 22. Circular motion. Well, TEL and MERB did fall, but from the looks of it TEL may touch 600 again. MERB might not fall that much anymore. What's strange about the index issue's movements are that they are not in unison. Some blue chips may move down one week, while the others go up, and vice verca with some mix in the loop, thus giving an appearance of indecision with a slight downward bias. The 1370 support will most probably hold, as this SONA thing plays itself out the coming week.

For me, most of the bad news has been out already. It will just take some catalyst to prop us up out of this sluggishness.

July 13. Penny shares. The psychology of investing in speculative penny shares in the Phil. Stock Market is really interesting. A certain stock will move haphazardly upward with various vague rumors as to who will take over. When the real confirming news is out and things start to get clear, that is when the top is forming.

Right now ISM takes center stage again for staging big comebacks the past two days. I heard that the board members are restructuring a new deal which will be beneficial for all? PO is also up because of a rumored takeover by a telecom company, which I heard might be NEXTEL. Today's volume for PO is more of accumulation in nature, in contrast to its chupitero (short term) stance in its previous runup. I stand corrected on the worthlessness of IMP. It seems IMP is in JV deals with Oracle. Take all rumors you hear here or from your broker or other websites with a grain of salt. In most likelihood, these are wrong and the right reasons will surface later on when the insiders have bought sufficiently.

July 6. Profit take first. Ask questions later. PO has taken off and is met by medium selling resistance. Take profits on Monday and see if the .02 level will hold. Buyers who got in early are slowly unloading. Maybe it would do an ISM which shot to .055, went back down to .042 before flying to .075. Learn your lessons people, nothing goes straight up (or straight down). Other backdoor-wannabes IMP, PA are just riding PO's coattails. ISM's request for an exemption of the tender offer/rights rule at .01 is a make or break, I'm sure you know that. Don't be fooled by OM's seeming rise. If you know which two brokerages to look for (who are always selling), then you would know what I'm saying. Useless to name them because it's easy to sell thru other brokerages.

Market in general is teetering on the edge of a major breakdown. Buying strength on blue chips TEL, MERB, ALI, etc, must surface soon or 1250 here we come. TEL is about to breakdown, MERB has already broken down. Could this be the selldown that would lead to THE BULL? Wait and see.

July 3, 2001. Bearly. We barely survived today's attack on an important support level at 1376. Our intra-day low was 1377, we bounced back from there and closed our index at 1392. The next final support could have been 1372, and if broken, might lead us back to the 1250 range. As it is, psychological slight resistance remains at 1400. A break of this will almost surely bring us back to the trading range with a target near the 1480 level. Some heavily battered issues formed hammers today, let's see what happens in the coming days. Volume remains anemic net of crosses and special block sales.

June 24, FAIR GAME. By now, you're probably hearing left and right about the playability of Fair in the coming days. I don't need to grab credit *ahem* that you heard it here first two weeks ago, along with newsworthy bits like the CBC and ISM plays. Well, maybe I was a little late with ISM, but that was still in the .03 level and that's not the point. The point is that we should all make money from this, to take advantage of such moves while in this boring bear market. Otherwise, what's the point on coming here every now and then to read my babbling? Anyway, now I'm starting to accumulate PO, and gathering more info on this, plus on another share. But remember, if everything in life is sure, then everyone would be rich. Just like some guy who was good on his ICT tip, it's not his fault that some didn't know when to sell.

June 14, 2001. BLINDLY BUYING
It seems the theme for the past week's upmoves is to blindly buy.  We currently have nothing going for us and yet stocks across the board (more or less) continue their gains.  An explanation may be that some people may have over capitulated plus the fact that the selling pressure was absent when all the bad news had come out, especially the latest one, which is the Abu Sayyaf terrorists.   Net foreign buying may also be accredited to an effect of the pushing through of the power bill.

overheard: the reason for ISM's move is a backdoor listing for Shell Corp.?  BPC downmove due to the rejection of water rate hike may just be temporary.

DO YOUR SHARE TO BRING BACK LIFE TO THE PHILIPPINE STOCK MARKET: if a number of us would text GMA continuously, quick action might be taken. Some suggestions would be: 1)to bring back the broker-dealer trading privileges as our goal to become a world class exchange should be patterned with leading Nikkei and DOW etc. exchanges where there is no such suspension.  This would then create much more liquidity and volume. 2)To lower slippage (transaction fees like doc. stamps, sales tax and the like) where ours is one of the highest in the world.  A related case in point: did you ever wonder why you would pay for more in doc. stamps when a share is below par value?  3)To lower or abolish the excessive stock transfer charges, and the 17 days waiting period before you could sell your name certificate.  #2 & 3 would surely encourage more trading and benefit ALL investors.  Of course our economy and political & global situation is another thing entirely, but this way, you could do something!
GLOBE: 0917-TEXTGMA (0917-8398462), 0917-TXT-2-GMA (0917-8982462) and 0917-TXT-K-GMA (09178985462). 
SMART: 0919-TXT-GMA-1 (0919-8984621), 0919-TXT-GMA-2 (0919-8984622) and 0919-TXT-GMA-3 (0919-8984623).

 

June 9, 2001 MOVING THROUGH THE BLUES
I opted not to mention my purchase of TEL at 615 last week as it was purely a risky bottom
fishing move and all I had going for me was that I waited until the selling pressure had abated. But I sold too early at 650, which is good enough, and am now positioning at MERB, which is right on a good 9 month uptrendline support.

The new plays of next week may be the centavo triumvirates MEG, ELI, and FAIR. FAIR reportedly
has a new project in Malate, to be financed by MEG. The private placement of FAIR of 350 mln
shares at 1.00 is pushing through. Expect Eli to do a sympathy rally when the other two move.

Sunday, June 3, 2001. Wishful Thinking. I kept on stating that a major runup if not just in volume, but maybe for the whole Phisix as well, is in the offing within two months at the earliest. Let me honestly share with you that this is just purely and "contrarian-ly" wishful thinking.

When you use pure logic to think about it, there is nothing good going for our country right now. Any move by the current administration will bring out negative detractors who will threaten to "mobilize for an Edsa 4" or the like. War with Erap--mobilize, power bill approval--mobilize, shake hands with Erap--mobilize. I'm secretly hoping for an Edsa 4, just to show people how futile it is. Then, the power and threat of Edsa will not be used in vain anymore. With regards to Estrada's trial, heck-the arraignment can't even push through! How long will the whole trial take place? Will the Phisix drift along aimlessly throughout the whole trial? The answer is an almost definite yes. Remember when this all started? People asked when the market will recover. Here are some memorable answers in chronological order: After the Abu Sayyaf Hostage (the 1st one) is settled, after the BW prosecution/blue ribbon investigation, after the impeachment, when Erap is removed from office, after the elections, and now, here we are, after the trial and the 2nd Abu Sayyaf Hostage Situation.

Some people state that former President Ramos was just lucky to ride on the tail of the Asian Economic Boom to get his Phisix 3000, however, with all our problems right now, our country did not even blink as our Asian neighbors rose with the Dow since April this year. Another major problem compounding our situation right now is that the U.S. slowdown has not yet officially stopped, and a general recession is still possible. It is said that the stock market moves around 3 - 6 months earlier than economic signals, so if the market movement is a pre-indicator of upcoming signals, what would be the pre-indicator of upcoming market movents? That, for me, is where wishful thinking comes in at this point, because all the bad news are here already. Brokers are giving up, brokerages are closing left and right, this is capitulation in the purest form. How long can this last?

For the return of overheard rumors: ICT news is out already, buying only up to 2.50. CBC rumored to be on the takeover list of Coca-Cola, their buying price at 8.00. Hot on the heels of the SKY-Home Cable merger, WEB is in talks with Destiny Cable. Remember, these are just overheard.

Maybe next week, we'll see a change of format here as a new partner comes to write his own column. Stay tuned.

 

Tuesday, May 22, 2001. What we need.  With the relatively flat volume we have right now, let me remind you new readers out there that without foreign funds to move our stock market (and/or invest in our country's economy via infrastructure, manufacturing, etc.), our country would stay dead.  Having said that, what we desperately need right now are those credit rating upgrades by those so-called foreign investment firms.  

    Approving any new form of the power bill might help a little in reducing power rates as we have one of the highest power rates in Asia, but what we really need are those grass roots convincing regarding our political reforms.  Some commitment on our part that graft and corruption do not become the prime purpose of being elected.  I wish our political parties would stop persecuting each other.  Every resource intended for furthering progress is instead devoted to defending oneself and attacking the opponent.  What seems to have no immediate (if at all) solution is our labor force.  Our wages are, once again, one of the highest in Asia, with the compounded problem of strikes and unsavory work ethics.  Our transaction charges for the stock market, again one of the highest in Asia, definitely needs to be readjusted.  Think of the macro benefits this would reap as lesser charges would mean more transactions in the long run, thus garnering more revenues.  

 

Monday, May 7, 2001. Bottoming for me. I now believe that a base is slowly being built in our market. Last year, our volume was sadly at 1Billion pesos per day and I was gunning for a 2-3B per day volume to justify any rally. Today, I'm quite satisfied with a return to 1Billion pesos per day, given our less than 500 million per day volume. As of now, no higher low has formed yet to validate an uptrend, but I believe we're getting there, albeit slowly.

The foreign selling that began two years ago have all but dried up. What blood on the streets we had last week gave for only some puny selling, signifying that with this dried up volume, not only are buyers absent, sellers are also tired. If you're a longtime player of the stockmarket, you can now console yourself for having stayed with this lengthy bear market as the goodtimes are more or less two months away.

Friday, April 20. 2001. Bottom, anyone? At this point, especially for OUR market, nobody can say for sure. Given the 1/2 point interest rate cut by the U.S. Feds, all we got were whimper moves pathetically lacking volume. Some veterans have all but given up on our market, comparing this to their U.S. market trades. Our two-week old technical buy short-term buy signals are only now slowly coming into fruition, but this is still not a buy for me, but rather a wait-to-sell when the weakness comes. Once again, playing our market at current times reminds me of throwing darts by the average guy. Most often, you get burned with BPC, TEL, MERB, etc., but every now and then, you hit the bullseye with BEL, FAIR, PCOR and the like. Afterwards, it all kinda evens out in the end, with a bigger tendency for loss.

Looking a few months back, I figured that even though Erap was removed from office, we would only have a two week rally at best, because of the global economic malaise. Looking forward, despite this coming May elections, I foresee that the return of the long-term bull occurring would still be doubtful. So what's wrong with our market? Uncertainty and risk is still a big factor in our country. Foreign funds are the ones which move our market, and the fact that they're still not sure that their own markets are finally recovering from the slowdown makes us the least priority to invest in. Top this with the current political squabbling and the potential chaos the Erap loyalists might cause, and you can almost make those foreign fund managers turn the page. Of course factors like the China spy plane ordeal, ultra-tight restricting SEC trading policies, and rising crude oil prices also contribute to our misery, so I'm sure you get the picture now.