Common Sense Trading - A Blue Jeans Approach to Philippine Stock Market Trading

According to stockerblog : "Some interesting trivia about the Philippines: 1. It is the 12th largest country in the world by population. 2. It is ranked 25th by Gross Domestic Product by purchasing power parity 3. It was a founding member of the United Nations. 4. In 2005, the Philippine peso was considered to be Asia's best-performing currency, according the the CIA World Factbook. 5. Their economy grew at a rate of 5.4% in 2006. 6. Its two biggest trading partners are the U.S. and Japan. 7. It is a member of the World Bank, Asian Development Bank, the the International Monetary Fund, the Asia Pacific Economic Cooperation, and the World Trade Organization. 8. More than 180 languages and dialects are spoken in the country." This makes the Philippines sound so nice! Why, then, is our government such a mess?

The R word The overused word for the month of January is recession. Everyone talks about it because its rearing its ugly head in the U.S. and for better or for worse, what happens in the U.S. affects almost, if not, the whole world. The debate is ending The long and seeminlgy unending debate on whether the U.S. will head into a recession seems to be tipping in favor of a recession. That chilly word is all over CNBC and even Ron Nathan who has long been arguing that it isn't here yet nor is it coming seems to have modified that opinion a bit. Good news in there, somewhere The gloom and doom in his last article didn't sit too well with me so I prefer not to mention those points here. But I very much like that he ended by pointing out that: "There are signs that the Philippine Stock Exchange index may be bottoming out. Foreign selling stopped last week after seven continuous weeks averaging nearly P1 billion a day. I suspect the pension funds are buying heavily, especiall...

According to Wikipedia, Isaac Newton, the famous physicist, lost some of his money due to speculation in The South Sea Company stock in the 1720s. Isaac Newton lost over 20,000 pounds (£1.68 million in today's money) of his fortune. As a result of this crisis, he stated "I can calculate the motions of heavenly bodies, but not the madness of people". My friend who is a physics teachers believes that its possible to use the "turbulence theory" for forex trading. In response to that, I wrinkled my forehead and nodded as if I understood what he was saying. I'm convinced that more pinoys should get into stocks. Specially the yuppies with disposable income or even students with spare cash, but never - ever without proper advice. American Investors watch Warren Buffet, among others, and listen closely to what he says. Here in the Philippines, I don't know who would be his counterpart but I trust the opinion of Ron Nathan "The Bearbull" who writes a c...

Hollywood-ish news News of what happened to the Senate's witness on the NBN deal is dominating the clicks on inquirer.net . The Inquirer's front page told of a story that I think belongs in fiction. Lozada was intercepted at the airport even before he made it through the tube, taken by men and made to sign documents saying it wasn't an abduction. His hearing started around 10am today, and I've been following along through inquirer.net's running account . Another sluggish trading day The total trade value today was slightly less than yesterday, being just below the Php1.2 billion mark. Modest gains left the market at around 3241, up by about 17 points from yesterday. Waning interestin RP stocks Business world's headline for today says that: "Interest in RP stocks wanes" . The article highlighted some important statistics. "THE STOCK MARKET got off to a shaky start this year, with net foreign selling hitting a record P11.59 billion as foreign invest...

a dumb answer for a dumb question: futsal while trading stocks. If I had an iphone or something similar, I'd poke at stocks wherever I'm at. At school, at the mall, at church, ...hehe probably not at church, that's bad. ...and there's no trading on sunday. Its seriously addicting. Thanks to online brokers, the proliferation of wifi, cheaper mobile internet, it much easier to feed the addiction. but if i really had to choose... futsal, in a hearbeat.

Generally unpleasant Corrections are associated with unpleasant things. I remember when I first tried buying stocks. I did it with two unexperienced friends. We made our debut into Philippine stocks last year when the market was reaching new highs around the 3800 level. Shortly after, we saw a major correction in the Philippine Stock Market and watched the value of our new stocks plummet. We didn't like it. Luckily, we were patient, and since it was just a correction, the values returned to our entry levels and after a lot of waiting, rose a bit to give us our first taste of gains. It can be a good thing After almost a year of watching the stock market, talking to people about it and reading related material and news, I have a different view of corrections. I think it can be a good thing for various reasons, here are a few that I want to highlight: 1) It makes everyone cautious 2) It makes investors more discriminating 3) It reveals which stocks are quality stocks 4) It shakes off...

Today is the day the chinese celebrate the new year with such wonderous things as tikoy. Made from sticky rice, I like it best cooked with egg. Kung Hei Fat Choi! The market barely moved today. With a volume of about Php1.2 billion pesos, the index went down by only 5.64 points sticking close to this lame level that I am beginning to dislike very much. *yawn. It's one of the more boring days for Philippines Stocks.

Not too bad a day Given the large drop in U.S. indeces, I think ours did ok. Trading ended today with the PSEi down by 54.72 points with total trade value at only the Php2.6B mark. Not much of a sell off. That tells me that there was a hopeful sentiment in the market amidst all the pessimism generated abroad. It wasn't all bad as 26 stocks gained, 75 declined and 42 remained unchanged. PSEi general outlook still good Citisec, my favorite online trading company, told the inquirer today that their target for the year end is our index at 4200. It was initially targeted to be at that level by July. That means the outlook for the year is still good. But for someone like me, who feels like he's holding on to a battered portfolio, that seems like an awfully long way off. Nonetheless, considering the outlook of foreign markets, the prospect of positive growth for ours is enough to keep me from complaining. Gas rates to go down! The big three are to bring gas rates down by P.50. Much th...

Mixed headlines from inquirer.net "Top Stories Higher food prices push up inflation Gov’t eyes energy VAT rebate coupons Arroyo orders implementation of power ‘open access’ Old ideas given new push at energy summit Capital investments up 9.3% in ’07 Good weather seen boosting rice, corn production in Q1 NFA to issue P8B worth of bonds Globe Telecom eyes local borrowing for capex PAL earmarks P3.5B for wide-body fleet renovation Wellex to develop 3,700-ha mine site in Surigao" I doubt that there's enough happiness in there to translate into any big gains in our market today. In light of the drop in U.S. indices, today's trading is looking to be rather glim. I hope I'm wrong about this, but the pre-opening bids I looked at showed lower offers than bids! It looks like a big tumble is coming. CNBC retorts that there's no super tuesday for stocks. U.S. indices: DJIA -370.03 (-2.93%) Nasdaq -73.28 (-3.08%) S&P500 -44.18 (-3.20%)

Tracking the U.S. stocks Prior to the trading hours at the Philippine Stock Exchange Tue (Feb. 5,2008), the DJIA was down 108.03 points, the Nasdaq down 30.51 points and the S&P down by 14.60 points. Then I watched how our market tracked the drop in U.S. prices. The Psei slipped about 39 points, ending around four straight days of increase. Gainers outnumbered losers 71 to 32 while 50 remained unchanged. I remember some people telling me that our market is immature and easily subject to rumors and the "hot tip." While I don't have any first hand knowledge of that, my theory that Philippine Investors are watching the U.S. market all the more closely these days and taking cues from it, above all else, seems to be getting more credible everyday. Mixed business news RCBC came in positive as "Net profit rose 56 percent to P3.21 billion from P2.05 billion in 2006. This beat the bank's net profit target of P2.5 billion." Inquirer.net (RCB closed @ 18.50/sh) G...

I've read that January is usually an indication of how the market will perform for the year. While it may look like that for the coming months, I hope that isn't the case for the entire year. Psei Our Philippine Stock Exchange Index, which everyone still calls the Phisix, went pretty low this month of January considering the highs it had hit last year. That leaves us now watching it consolidate between 2900 and 3900, but hanging closer to 2900 for the month. At that position, there's lot of us sitting in the sidelines, who entered while the market was at the 3400/3500 position wondering whether we should sell at that when it returns to that point. With tons of good news on the local side, I'm more keen on waiting things out, save for some tiny trades here and there to pass the time.

I'm not so sure I agree with the Inquirer on that point. While, I see these reports to be a major factor, I think the whole world is still hung up on the woes from the U.S. They way I see it is that reports below investor's expectations can drag share prices down, yet better than expected reports can only push prices up if the good mood in the U.S. markets coincides with it.

"I'll be damned if the market heads back down below its short-term support at 3175 this coming week. If it does, I would suggest to immediately sell your long positions as the market will be vulnerable to lower low." quoted from Miko Sayo's weekly analysis of the Philippine Stock Exchange Index (PSEi a.k.a. Phisix) @ tsupitero.com In addition to pointing out that important number, tsupitero also said that: -the short term trend is now up -whether the medium term trend has turned up is uncertain -market is approaching resistances at 3400-3500

Under the present circumstances, looking to the U.S. market for an indication of where our market will go seems like a better idea than before. More predicatble market movements If we know where people look, there's more chance we know what they are thinking. That is an advantage of the American Credit Crisis. Its potential to affect world economies has caused traders and investors the world over to watch the U.S. closely. Over the past week, it appears that world markets have been taking their cue from the U.S. Theoretically, this makes activity a bit more predictable. The world hasn't decoupled Mr. "Bearbull", Ron Nathan of the Philippine Daily Inquirer is among those who believe that the world has not decoupled from the U.S. Stock Markets. He mentioned it in his article published last 29th. It appears that the world is united in believing that if the U.S. slows, the world will slow-albeit relatively less for the developing world. Analysis Applying this theory of m...