There's a Bull Behind Every Dead Cat Bounce

Chart Analysis Forum: Financial Market's Year-End Analyses Forum

2008-11-04T08:01:00.001+08:00

Host: Absolute Traders & The Philippine Stock Exchange Inc.
Location: Philippine Stock Exchange Centre, Tektite Trading Floor
Exchange Road, Ortigas Centre, Pasig
When: Tuesday / November 11, 2008 / 7:00PM to 9:30PM
Phone: Bonner: 09189354716, 09228633298 / Gwen: 09178040060, 09228633299

Chart Analysis Forum:

Financial Market's Year-End Analyses Forum

PSE Outlook by the PSE Marketing Department
Fundamental View by Sandy Gilles
Technical View and InterMarket Analyses by Fitz Aclan and Danny Go

Guest from the Banking Industry (TBA)

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Up, up! But is it on its way to "away?"

2008-03-25T14:11:00.006+08:00

And the bargain hunting continues! Volume today is up about 60% compared to yesterday. After another positive close in US markets, the PSEi has given us this:

It looks like a rally, smells like a rally, and tastes like a rally. But the true test is at the 3026 level. Please, not too fast. We don't want a spike but a steady return to green land.

Biggest news from last trading is JPMorgan's upbid (JPM, Fortune 500) to the Bear Stearns (BSC, Fortune 500) purchase from $2 to $10 per share. And again, this is no problem for JPM after its earnings from VISA's IPO. Anyway, the upbid is meant to calm BSC's shareholders who feel $2 dollars per share does not reflect the true value of Bear Stearns. Needless to say, but still worth noting for the figure it has produced, BSC closed 88.76% up at $11.25 from a more than 100% high at $13.85.

NASDAQ	2326.75	68.64	3.04%

DJIA	12548.64	187.32	1.52%

S&P 500	1349.88	20.37	1.53%

Back to the local front:

PSE COMPOSITE AND SECTORAL INDICES from www.pse.org.ph

VALUE		CHANGE	% CHG

PSEi	2,892.20	24.70	0.8614
All Shares	1,773.17	14.00	0.7958
Financials	694.99	10.40	1.5192
Industrial	3,576.71	3.61	0.1008
Holding Firms	1,551.37	8.73	0.5659
Property	1,089.74	26.20	2.4635
Services	1,600.02	8.28	0.5202
Mining & Oil	6,539.98	85.85	1.2957

MARKET ACTIVITY

Trades	5738

Volume	1,142,476,910

Value (in thousands)	3,251,015

Advances	60

Declines	30

Unchanged	58

Worth noting is the Mining and Oil average's 5th day at closing low despite All Shares in a 3 day rally.

The fact that most positions closed at highs is an indicator of quick sells, as well. Probably just day trades in the market today as investors are still waiting for stronger confirmation from foreign markets. Oh how dependent are we!

Stock to watch while eating popcorn: FLI!

Today's low is higher that yesterday's low. Why? I don't know. :) It closed at 1.06 which is a price it last hit 13 days ago.

bargain hunting or still holding back?

2008-03-24T21:07:00.007+08:00

Filipinos are known to be suckers for bargain deals and discount sales. We fill shopping malls to almost asinine proportions over payday weekends and shop, shop, shop.

So why was the market not full today? Why were bargain hunters not in troves? Well, we're 12 hours ahead of US trading, that's why. At this point we are still waiting for confirmation that the otherwise good week last week in US equities is not just another fluke.

PSE COMPOSITE AND SECTORAL INDICES from www.pse.org.ph

VALUE		CHANGE	% CHG

PSEi	2,867.50	49.92	1.7717
All Shares	1,759.17	23.47	1.3522
Financials	684.59	8.06	1.1914
Industrial	3,580.32	62.04	1.7634
Holding Firms	1,542.64	30.89	2.0433
Property	1,063.54	36.25	3.5287
Services	1,591.74	17.12	1.0872
Mining & Oil	6,625.83	202.46	2.965

MARKET ACTIVITY

Trades	4344

Volume	738,146,677

Value (in thousands)	2,165,174

Advances	56

Declines	27

Unchanged	48

All eyes on you tonight, Uncle Sam, in another crucial week to world economy!

Hard times?

2008-03-23T14:19:00.006+08:00

Trading for both the US and Philippine markets will resume tomorrow.

The PSEi ended last week with modest gains after being down 4 consecutive trading days. Can it continue on with an uptrend following news of lower commodity prices? It has not yet traded after the oil price shed off about 10 dollars. Does this give us something to be hopeful about?

From January 22nd to March 17th, the 11690 line has been tested thrice. Have we seen a bottom to the US market? Are we on our way back? Confident?

Questions. Yes. Those are what we have now.

Oh, and one more interesting thing... JP Morgan made at least $1.36 billion in VISA's IPO. This means, after paying for the Bear Stearns purchase, the financial holding company has still a billion dollars to pocket. Talk about hard times. :)

US Averages shed gains

2008-03-20T15:28:00.003+08:00

The US market has shed gains from Tuesdays 420-point rally. It was a higher low, though. Plus, the DJI is still consolidating in the 12850 to 11700 levels. I remain confident, especially because of VISA's first day trade performance - a 28.41% gain as they close at $56.50 per share.

Not exactly the confirmation the Philippine market is looking for, but hey, there's still tonight, right? Right!

And since I've mentioned tonight, here's what to watch out for:

- VISA under the ticket "V" - will they hold gains from first day trade?
- Companies set to report earnings:
Barnes&Noble (BKS)
FedEx (FDX)
3Com (COMS)
Palm (PALM)
- Starbucks (SBUX) - In its annual shareholders meeting yesterday, Chairman, President and CEO Howard Schultz announced that there will be changes in the Starbucks business plan.

Another exciting trading day. That's for sure!

The worst is over!

2008-03-19T12:04:00.002+08:00

Nah, I'm just practicing. :) Poor, old Philippine Stock Exchange needs confirmation. A good day in the US is not enough for a rebound. Yeah, it's either that or the country's premier financial market can't see Confidence even if it stares him in the eye.

Despite a .75% cut in interest rates by the Federal Reserve and better than expected earnings reports from two otherwise ailing companies, Lehman Brothers (LEH, Fortune 500) and Goldman Sachs (GS, Fortune 500), that fueled a 420-point spike for Dow, plus a record-breaking $17.9B IPO of VISA, the PSEi only posted minimal gains. Better market performance during Wednesday and Thursday trading in the US might give a much needed local boost, but it certainly won't be fooled by another March 11 "could-be."

VALUE		CHANGE	% CHG

PSEi	2,817.58	40.16	1.4459
All Shares	1,735.70	21.63	1.2619
Financials	676.53	11.56	1.7384
Industrial	3,518.28	6.26	0.1776
Holding Firms	1,511.75	27.61	1.8603
Property	1,027.29	24.14	2.4064
Services	1,574.62	26.50	1.7118
Mining & Oil	6,828.29	46.60	0.6778

Stocks Study (PCOR)

2008-03-17T13:20:00.002+08:00

News about Aramco's sale of it's 40% hold of Petron Corp. here.

Will the Price move back into the ascending triangle and eventually break up with a 7-peso and above potential?

Or is it on its way to confirming a right shoulder to a head and shoulders formation?

Watch out! :)

What just happened? (03/17/08)

2008-03-17T12:33:00.003+08:00

On Sunday, March 16, the US Federal Reserve cut lending rates to financial institutions
by 3.25% in an effort to ease the credit crisis in America. Yes, they did it on a Sunday. Maybe they are expecting results come Monday trading?

In other news, JP Morgan Chase and Co. has moved to acquire Bear Stearns Companies, Inc. at $2 per share. A week ago, BSC was valued at around $70 per share before it closed at $30 on Friday.

Despite and because of these developments, Asian stocks close low, Asian currencies take a plunge lead by the Korean Won at a 27-month low.

The PSEi has broken down the 2800 psychological support line and closed at a value of 2793.68.

It is now in territories it has not re-visited since November of 2006.

There is no clear bottom at this point unless we follow what the double top pattern tells us. 2146 to 2246? :)

I am hoping for a rally, though. Suffice it to say, I have sold all positions and am now 100 percent liquid.

What to do while on the sidelines?

2008-03-15T15:29:00.006+08:00

I just came from a lunch get together with fellow traders. The other 3 I was with could actually pass off as my mentors as they know a whole lot more than me.
We discussed the week that was in both the local and US market scenes. General sentiment is to stay in the sidelines.

DJI as of 03/14/08
Yesterday's close down 194.65 points from a start-of-week rise of more than 400 points.
The Feds are meeting up Tuesday next week to discuss further measures.

PSEi as of 03/14/08
Looking for excitement?
Wrong place.

But what to do while controlling your urge to buy without clear greens?
- Develop your own Market Feel
- Study Charts
- Understand Fundamentals at work (not necessarily be guided by them)

Thanks to Paul, Bonner, and Amado for the wonderful company.

Dead Cat Bounce? eh?

2008-03-14T12:25:00.002+08:00

Well, yeah let's start with definitions.

What is a dead cat bounce? The ever trust(un)worthy wikipedia defines it as a "term used by traders in the finance industry to describe a pattern wherein a moderate rise in the price of a stock follows a spectacular fall"

There's an excellent flash show here.

My source goes on to say that, "A market rise after a sharp fall can only really be seen to be a "dead cat bounce" with the benefit of hindsight. If the stocks starts to fall again in the following days and weeks, then it is a true dead cat bounce. If the market picks up starts to climb again, it was not a bounce but a bottom."

Basically, it is a vindication for shorters and what bulls in the market hope to overcome, i.e. turning the supposed false rise into a recovery from a bottom.

So why not a blog name with a more bullish connotation? Because nothing can beat the cuteness of "bouncing kuting." :)

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"How I got started in the stock market"

It was late 2006 when I began investing in the market. I signed up for an online account at www.philstocks.com.ph which was perfect for my busy schedule at the time. See, I have a day job. At the time, I was looking for a way to make my money grow. Depositing it into a bank account with promises of 1% growth per year minus taxes just did not appeal to me.

Risky? I was prepared to lose all in the stock market than just have it parked in a bank account where money can never see its utmost potential as the previous also promises higher returns despite the risk.

Philstocks offered an introductory course which I attended the day I signed up. It included some understanding of fundamental and technical aspects of the market.

After a year of trading on my own and realizing that there is more to trading than just buying and selling stocks based on instinct, I enrolled myself in a Technical Analysis Seminar from AbsoluteTraders.com. At the time of this writing, I am about to finish the introductory seminar and will be taking the first part of the course's exam come our next meeting in a couple of days.