Wednesday, March 14, 2018

FAILURE to ADAPT with PH Stock Market Conditions...

can lead to 'Unwarranted Trading Catastrophe'
This is in response to several email inquiries on the PH Stock market's performance.

Exactly one month from this cautionary market call. It's already March 14, 2018 and the PSEI have recently moved to a new round of lower prices marked at 8284. February's HI/LO range have garnered close to a -745 index points from a record high at 9078 to its first low at 8333.

While the first three (3) weeks of March already have an average of -195 point decline from their respective HI/LO weekly range. These should be taken into consideration and not simply a week on week or a month end to end closing price difference. A must know in 'Price Action Analysis' with the PSEI and how it affects individual stocks in their respective category. 

As of March 14, 2018, regional declines were prominent following US equities which were attributed to the changing of the guards as Secretary of State Rex Tillerson have been taken out from his post by President Trump. And there are a lot of market misdirection surrounding the global market place 

It has been observed that the recent declines in the US market had weigh heavy on local PH stock market trading reactions more than the relative upward movements. As more Foreign outflows have dominated the local bourse into its present state. Main street investors and traders refusing to adapt to these unfortunate circumstances of declining stock prices and a slow yet creeping PH Peso depreciation would meet 'unwarranted trading catastrophe'.

Ironically, There are two sides of a coin.
Among the most recent shared information on the strategy of Cost Averaging, @megatrade101, we have always made it a point where a balanced approach to trading the market is a 'discipline'; where the set of skills and acquired knowledge allows an investor / trader to make an informed and effective decision. There will always be two sides of the trade to be considered with prices swing in both directions.

The effectiveness of a any trading strategy will always be measured by a variety of other factors that comes along as market conditions prevail more than ever with prices reacting more towards a fundamentally motivated market sentiment rather than their technical perspective. Although, other traders would prefer to be more technical than the other because of its simplicity and ease of trading. Better yet, every market outlook defined, pertains to the actual market conditions reflected in the market. And this is particularly true with any reinforced decline of prices either in stocks, currency trading or equity indices. 

The effectiveness of buying more into a declining market should be well timed as it would improve the original entry price of a trade position. And the relative break-even exit price would be executed at an earlier point of recovery. That is the essence of being able to average the cost price of two positions with an expectation to break-even on the way up and/or a price recovery from a declining market.

On the contrary, the ineffectiveness comes whenever a problem expands where prices fails to do what was expected and continues to decline. In this case, Cost Averaging in a major declining market condition such as the PH stocks current conditions would simply aggravate both positions. And if these trade positions were made from leverage, knowing at what price point would the position hold before getting a margin call. An important consideration where investors would have to add more funds to maintain these positions otherwise the broker would be
forced to liquidate / settle at a designated date and time. And on the other hand, Cost Average on the way higher within a trend is more favorable than most would expect. 

Related Information:
As of April 16, 2018 - 2nd Warning Signal - A Tactical Cross Trade Move 

Sequence Update 
As of March 20, 2018 - PSEI Gives In to 8059 1st Signal

There are other pertinent methods of trading strategies. And Cost average is one of the choices, but NOT necessarily the only choice to be made. However, in a lopsided market with an exchange which does not have short selling programs enforced. For main street investors, it carries a higher degree of trading difficulty to be profitable & consistent in trading the stock market. Especially when certain narrative sentiments are not openly discussed providing 'market uncertainty' on top of foreign outflows from the PH stock market.

Therefore, traders and other sophisticated investors would seek to arbitrage trade positions in markets that has the accessibility to do what is obviously right to meet investors interest. 

Watching is alright but it would be far wiser and much better to do what is right rather than slowly seeing a depreciating VALUE from the stock prices and the Philippine Peso.

'A DOUBLE WHAMMY' so to speak!
This why we have continuously repeated these phrases hopefully would be a wake up call from passive investors tolerance levels. We certainly encourage to consider the above explanation to further improve trading in the PH Stock market.


  1. Revisiting and reminding one self of the vital importance of trading discipline with the best practices in place.
    Essentially, " Timing" an new average, settlement or liquidation of a trade position, has the same equal importance of "Timing" any trade entry in the market. Developing the skill of "market timing" takes some serious due diligence and experience in trading the financial markets.

  2. BTW; doing cost average takes a little more understanding of the added risk especially when prices continue to move lower. A relief recovery should be treated with caution compared to a real price reversal. There are certain risk distribution and methods to follow even before execution. And this is where the difference kicks in between doubling down in trading and Las Vegas so to speak!

  3. On the other hand, take the hit and use the fresh capital to start anew with a fresher set of eyes on the market. Just don't be an eager beaver! to gain back what have been lost in one reasonable... if so Congrats!

  4. Last but not the least....A bucket half-full is better than a bucketful with a dripping bottom hole. This is the exact meaning for 'LOSS of VALUE' from stock prices and the depreciating VALUE of the PH PESO.

  5. Finally the PSEI marked a low back to where it came from at 8015 while closing for the day 3.20.18 at 8059.

  6. Almost all PH analysts describes the PSEI & its stock market components DECLINE from what we already know coming from the US & regional equities, Trade War with China, and geopolitical uncertainties as a whole.

    But prior to all these stock market rout, whenever US equities rally, the PSEI in general & more often does not normally follow the sentiments and actual market movements of the rally. These has been proven time and again causing a divergent direction of price action.

    More importantly, the reasons stated is only half of the real market narratives that first led to the price declines when the PSEI have reached its peak at the 9078. Where major companies so called market theme of SROs have led the initial and implicit narratives of stock prices to decline. As the last quarter of 2018 and the opening month of January have had investors accumulate a considerable sum of gains from the PSEI rally.

    Now that the US market have renewed its volatile decline with over triple digits at the first trading day of the April, the same narratives would be expected and follow suit from the PSEI at the next opening trading day.

    Which brings us to the point, by not taking swift action since our February call for Asian US PH Investors to readily ADAPT a cautionary stance that could cause unwarranted trading catastrophe have now been defined true and correct. Take the necessary steps to avoid a loss!

  7. Its already April 15, 2018 and the PSEI has maintained its bearish flow still below the 7885, nearing a crucial price level range at 7790 - 7830 which is just a stone's throw away. For now, a continuation of Foreign outflows have been adding to the bearishness of market sentiments.

  8. At, we have given our best warning signals through these shared information to our member clients, loyal viewers and those who are self directed in trading the PH Stock market. Be a smart tactical investor and avoid the unnecessary losses that others have incurred just in the past two months.

  9. This served as another signal warning that the directional trend and declining stock prices continue to prevail especially in today's PSEI revisiting below the 7500 levels.

  10. It's already June 14, 2018 and the PSEI relentlessly been down as described to be the worst performing Stock market coupled with the continuing depreciation of the Philippine Peso above the 53.00 level exchange rate against the USD.

    Needless to say, most brokers / Analyst / traders alike have well been on the defensive defining that the foundation and solid fundamentals are still intact while stock prices are at their bargain levels. And have categorically attributed the market's decline from external factors such as oil prices, interest rates, inflationary pressures and trade war just to name a few.

    Still, the underlying fact that investors 'Alternative' strategies were available then and especially now. It would have made a difference knowing that such a lengthy decline could extend further losses now in place with stocks and the PHP.

  11. The 10 comments above are more than enough to emphasize our point. Its more than a 'wake-up-call' for PH Asian Investors who have not done anything about it until today. AVOID 'Unwarranted trading losses' as the PH stock market had already turned into a WASHOUT for position investors with no real liquidity and trading CATASTROPHE from the PSEI peak price at 9078 last Jan 31, 2018.