Monday, April 16, 2018

A Tactical Cross-Trade VALUE For Investments

A Way to Beat PHP & PSEI Bear Market!
Alternatives for Investors / traders to consider both sides of the market.

In a confirmed market decline like the PH Stock Market led by the PSE Index, can retail investors and traders really rely on what broker's and other interim traders claim that 'COST AVERAGING' is the way to go? .... Not so fast!

At the rate that the PSEI have weighed since topping out at 9078 since the first week of February 2018 the local bourse have not been able to look back and is currently well below the 7900 levels. Failure to ADAPT to market changes have already led to unwarranted losses for a lot of local PH investors. And in some manner may turn into a market 'WASHOUT' for the overall retail investors positions which we think needs to be called upon for their attention and not simply waiting it out with the hope of a turn around at this time.


Nowhere can one find a reasonable amount of fresh incentives coming from Foreign investors. Except the continuous market outflow from trading the PH stock market. A meager amount did; yet pulled-out the day after as indicated above chart, when the relative PSE index have played out the same usual trading play of retreating back at the previous pm session lows. An obvious characteristic of the last minute trading action that most institutional money managers and broker house traders do having direct access at the floor.

Cost Averaging is ineffective due to the PSEI market's implicit narratives for over a couple of months now. And this is just a reminder that investors / traders who are self-directed in trading these markets should well reconsider their options in these type of market conditions. Especially so where 'Short-selling' among retail participants are not basically allowed. With a few exceptions of stocks listed in the international market such as the FTSE that institutions have access to cross trade positions in both market trend directions. 

This way investors can DEFINE & PRESERVE the TOTAL VALUE of investments made or exposed in the stocks to cover partial or the overall depreciating amount in value used in the market. Of course, there are other methods of doing so. But for now we're keeping it as simple as possible to be able to relate to other market participants.

Be a smart tactical investor especially for those who has the capability of doing what is right. While other retail investors and traders would have to be contented by being on the sideline for now. 


MARKET UPDATE: AS OF APRIL17, 2018 

PSEI Drops to 7691 in Negative Territory, Lack of Fresh Incentives
Foreign & Retail Investors takes a hard look on price action



6 comments:

  1. The implicit narratives behind the PSEI and its component sectors price decline and bearish market sentiments are much more than is actually reported by news agencies. There is a need for full transparency behind why Foreign investors outflow continues to dominate and have lost confidence in the PH stock market.

    This have been proven for more than a couple of months a steadier outflow in triple digit figures have more or less totaled over USD38M nearing the USD47M from October 2017 alone. Over USD1B have exited the market for the entire year of 2017 as widely expected and reported by the Central Bank. And 2018 may even be bigger than the previous year.

    These negative narratives unknown to many are indeed just a matter of being able to have the full Transparency needed by the market place.

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  2. Besides in over a three year period the PSEI stayed above positive territory only from September 2017 thru March 14, 2018. And is currently negative at -2.51% over the three year period covered. The highest marked was at 11.99% last January 23, 2018 and have declined since then.

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  3. Its already April 16, 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.

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  4. As of April 17, 2018, the PSEI reached an 8 month low at 7691 with the usual reason of Foreign outflows dominating the market sentiments. This has been the market sentiments and reports made by the exchange and other market analyst.

    Although, the market price movement shows the bearish sentiments it only reflects half of the stories behind the continuous decline which should have investors take more than a second look. Stay clear out from manipulative price action from corporate news reports that may tend to mislead market participants.

    Even earnings report would not make any serious difference as of now. Simply because corporate revenues among the major conglomerates would not be enough to lift the market at this time. That is why institutional firms are merely trading among themselves to meet their daily trading quota in the market. A lesson that investors should take some consideration as broker's revenues are derived from daily turnover volumes especially if they are coming from Foreign inflows.

    Market Transparency indeed has more room to improve in the Philippine Stock market. Unfortunately not a lot of retail investors or traders rise to the occasion regarding this matter.

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  5. The #PSEI has declined further to a price level at 7537 making it an interim week's trading range of -391 index points from the week's high at 7928. And when it's combined total for three week period ending April 20 would be at -727 pts. Which is more than the HI/LO trading range for March 2018.

    Thus would now be a total of 1541 points fro the PSEI peak high at 9078 over an 11 weeks period alone . This massive decline is indeed a major bear market correction well within a major bull trend to say the least. But it is how perceives to look at it which draws out different conclusive analysis for that matter.

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  6. MegaTrade101 Lastly, as we came across Bloomberg PH's pm session; they claimed that when they called Metro Pacific HQ and asked why their stock prices have declined 35.47% YTD, -5.15% over a three year period; the company representative said that they do not know why.

    A major PSEI member would not allow to see their stock price to decline in double digits without being able to anticipate or at least hedge to protect and /or preserve the value of their stock. Surely they do but would not disclose such strategy publicly.

    So this is what we mean that certain market transparency should be considered to retain market integrity to say the least. This is what investors need to know as part of their fiduciary duty to their shareholders as a public company.

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