Every country in the world is now in pressure to raise their Key Rates to fight Inflation. China raised 2x last month, Korea raised 1x, Indonesia raised 1x, others will surely follow including the Philippines maybe this Feb,March 2011. Raising key rates has something of an effect to the stock market. If interest rates in bank offer as much as 10% annual, people in the stock market would tend to shift all funds to 100% safe interest rates.
Philippine Key interest rate stands at 3.xx%, and lets say in around 3 yrs time, inflation is high, having a need to increase interest rates at 6.xx%, that, i guess, 50-50 will stay in banks-equities.
For now, interest rates are not so "interest"ing to have our money multiply with. Equities are still good with usual 10-15% P.A. for the PSE since 1990s.
I still assume that we will follow the short term downtrend BLUE lines which can go as low as 3800 in accordance with the 200MA and long term PINK uptrend line, and that's still my target price to get all my Cash in.
U.S. equities had a resistance to hit with, and guess what, Egypt suddenly rattles with its President sending the U.S. Market to around 2% down in 1 day, could this be the expected correction I've been trying to wait?
If this is really the expected correction, I doubt it would not be very huge in numbers, I would personally welcome a huge correction though :) Rough estimate would be the Pink lines for the short term downtrend, which is needed in ALL equities to correct before hitting new highs.
In its medium term uptrend line, we draw the greyish blue lines to indicate the support to maintain its uptrend trend. Breakdown of its 11,000 support may reverse its uptrend.
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