DOW JONES and PSE 2-24-2011

INDU went to highs of 12391, overextending to last week highs, our wave count really didn’t expect this to reach 5 mini waves in this current rally, also, we are up 30% since the July 2010 bottom, history says that no market can go higher than this in one straight line, needs to take a rest for a few months, the more the rally, the greater the correction is, estimate correction for my analysis (with the help of A. Caldaro-owner of this Graph).

1. We are in the Primary Wave 3, Major 1, Minor 5 – expected correction is 10% at least, with at least 1 month time.

2. We are in the Primary Wave 3, major 1, minor 3 – expected correction is 4-6 %, then at least 2 weeks time, then rally again for the minor wave 5 to end the Major 1.

I’m already upset that this uptrend continue to overextend to highs with an average of 78 RSI for the past few weeks (3x it hit 78 RSI and had 1% 1-day correction only), too strong for the market, really needs a good correction, let us see in the coming days and weeks if we will shift the trend to temporary correction.

PSE still hitting new weekly lows, coming back to the lows of 37xx led by TEL and GLO and other blue chips, Banks getting weekly lows also with RCB leading the breakdown hitting as low as 24.95, this bank really is the cheapest value now with 3.5p/E ratio, but not a favourite bank stock for traders. PSE still short term and medium term downtrend, but 200MA already crossed this week, might be a support, but might be not also, I have drawn a special uptrend line in parallel to our uptrend resistance, estimate support that SHOULD maintain the market to remain uptrend is 3600. I’ll just wait for another weeks until DOW gets the correction, until I blast PSE stocks. DOW please have the expected correction NOW! – don’t want to wait anymore... gets boring.

BDO, FLI and AC 2-13-2011

Banks were one of the biggest damages with this entire correction. Banks has gone down to their 40s level since hitting their highs. MBT even just got 55 from its 84 peak, almost cut into half, yet I still assume that 84 is way to overpriced for MBT, with a PE ratio of 22. With its 55 price today, its now into its normal 17PE ratio.

BDO did not hold the initial 50 support, and had an immediate selloff to 47. We had a BUY-rating on this stock last

http://theamazingchart.blogspot.com/2011/01/bdo-rcb-mpi-1-30-2011.html, but went off due to heavy selling and breakdown of 3800 support. Chart still looks good on its long term uptrend, but its RSI is really alarming and very tempting, RSI at 17? Way too oversold for a bluechip, im still accumulating this stock, knowingly each oversold phases really have a good bounce off, “baka makaikot”. With current price of 47, its now in normal value of 15PE ratio. 2^nd cheapest stock in terms of earnings, next to RCB. Though RCB’s fans are not that many.

We managed to discuss FLI last http://theamazingchart.blogspot.com/2011/01/2nd-liner-properties-fli-and-meg.html, and talked about its a mess to property sector and FLI holders when it hits near 1.00, and it did happened to mess up recently. Personally, i love this stock, very tradable range, but at a price of 1.04, this is the cheapest Property stock available with a PE ratio of 9 only. Though its a 2^nd liner property stock. ALI and SMPH has 18PE ratio, im just risking the 2^nd liners with enourmous earnings. 2^nd cheapest property stock is VLL, with a PE ratio of 10, though traders here are really involved in massive Political issues- the one thing I really avoid, but who knows, it might get a 20% boom in one day like old times.

The old time riches. Ayala Corp. In my own opinion is now at 8^th largest overall company in terms of value in Philippines and nearing the double digit runner-ups, lagging from rags-to-riches new companies like Andrew Tan, Cojuanco’s , energy’s, SM, CEB and massive new IPOs etc. Overall, Ayala malls are doing great, BPI doing great also with 16% YoY growth for 2010, MWC’s double digit growth, but its telco GLO, looks like its on a decade downtrend, pulling AC’s value down to 320s (GLO -22% YoY 2010, which amounts to around 5-10B loss of value for AC). Chart looks good, had a healthy correction, but its telco is dragging down to its low support of 300-320. Im a buy on AC, but the earnings of its components really will have a bad upcoming years, GLO will definitely be in a downtrend, and BPI in my opinion will have just 5-7% YoY increase this year. Thus no promising numbers to make AC a highflyer with a return of a slow 380-400pesos fair value.

PSE long term outlook 2-10-2011

PSE markets continue to drag down to fresh new monthly lows. It was at the 3800 initial long term support around 10am, but went down strongly when it fell down its support hitting 37xx. The current closing is near its 200MA of 3747. Will this be the bottom already? I believe we are 75% there, but cannot guess if this is really it, specially it went down to its initial long term support.

We have set various supports again for our very own (slightly manipulated market- Im refering to SMC,PCOR,SMB,PF and all other jackpot winners of the probable 2PO):

1. 200MA – 3747 (red line) (50% chance bottom for short term)

2. Short term downtrend support line of around 3700-3750 ( 50% chance bottom for short term)

3. 3550-3600 pts – Breakout point and Long term Uptrend line (100% chance of bottom for uptrend Support, but are we getting that LOW just to hit the bottom?)

DOW Jones 2-6-2011

DOW cant stop rallying each and everyday. We were expecting the slight correction since Jan 15, 2011 but DOW finishes on the GREEN side everyday and seems that it has overextended a few notches.

Normally, Short term Rallies extends to 2-3months, then few weeks of correction, and medium term rallies extends to 6-8 months before a 1-1.5month correction. Today's count is 7 months and still running, might be getting towards to the 8th month rally, or might be getting that 1-1.5 months of correction, we will see this Feb and March 2011.

With DOW's 3yr high since the late economic dip. GDP's getting better for Q4 2010, Jobless for end of Q4 2010 was so good with a 9.0% unemployment rate, from its 9.4% last Q3 2010. Overall, its a bull market with growing economic indicators, its just that, i feel these times when everyday for DOW is an a positive note, especially on a 7month advance, i feel like there would come a time that IT will give back some of those. - for a healthier and tradable market to hit new healthy highs in the near future.

My trades: PSE has been so weak, everytime DOW goes UP, PSE goes down. And if ever DOW finds it short term peak, will our PSE be finding its short term BOTTOM also? Let us see in the consecutive weeks.

PSE (peso) - 80% in. - have a gut feeling that we are near the bottom of this long correction around 3800.
AsiaPacific(dollar) - still 100% cash