PSE and DOW 3-13-2011

We finally found the bottom!! With PSE crossing with 200MA as a support last week, and rising MACD and positive RSI Divergence seen after the week, I see PSE bottomed out already or still in the process of bottoming out. I prefer it in its bottoming out period, so that there is still chance to revisit even near 37xx or even flat 3800. Then here we go all spend our cash and dive into the market.

The market really just did the correction phase for the past 4 months since we really have a very high PE ratio of 20-22 when he hit the 4400 for PSE. Imagine MBT hitting 84, while its only earning 3-3.5 Pesos per share, SMC hitting 190 with just 5-6pesos per share earning and so on. I think this market now is reasonable after all the 2PO and hyped stocks in the market. For now, it depends on the individual stocks to outperform well and show they deserve a higher buying price.

I will explain further below the tanking Method the DOW should behave in order for us to NOT get a new weekly lows. Even though we still expect up to 5-6% correction, I really think a few downtrend days really is a good opportunity to enter the market.

After the Low of July 2010, the U.S. market did really good in terms of its equities and earnings of each companies, but getting a straight 30% from 10 months is NOT a good behavior either, so we did expect this coming correction that may last for just few weeks or up to 2 months. And it did really correct just after Feb 22. Having a computation how many days/weeks are we in the correction phase, I suggest we are in the 2nd to 3rd week of the correction.

Using Elliot wave analysis, I have illustrated with the Chart the possible direction of this correction, which has a target bottom of 1-2 weeks from now. Around near end of March.

BUT... with Saturn, the Sun and Earth lining up into the same Axis. I am somewhat scared if it could really bring disaster to our beloved Earth which can sweep all the gains and end this Bull market ASAP, OR with so much hype, there will be a sell off into 3rd or 4th week of March, and no disaster comes, everybody gets back into the market and continue our bull market, and can make the scare a good entry point to get back into the market.

Lets see and God Bless our Mother Earth.