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Philippines : Mimicking The 2007 Bubble

|Includes: iShares MSCI Philippines ETF (EPHE)

The Philippines for the past month has been attracting lot of waves recently. Economist and Fundamental analyst were saying the market is in major growth where is trend shift of paradigm that is building up. Here and there, news flow information were saying Billionaire's are set on expanding there businesses, Sectors such as food, banks, power and infrastructures. Lots of foreign fund managers going in, stock that are up 50% for past 3 months had been going placement. Lots of IPO's recently such as Philippines Savings Bank (PBB), Asia United Bank (AUB), Melco Crown Philippines (MCP), and the recent introductory listing Del Monte Philippines, where now they are all by battered selling. The crowd last month was astronomically hype up where everybody wants to be in the stock market, the crowd mentality was eurphoric. I am afterall was guilty also to be one of the person that is bullish. Once extreme selling has occurred, market participants are awakened to what's happening and so Iam now negatively bias. As I consult the chart, I saw a pattern that is evolving. The recent selloff that occur in world market was catastrophic, and PSE was not one of the them that standoff from the crowd. The warning that alarmed of withdrawing liquidity in US, the abenomics that is now would be doomed to fail is now in question. Would technicals discount all this scenarios that is happening? I discovered in the chart that there is time price cycle for bull and bear markets. Bull markets in Philippines lasted for about 4 - 5 years span based on just this data. The recovery that it did in year 09 was fast recovery and maybe premature because of money printing. My count on the end of the bull market would hold if PSE would be down for a week and a steep rally is expected to a new high of pending 2 months, thus the end of bull market would reinforce. Fundamentals would argue that there maybe a trend shift paradigm that would take place and emerging market takes the lead for a super bull run, another five years maybe. Maybe I hope so, Im still holding some issues of mine but that is not the case that happen in 07. Happy trading to us whatever happens.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.