Just a Commentary

I wasn't able to trade much of the stock market rally this year primarily because I was driven away by fear. I only started to take notice of the stock market when it was already July, and by then a lot of stocks already had a good run up, particularly the blue chip stocks.

I also dropped my Technistock service due to the lackluster performance of the stock market in 2008. There was no money to be made, only money to be lost.

Technistock was a great service because not only did it have charting (although incomparable to Metastock), it was linked to the stock market. The ticker moves in sync with the main board at the PSE so if there's a hot stock for the day, you can become an instant day trader. You know what stock to buy based on the momentum of buying.

Perhaps if the bull market returns, then I'd reconsider booking my subscription to their service.

So now, I just rely on the Reuters website (thanks to a friend for the tip) and read the news from time to time. The chart gets some getting used to, but it does serve the same purpose, albeit not 100% as efficient as I'd like it to be.

Last week was a dull week, at least for me. I missed out on ACR which made a nice move in a span of about 2-3 days. I don't know why it did though. I think there was something about mining rights there.

I'm still on my toes when it comes to the stock market as most of the stocks going up are the third liners and basura stocks. I would believe that the bull run still has legs if the blue chip stocks can inch higher and the volume is high. Remember, the index has risen by a substantial amount since the 2nd quarter of this year.

I personally think that the stock market has three waves -

The blue chip wave - bullishness creeps into the market, foreign buying is back

The mid cap wave - local players follow the lead of the foreigners, and they also start buying the mid cap stocks or second liners

The tidal wave - all sorts of rumors of backdoor listing, new mine find, speculation, enters the market and a lot of basura stocks and "dead" stocks are reincarnated. This signals the end of the bull market and means that the market is already at its peak

I think most of the stock prices have gotten way ahead of the actual profits the companies will be declaring. So that's a cause for concern, definitely. Then again, our index is still above 3000 so bullishness may still be alive.

Against a backdrop of lousy economic data, I wonder if there should be reason to be bullish for next year.

One thing I'd propose you to look at is the level of money supply. These days I'm sure people are out hunting for good returns. If there is excess money, then obviously, some of them may find its way into the stock market, thus spurring another run. And it doesn't have to be directly invested in stocks. Money can find its way to mutual funds, UITFs, insurance policies, etc, and the fund managers of all of these will just invest them in either the bond market... or the stock market.

Dubai was supposed to be a shocker, but the markets (outside of Dubai) seem to ignore it. I think that if there's another country that faces debt payment difficulties, then it just goes to show that the world economy still has a long ways to go in terms of recovery. It seems people are ignoring the bad news, and perking up their hopes based on the little good news that's out there.

The problem for next year could be oil prices. Due to speculation that the world economy will recover, buying up the contracts and what not may cause oil prices to rise faster than most economies' ability to grow.

The problem will just begin when that time comes. So don't forget to set money aside for a stormy day. The time for joyous celebration has not yet arrived.