Sunday, February 18, 2007

Its bull run, still

I have to withdraw my endorsement of Jericho Petilla's candidacy. Let us not vote for him as Senator - he's no longer a candidate. I am disappointed.

Now let us talk about the Peso and the Philipine stock market. OK, I guess the momentum has been built...a bull run in the stock market and the Peso reaching new highs in the past few weeks and days. This is what I have been saying the past several months...the momentum is there.

Now the crucial question that we should ask, until when? When can we expect to unload and reverse?

As in physics (I hope this really is applicable), this momentum will change once a stronger force opposite its current direction is applied. What are these forces?

Those that we can predict apart from calamities and others are as follows: (again I posted this last January 4).

(1) if the elections in May 2007 gets messy, get out;
(2) if the budget failed to pass, get in; (the budget is now approved making sustained low deficit hard, and probably the budget would not be balanced until 2010)
(3) if Smith gets convicted in the Supreme Court, get out ASAP;
(4) if the El Nino dry spell gets worse, get out slowly;
(5) if the US economy improves, and the Fed increases its rates, watch your trade carefully.

Thus far, only number 2 has an update. As in any game, the most profitable position we can do is hold, watch, and sit tight until a good reason to change directions presents itself.

Good Luck.