At What Level Will The PSE Index Bottom Out?

[dragon]

as thread reqeusted by anted.

cite when do you think, and what level pse will have bottomed out.

and reasons please

[hanibee]

2100 - Fibonacci retracement

[dragon]

from what to what. and what %

[haribon2008]

[cedricabisa]

I believe the bottom is 2000 for the pse +/- 100 pts. DJIA i think nasa 8000 level.

[LAL]

2100 august. hula-hula lang. see financemanila technicals thread.

[roiking]

Hard to tell, Its the push and pull between the US$ decline + the increasing OIL price AND cash flow investment into China and Asia. Chinese boom may or may not be closely beneficial to our country. Many investors are converting their US$ into the Chinese Renmenbi too and depositing them into Chinese Banks.

More interest to invest into China now I suppose? A matter of time to see our diesel fuel to cost us 60 pesos per liter, as our Pesos drops further? Hope our BSP increases the rate, and also put in big portion of reserves into the Chinese Yuan, or gold...But our politicians seems less interested to venture closer with China, unlike Indonesia now finding more ore sales and infrastructure developments.

This pesos depreciation is a significant signs. Others are having to import Rice, Corn and Sugar. And oil. For a population of 80 millions. All these are draining our dollar reserves. Stock market in the mercy of Hot money.

[bayan]

1800

[Mark T. Market]

On the "when" question, based on seasonals, for bull years, August is a good time for a bounce. For bear years, October is favored:



This isn't mandatory, but just an average over history.

More here:

http://marktmarket.wordpress.com/tradin ... -the-psei/

[antediluvianist]

The "it's because of speculation" arguement of the oil producers would be credible if there were more volume in the oil exchanges that deal with oil futures. But in fact the volume is down from 2007.

I feel the key to how low the PSEi will go is still the oil price, and it affects the DOW and the other major exchanges of the world, and the PSEi just tends to follow, although there may be a day here or a day there when it doesn't, but in general and over a longer term, it does. Higher oil price = higher inflation in many things that depend on energy to be produced or grown (practically everything) = cost-profit squeezes, lower profit margins, and higher interest rates (N=R+I) implying lower GDPs = all the preceding factors plus others induce lower stockmarkets.

I am at this time reviewing the future oil requirements of South America (caramba!). The fuel needs of China and India are in the news and horrible enough, but South America is growing too, damn those overpopulating Church-going non-condom-users. Also, the Campeche oil field of Mexico, the second most-productive oil field in the world, is in decline.

Will revert when I have some numbers.

In the short term, any bad hurricanes during the soon-to-be-upon-us Atlantic hurricane season will increase the oil price. Remember Katrina's damage to the oil platforms in the Gulf of Mexico and to refineries in Louisiana/Texas? The places which have some excess production and refinery capacity are all in the Middle East, geographically very distant from where the shortage will occur. Relief would take time = effect on oil price.

I am pessimistic, ergo I was interested in seeing the views of the other members of this forum regarding how low the PSEi will go. Charts from previous PSEi trends are of course welcome, but in my view we are now in a discontinuous- from the past - set of global economic conditions. It's a different world. It's uncharted territory. And it looks bad. IMHO.

[antediluvianist]

Following from above :


From the "Climate Prediction Center"

2008 Atlantic Hurricane Outlook Summary

The Climate Prediction Center’s 2008 Atlantic Hurricane Season Outlook calls a 90% probability of a near-normal or above-normal hurricane season. An above-normal season is most likely (65% chance), but there is also a 25% chance of a near-normal season, and a 10% chance of a below-normal season. See NOAA’s definitions of above-, near-, and below-normal seasons.

This outlook is based on the analysis and prediction of two main climate signals:

1) The ongoing conditions that have been conducive to above-normal Atlantic hurricane seasons since 1995 (called the multi-decadal signal), which includes above-normal sea-surface temperatures in the eastern tropical Atlantic Ocean.

Even though the last two Atlantic hurricane seasons have been near-normal, there remains no indication the current active hurricane era has ended.

2) Possible lingering effects from La Niña or ENSO-neutral conditions.

Currently, La Niña seems to be waning, but its atmospheric impacts often persist even after Pacific Ocean temperatures have returned to normal. There is considerable uncertainty among the forecast models as to how strong the La Niña influence will be.

Climate patterns similar to those expected this year have historically produced a wide range of activity, and have been associated with both near-normal and above-normal seasons. Allowing for uncertainties, we estimate a 60%-70% chance of occurrence for each of the following ranges of activity:


12-16 named storms,
6-9 Hurricanes,
2-5 Major Hurricanes,
An ACE range 100%-210% of the median
These likely ranges have been observed in about two-thirds of past seasons having similar climate conditions to those expected this year. They do not represent the total ranges of activity seen in those past seasons.

Most of the 2008 activity is expected to take place during August through October (ASO), the peak months of the Atlantic hurricane season.

The Climate Prediction Center will issue an update to this outlook in early August, at the start of the peak months of the Atlantic hurricane season.

[Mark T. Market]

Interesting AnteD. On climate, I've always held the notion that a portion of our economic activity is generated by spending on typhoon/calamity repairs. The absence of any super typhoons may have a detrimental effect on the economy.

Haven't tested the idea yet though.

[Mark T. Market]

As for oil prices, I have noticed that spikes in commodities do coincide with bear markets in stocks, but the spikes in history have been brief, while the uptrends in stocks have been quite long and drawn out.

I relate this to the activity of speculative funds who need a haven for returns while stocks are tanking--and commodity plays, like gold and oil, provide that haven.

Coincidentally, stock markets are tied to corporate earnings, so in times when earnings are squeezed--like inflationary periods for instance, drives market prices down, and funds flock to commodities to hedge their losses. To close the loop: speculation in commodities also contribute to inflationary trends, and thus a vicious cycle emerges.

But looking at inflation as a phenomenon outside of speculation, it will be difficult to provide a way out because we ignore the significant contribution of speculation. I look at it the other way--speculation occurs first, then inflation happens (because in the commodity pits, no one is an economist). If this latter hypothesis is true, then we have a way out: once prices are overextended, and speculation to the upside ceases, prices break to the downside, and the inflationary trend is arrested.

Now what drives speculation: interest rates, margin, and monetary policy ultimately. Which is also consistent with traditional economic views: that a loose monetary policy creates inflation. The cause and effect relationship holds, but it masks the role of speculative activity which occurs in between. Low rates make speculation more rampant, which creates asset bubbles--first in stocks, then in commodities.