History of the Philippines Composite Index
1999

20th December: The index briefly fell through our long term support, increasing the probability that the market would fall to 1,550. However, the damage was quickly repaired and we are back on support. Despite this good support, there is still nothing bullish in the market. Volume is healthy, but still modest.

The first chart below shows a rounding bottom scenario. According to this scenario, the index could meander about until mid-February, before rallying. That is a bullish scenario. Apart from that, there is still the spectre of the head and shoulders top to deal with. I guess that the chances are low that the top will send the index down to 1,550. But the long term support is the crucial point to watch. A fall below 1,900 would make the fall to 1,550 more likely.

Current Prediction

Short term: none

Medium term:  a head and shoulders top points to 1,550. But I would not confirm this target unless the index falls below 1,900, due to the strength of the Asian region.

Long term:  A long term reverse head and shoulders pointing to 3,400. Cancelled on the daily chart but still valid on the weekly chart.

Currency: reversal failed. Short term could see a fall back to 41.

29th November: Volume picked up a tiny bit last week. That could be good news, especially as the index is turning on a long term support. Let's hope that this is the start of something big.

Current Prediction

Short term: none

Medium term:  a head and shoulders top points to 1,550. But I would not confirm this target unless the index falls below 1,900, due to the strength of the Asian region.

Long term:  A long term reverse head and shoulders pointing to 3,400. Cancelled on the daily chart but still valid on the weekly chart.

Currency: reversal failed. Short term could see a fall back to 41.

22nd November: The index is now on a good long term support. If it is to make a double bottom reversal, the current level would be a good place for that bottom to occur.

Current Prediction

Short term: none

Medium term:  a head and shoulders top points to 1,550. But I would not confirm this target unless the index falls below 1,900, due to the strength of the Asian region.

Long term:  A long term reverse head and shoulders pointing to 3,400. Cancelled on the daily chart but still valid on the weekly chart.

Currency: reversal failed. Short term could see a fall back to 41.

15th November: This market shows no signs of reversing. It has a bearish target of 1,550. However, the index is on good support. I would be surprised if the previous bottom of 1,900 did not hold, given the strength of the region.

Current Prediction

Short term: none

Medium term:  a head and shoulders top points to 1,550. But I would not confirm this target unless the index falls below 1,900, due to the strength of the Asian region.

Long term:  A long term reverse head and shoulders pointing to 3,400. Cancelled on the daily chart but still valid on the weekly chart.

Currency: target of 39

8th November: A head and shoulders pattern clearly points to 1,550. However, I doubt that we will see this target. The index turned on a good support at 1,900. I would expect the index to hold at this level, simply due to the strength of other markets in the region (Hongkong, Korea, Indonesia, Singapore and Thailand), which have recently given bullish indications.

On the other hand, there is no good sign of a bottom for this market. The prospect that 1,900 was the medium term bottom is based purely on support and the regional context.

Current Prediction

Short term: none

Medium term:  a head and shoulders top points to 1,550. But I would not confirm this target unless the index falls below 1,900, due to the strength of the Asian region.

Long term:  A long term reverse head and shoulders pointing to 3,400. Cancelled on the daily chart but still valid on the weekly chart.

Currency: target of 39

25th October: The index fell through a  good support and hit our first double top target at 1,950. We now have a lower target of 1,850. At that level the index is well supported. Long term prospects look very good provided the index holds at 1,850. The huge volume could well support a massive pattern pointing to 4,200 by next year.

Current Prediction

Short term: double top points to 1,850.

Medium term:  top points to 1,950 - done

Long term:  A long term reverse head and shoulders pointing to 3,400. cancelled on the daily chart but still valid on the weekly chart.

Currency: No support before 43.5
 
 

11th October: Not much occurred last week other than a nice surge in volume, which could pave the way for a double bottom.

Current Prediction

Short term: none

Medium term:  top points to 1,950

Long term:  A long term reverse head and shoulders pointing to 3,200. Volume is good.

Currency: No support before 43.5

4th October: It's too early to tell, but there are some signs that the index could be bottoming at the current level.

Current Prediction

Short term: none

Medium term:  top points to 1,950

Long term:  A long term reverse head and shoulders pointing to 3,200. Volume is good.

Currency: No support before 43.5

27th September: The index is safe at the moment, but a fall below 1,950 would give a target of 1,500. Currency could fall to 43.5 before finding support.

20th September: The index is on a good support and there is a possible short term double bottom forming. But otherwise, nothing suggests an imminent rally. If the index adds 100 points early this week on volume of 3 billion pesos or above, there's a chance of a rally to 2,280 in the short term. Long term targets are still valid.
The currency is supported at the moment. But our target of 41 is still valid. And there is a possibility that the currency could fall to 43 in the medium term.

13th September: The index is testing the neckline for our pattern that points to 3,300. The greater probability is that the index will turn up and rally to 2,600 - 2,800. But if it falls below 2,000, we should be prepared for the worst case scenario: a return to 1,500.

30th August: Last week did not see the rally that we might have hoped for, following the breakout from the falling wedge. However, the long term picture looks encouraging. In particular, the index is nicely supported on long term supports and the symmetry that I had been expecting earlier this year is now appearing.

Current Prediction

Short term: wedge points back to 2,600.

Medium term:  double top points to 1,900, but the short term wedge or the support at 2,100 could interrupt this target.

Long term:  1. A long term reverse head and shoulders pointing to 3,300. Volume is  persuasive and probability of reaching target is high.
2. A long term weekly head and shoulders top points to 3,400 probably at the end of this year or early next year.

Currency: Target of  41

23rd August: The index broke out of a falling wedge last Friday, rebounding over the neckline of a head and shoulders top, and cancelling the bearish prediction of 1,850. The long term view of the index appears as a pullback to the neckline of the pattern pointing to 3,300. This prognosis is predicated on the index remaining above the supports at 2,000.

Current Prediction

Short term: wedge points back to 2,600.

Medium term:  double top points to 1,900, but the short term wedge or the support at 2,100 could interrupt this target.

Long term:  1. A long term reverse head and shoulders pointing to 3,300. Volume is  persuasive and probability of reaching target is high.
2. A long term weekly head and shoulders top points to 3,400 probably at the end of this year or early next year.

Currency: danger of a fall to 41

16th August: The index has support at the current level. A falling wedge could end the short term bearish trend.

Current Prediction

Short term: double top points to 2,140, subject to channel support breaking.

Medium term:  double top points to 1,900, but the short term wedge or the support at 2,100 could interrupt this target.

Long term:  1. A long term reverse head and shoulders pointing to 3,250. Volume is  persuasive and probability of reaching target is high.
2. A long term double bottom on the daily chart points to 3,550 - cancelled
3. A long term weekly double bottom points to 3,800 probably at the end of this year or early next year.

Currency: danger of a fall to 41

9th August: The index has confirmed a double top pointing to 2,140. There is good support at the current level. If the index breaks 2,400, we cancel the prediction. Otherwise, expect the target. The long term is still bullish. Even if the index hits 2,140, there is a scenario that could take the index to 4,000.

Current Prediction

Short term: double top points to 2,100, subject to channel support breaking.

Medium term:  none

Long term:  1. A long term reverse head and shoulders pointing to 3,250 has broken out. Volume is now persuasive and probability of reaching target is high.
2. A long term double bottom on the daily chart points to 3,550.
3. A long term weekly double bottom points to 3,800 probably at the end of this year or early next year.

Currency: resistance at current level. If it breaks, target would be around 30. But if current support fails, support would be at around 43.

2nd August: A short term double top points to 2,100. But the index is resting on a good support. We should also consider the fortunes of this market in the context of the whole region, which looks well supported. Thus, if the Hongkong, Japan, Korea and the other ASEAN markets are about to resume rallying, chances are that the PSE will also rally, and the target of 2,100 would be cancelled.

Current Prediction

Short term: double top points to 2,100, subject to channel support breaking.

Medium term:  none

Long term:  1. A long term reverse head and shoulders pointing to 3,250 has broken out. Volume is now persuasive and probability of reaching target is high.
2. A long term double bottom on the daily chart points to 3,550.
3. A long term weekly double bottom points to 3,800 probably at the end of this year or early next year.

Currency: resistance at current level. If it breaks, target would be around 30. But if current support fails, support would be at around 43.

19th July: Nothing happened last week. We're still waiting for the next neckline to pop. The index has a couple of more weeks of dithering if it so desires.

Current Prediction

Short term: none

Medium term:  none

Long term:  1. A long term reverse head and shoulders pointing to 3,250 has broken out. Volume is now persuasive and probability of reaching target is high.
2. A long term double bottom on the daily chart points to 3,550.
3. A long term weekly double bottom points to 3,800 probably at the end of this year or early next year.

Currency: resistance at current level. If it breaks, target would be around 30. But if current support fails, support would be at around 43.

2th July: The index is hesitating at a neckline at 2,600 - 2,800. Once passed, the index will have confirmed a target of 4,000.

28th June: The index faces it's next challenge at 2,600. A short term pattern suggests that this level will soon be tested.

But the weekly chart appears to have anticipated the daily charts. A little consolidation on the weekly chart has allowed us to confirm the neckline for a double bottom, giving a target of 3,800.

Current Prediction

Short term: double bottom points to 2,600 or thereabouts.

Medium term:  none

Long term:  1. A long term reverse head and shoulders pointing to 3,250 has broken out. Volume is now persuasive and probability of reaching target is high.
2. A long term weekly double bottom points to 3,800 probably at the end of this year or early next year.

Currency: resistance at current level. If it breaks, target would be around 30. But if current support fails, support would be at around 43.

21st June: The index turned on a channel support shown in the daily and weekly charts. The next resistance is at 2,600 and lasts for around 200 points. If the index passes 2,800 on good volume, we would have a target of 4,000.

Current Prediction

Short term: none

Medium term:  none

Long term:  a long term reverse head and shoulders pointing to 3,250 has broken out. Volume is now persuasive and probability of reaching target is high.

Currency: resistance at current level. If it breaks, target would be around 30. But if current support fails, support would be at around 43.

7th June: The index is poised on a medium term support. If it turns we could see the index rally to resistance at 2,600. If it fails, we could see a correction to as low as 2,000. But such a correction would likely give a new target of 4,000, albeit not, perhaps, until next year.

Current Prediction

Short term: none

Medium term:  none

Long term:  a long term reverse head and shoulders pointing to 3,250 has broken out. Volume is now persuasive and probability of reaching target is high.

Currency: resistance at current level. If it breaks, target would be around 30. But if current support fails, support would be at around 43.

31st May: A possible short term top is forming with target of 2,100. Such a fall would conduce to my long term scenario with target of 3,600.

24th May: Our target of 3,250 is still valid and volume is building nicely. But a correction at the current level to the region of 2,300 or thereabouts, would give an opportunity for a larger pattern, indicating a new high for the index.

10th May: The index inched up a few points last week, breaking a weekly resistance. But the index closed on a double resistance on the long term daily chart. Possible correction at the current level. Otherwise the next medium term resistance will be 2,800 and the next long term resistance will be 3,000. The fund chart also supports consolidation at the current level.

Current Prediction

Short term: none

Medium term:  none

Long term:  a long term reverse head and shoulders pointing to 3,250 has broken out. Volume is now persuasive and probability of reaching target is high.

Currency: none

3rd May: The market inched up to a medium term resistance point. Long term target of 3,250 is still valid. Volume now clearly supports the target.

No real short or medium term targets. (Our pennant isn't moving the market persuasively). My medium term consolidation scenario has a chance.

26th April: A long terms scenario, offering hopes of a new high for the index, would require a few months of correction. This period would afford opportunity for more volume to build and give a convincing long term reversal pattern. On the other hand, a tiny pennant could see a surge to 2,700 in two weeks. A sharp rally this week would support the latter scenario.

Current Prediction

Short term: a small pennant could see 2,700 in one or two weeks, otherwise it would carry no significance.

Medium term:  2,500 is still valid - but time is running out.

Long term:  a long term reverse head and shoulders pointing to 3,300 has broken out. But volume is not persuasive. If we see volume build up to four or five billion pesos per day, probability of 3,300 will increase.

Currency: short term reverse head and shoulders pointing to 37.

19th April: Volume is improving. But it is not yet persuasive. A long term scenario shown below gives a short term upside of 10% and then a breakout in September or October. It's just a hunch. But if the market fails to get above 2,400 or 2,500, then there will be a chance for consolidation.

Current Prediction

Short term: none

Medium term:  2,500 is still valid - but time is running out.

Long term:  a long term reverse head and shoulders pointing to 3,300 has broken out. But volume is not persuasive. If we see volume build up to four or five billion pesos per day, probability of 3,300 will increase.

Currency: short term reverse head and shoulders pointing to 37.

14th April: The index broke out of a long term pattern as did the long term fund chart. But volume is still not persuasive. If we see volume build up to four to five billion pesos per day, we can confirm a long term reversal.

Current Prediction

Short term: none

Medium term:  2,500 is still valid - but time is running out.

Long term:  a long term reverse head and shoulders pointing to 3,300 has broken out. But volume is not persuasive. If we see volume build up to four or five billion pesos per day, probability of 3,300 will increase.

Currency: short term reverse head and shoulders pointing to 37.

26th March: A short term scenario could take the index to 2,100. But symmetry in the formation of a long term reversal pattern suggests that this level might not be passed until June or August. The prospect of a fall to 1,600 is still possible.

Current Prediction

Short term: none

Medium term:  2,500 is still valid - but time is running out. The prediction is now doubtful.

Long term:  the long term trend is still down.

Currency: currency could weaken to 44

22nd March: The little surge in volume that occurred last week is not enough to raise hopes of a rally. However, we could revise this sentiment if volume picked up to around 3 or 4 billion pesos per day over the course of this week. Failing that, the market looks as though it is just waiting around to fall to 1,600.

Current Prediction

Short term: none

Medium term:  2,500 is still valid - but time is running out. The prediction is now doubtful.

Long term:  the long term trend is still down.

Currency: currency could weaken to 44

15th March: The market has started to make a descending triangle pattern that could see 1,600 in the medium term.

Current Prediction

Short term: none

Medium term:  2,500 is still valid - but time is running out. The prediction is now doubtful.

Long term:  the long term trend is still down.

Currency: currency could weaken to 44

8th March: Today's surge of 5% cancelled our bearish short term head and shoulders top. We now have a breakout from a falling wedge, which suggests a return to the previous top of around 630. However, there will be resistance at that point and there is still danger that a larger top could form, with a worst case scenario giving a target of 330. All depends on volume.

The safer course would be to await a good reverse head and shoulders or double bottom pattern that has good volume. This would give a clear indication that the trend is up.

Current Prediction

Short term to medium: wedge pointing to 630.

Long term: double bottom points to 800 on the daily and weekly charts. Volume, however, is not persuasive and considerations of symmetry suggest that a larger pattern could require a few more months of consolidation in the range of 500 to 630 (just a hunch)..

Currency: turned on resistance. Support at around 1,300.

8th March: The index picked up volume, increasing chances that the target of 2,500 could be reached. There's still time. But the long term weekly resistance was hit last week. Let's see if this hurdle can be removed this week.

Current Prediction

Short term: none

Medium term:  2,500 is still valid.

Long term:  the long term trend is still down.

Currency: currency could weaken to 44

1st March: It could go up or it could go down. Long term weekly support is still holding. Volume build up slightly last week and our target of 2,500 is still valid. But the market lacks life and a head and shoulders top that is forming could see a fall to 1,600.

15th February:  Our target of around 2,500 is still valid. But volume is falling and the long term picture looks weak with average volume still falling.

8th February: The index broke a short term support today. The small double top could be a precursor of further falls. But there are still valid patterns pointing up. My feeling, based on regional weakness and the resistance in the long term weekly chart, is that the marekts are likely to correct further and that the patterns pointing up to higher targets are going to fail. But we will have to wait and see.

Current Prediction

Short term: none

Medium term:  2,500 is still valid.

Long term:  the long term trend is still down.

Currency: 30, but further weakening could see the currency weaken to 44 and the bullish prediction cancelled.

1st February: A support in the weekly chart broke last week. The next long term support is 1,600. If the index falls below the neckline of our last target, we should prepare ourselves for such a correction.

Current Prediction

Short term: none

Medium term:  2,500 is still valid.

Long term:  the long term trend is still down.

Currency: 30, but further weakening this week will cancel the prediction

25th January: The short term bullish target of 2,850 is cancelled today. But the target of 2,500 is still valid for the time being. Check out the "best case"scenario on the long term daily chart: a reverse head and shoulders with breakout in the middle of the year.

Current Prediction

Short term: none

Medium term: 2,850 cancelled. 2,500 is still valid.

Long term:  the long term trend is still down.

Currency: 30, but further weakening this week will cancel the prediction

18th January: The rally and all targets remained valid by the end of last week. But further falls this week will place further rallies in doubt. The long term weekly chart shows strong resistance.

Current Prediction

Short term: 2,850 if volume holds

Medium term: none

Long term:  the long term trend is still down.

Currency: 30, but further weakening this week will cancel the prediction

11th January: The long term trend is still down. The index has come to rest on two very strong long term resistances. These need to be overcome before the index advances further. But the short term signs are good. The index has made a new reverse head and shoulders pattern pointing to 2,850. If volume picks up, we could see a long term reversal pattern, as has been made in Korea and Singapore.

Current Prediction

Short term: 2,850 if volume holds

Medium term: none

Long term:  the long term trend is still down.

Currency: 30



1998

21st December: The index has been meandering sideways for the past two weeks. But volume is still higher than it was in June, July and August, the months accompanying the left side of the reverse head and shoulders pattern that we are currently monitoring. Therefore, the index still has a fair chance of continuing its bull mode. Long term resistances are still strong, especially around the 2,000 level.

Current Prediction

Short term: 2,500 if the index rallies a little more on strong volume and stays above 1,800.

Medium term: none

Long term: a head and shoulders points to 662 - cancelled. But the long term trend is still down.

Currency: 33.5

14th December: One good day of volume last week failed to make much of an impression with the index. But the crucial 1,800 level held by a whisker. Let's see what this week brings.

Current Prediction

Short term: 2,500 if the index rallies a little more on strong volume and stays above 1,800.

Medium term: none

Long term: a head and shoulders points to 662 - cancelled. But the long term trend is still down.

Currency: 33.5

7th December: A pullback on lower volume is consistent with the prediction of 2,500. However, volume must pick up substantially if the index is to reach target and break some strong long term resistances.

Current Prediction

Short term: 2,500 if the index rallies a little more on strong volume and stays above 1,800.

Medium term: none

Long term: a head and shoulders points to 662 - cancelled. But the long term trend is still down.

Currency: none

18th November: Volume has fallen off over the past few days. This is not a sufficiently large time period to cause alarm. But during that period, the index was rising. It was forming the last stage of a reverse head and shoulders pattern. Thus the prediction of 2,500 carries some doubt. A good surge of volume over the next week will alleviate doubt. Otherwise, we could look out for a tiny topping pattern, such as a double top.

Current Prediction

Short term: 2,500 if the index rallies a little more on strong volume and stays above 1,800.

Medium term: none

Long term: a head and shoulders points to 662 - cancelled. But the long term trend is still down.

Currency: none

4th November: Great performance from the index - nice volume build-up, good chances for a new reversal pattern, long term bearish target is cancelled. But the long term trend is still down. So this whole thing could just fizzle away. Let's see what happens at the crucial 1,800 level. Could take a week or two to get more evidence.

Current Prediction

Short term: none

Medium term: none

Long term: a head and shoulders points to 662 - cancelled. But the long term trend is still down.

Currency: none

23rd October: The short term rally prospects look good as volume picked this week.

Current Prediction

Short term: reverse head and shoulders with reasonable volume has a good chance of seeing the index to 1,700.

Medium term: head and shoulders pointing to 1,050. Almost reached.

Long term: a head and shoulders points to 662. It will only be cancelled if the index closes, one Friday, above 1,550.

Currency: Double bottom points to 40.5

19th October: The index has made a new reversal pattern pointing to 1,700. Chances are good. If the index reaches this target, we can cancel the 1,050 prediction.

Current Prediction

Short term: reverse head and shoulders with reasonable volume has a good chance of seeing the index to 1,700.

Medium term: head and shoulders pointing to 1,050. Almost reached.

Long term: a head and shoulders points to 662. It will only be cancelled if the index closes, one Friday, above 1,550.

Currency: Double bottom points to 41.

5th October: A fall below 1,100 will signal a fall to 970.

Current Prediction

Short term: none, but if the market is down by as much as 20 points on 6th October, we will have a confirmed triangle target of 970.

Medium term: head and shoulders pointing to 1,050. Log target for the same pattern is 1,220.

Long term: there is a double top, albeit invalid, pointing to 1,050.

Currency: A head and shoulders points to 46.5.

28th September: The index does not yet give any sign of reversing. Our immediate target of 1,045 is still valid. Chances are that a target of 900 will soon become valid.

21st September: The rally last week did not erase the medium term target of 1,045.

14th September: The third week of September is upon us. This is the week that I have predicted that the index will reach its target of 1,050. Let's see how good my channel-based time predictions are.

Current Prediction

Short term: none

Medium term: head and shoulders pointing to 1,050. Log target for the same pattern is 1,220.

Long term: there is a double top, albeit invalid, pointing to 1,050.

Currency: A head and shoulders points to 46.5.

24th August: The index is halfway to its target of 1,050. The current supports are good. But there is no sign of a reversal. Currency is now likely to fall to 46.5.

Current Prediction

Short term: none

Medium term: head and shoulders pointing to 1,050. Log target for the same pattern is 1,220.

Long term: there is a double top, albeit invalid, pointing to 1,050.

Currency: A head and shoulders points to 46.5.

12th August: The index is now falling "in earnest" to use the quaint expression of Edwards and Magee. I have nothing much to offer except a few possible supports.

Current Prediction

Short term: none

Medium term: head and shoulders pointing to 1,050. Log target for the same pattern is 1,220.

Long term: there is a double top, albeit invalid, pointing to 1,050. The logarithmic equivalent of 1,467 has passed.

Currency: A valid head and shoulders takes the peso to 43.5 reach. A new head and shoulders pointing to 46.5.

3rd August: A medium term pattern and the long term double top both point to 1,050. Mysterious coincidence? Only hope for a rally would be if there is to be a double bottom. No evidence of the latter. The index is merely approaching double bottom level.

Current Prediction

Short term: 1,550 arithmetic, head and shoulders.

Medium term: Head and shoulders pointing to 1,050. The pattern has a foot at 1,500, which could form a double bottom.

Long term: there is a double top, albeit invalid, pointing to 1,050. The logarithmic equivalent of 1,467 was approached last January. It might be near enough, or we might see the target touched exactly, or passed.

Currency: A valid head and shoulders takes the peso to 43.5. At this point, a new pattern will take the currency to 46.5.

27th July: Nothing to suggest a rally in this market. There are outstanding targets pointing lower. There is also a head and shoulders top pointing to 1,100. But it is too early to confirm this target.

Current Prediction

Short term: 1,550 arithmetic, head and shoulders.

Medium term: Head and shoulders pointing to 1,100. Needs further falls to confirm.

Long term: there is a double top, albeit invalid, pointing to 1,050. The logarithmic equivalent of 1,467 was approached last January. It might be near enough, or we might see the target touched exactly, or passed.

Currency: A valid head and shoulders takes the peso to 43.5. At this point, a new pattern will take the currency to 46.5.

22nd July: Nothing encouraging last week. Crucial support is at around 1,700. (Broken at the time of writing. Come back next week). Below that level, we could see the index fall to 1,050. Current predictions favour this bleak scenari

14th July: The currency and the stock market index both look weak. The index has turned on a short term resistance. The currency is about to break out of a head and shoulders top.

6th July: The odds are that the index will not struggle up beyond 1,870. At this point, I expect it to fail and hit some of our lower targets. Possible salvation in a double bottom. But, as with the rest of the region, volume is lacking. Therefore, we cannot expect the index to rise for long.

Current Prediction

Short term: 1,550 arithmetic, head and shoulders. The pattern is more respectable now that the recent rally has created a right shoulder.

Long term: there is a double top, albeit invalid, pointing to 1,050. The logarithmic equivalent of 1,467 was approached last January. It might be near enough, or we might see the target touched exactly, or passed.

Currency: A valid head and shoulders takes the peso to 43.5. At this point, a new pattern will take the currency to 47.

29th June: The market could fall as low as 1,250 by the end of July. The Peso also is sitting on the edge. A fall that could take it to 46, also possible in the last week of July.

Current Prediction

Short term: 1,550 arithmetic, head and shoulders. Questionable pattern.

Long term: there is a double top, albeit invalid, pointing to 1,050. The logarithmic equivalent of 1,467 was approached last January. It might be near enough, or we might see the target touched exactly, or passed.

22nd  June: If 1,700 holds we could see a rally. If it fails, we should expect at least 1,250.

Current Prediction

Short term: 1,550 arithmetic, head and shoulders. Questionable pattern.

Long term: there is a double top, albeit invalid, pointing to 1,050. The logarithmic equivalent of 1,467 was approached last January. It might be near enough, or we might see the target touched exactly, or passed.

1st June: At last, the inevitable has happened. The PSE has made a valid pattern pointing down to at least 1,850 and possibly lower.

Current Prediction

Short term: 1,850 by reason of  a head and shoulders top.

Long term: there is a double top, albeit invalid, pointing to 1,050. This could happen as late as the end of 1999.

25th May: The PHISIX is fluttering on low volume like a moth around a flame. I still believe it will get burnt.

Current Prediction

Short term: none, but get ready for a head and shoulders top to break.

Long term: none, but falls below 2,100 will bring back the 1,050 demon.

18th May: The index gave back its previous gains on the tiniest of volume. But the neckline for a head and shoulders top still hasn't broken. So we don't have any valid prediction yet.

Current Prediction

Short term: none, but get ready for a head and shoulders top to break.

Long term: none, but falls below 2,100 will bring back the 1,050 demon.

11th May: The index is defying gravity. But I can't imagine that it will stay at its current level for long. Unless volume picks up, I expect the index to follow its regional counterparts down. The currency could also weaken to 4.3.

Current Prediction

Short term: none, but get ready for a head and shoulders top to break.

Long term: none, but falls below 2,100 will bring back the 1,050 demon.

4th May: Now this is not a prediction. It is just a scenario. But the weak volume accompanying the rally in the first quarter suggests that the index is going to fall back to a previous low point - if not the previous low itself. Read on.

Current Prediction

Short term: none, but get ready for a head and shoulders top to break.

Long term: none, but falls below 2,100 will bring back the 1,050 demon.

27th April: Patterns of weakness are forming. The fund has broken out of a head and shoulders top in the short term. But the index has yet to give a clear sign of a plunge

20th April: The index and the fund charts are both making little head and shoulder patterns that portend short term weakness.

11th April: The index is clinging to the short term support by a small margin. Further falls will bring the index back below the 2,000 level. This will reinstate the long term prediction of 1,050. Ominous. Low volume appears to be killing chances of a recovery.

Currency appears to be strengthening.

Current Prediction

Short term: wedge suggests a fall back to 2,000

Long term: none, but falls below 2,100 will bring back the 1,050 demon.

20th March: Volume picked up last week. But I can't see the index getting much higher on this low volume. Check out the medium chart for a key resistance. On the other hand, the currency continues to strengthen, and the fund chart looks promising.

Current Prediction

Short term: wedge suggests a fall back to 2,000

Long term: none

16th March: The index is looking pretty weak. It is facing tough resistance. But the volume necessary to jump the hurdles isn't happening. I suppose people are staying cool till the election is out of the way.

Current Prediction

Short term: wedge suggests a fall back to 2,000

Long term: none

9th March: I can't see this index rising more with volume as low as we have been seeing recently. The resistances are too strong. Also, a wedge looks like the index will fall back to 2,000 in the short term.

Current Prediction

Short term: wedge suggests a fall back to 2,000

Long term: none

2nd March: The index is on the verge of breaking out of a reverse head and shoulders pattern that points to 800. The currency appreciated today. The fund chart also looks good.

Current Prediction

Short term: triangle points to 670

Long term: none, but keep an eye on the long term pattern pointing to 150. This is not valid due to volume patterns. See below.

23rd February: The reversal patterns outlined in previous weeks are building up nicely. A break above 2,250 will give a target of 2,900.

Current Prediction

Short to medium term: none

Long term: double top pointing to 900. Still valid.

16th February: No clear direction this week. We'll have to be patient and see whether we get a reversal pattern or a continuation of the down trend.

Current Prediction

Short to medium term: none

Long term: double top pointing to 900. Still valid.
10th February: The market looks encouraging. We could soon see a pattern pointing to 2,900. The peso is also strengthening. But the long term pattern pointing to 900 is not yet cancelled.

Current Prediction

Short to medium term: reverse head and shoulders pointing to 2,200 - target was reached last week

Long term: double top pointing to 900. Still valid.

31st January: A small reversal pattern points to 2,200. Could be a bit more in the rally. The currency also looks like it's strengthening.

The long term chart shows a breakout from the descending channel. But it's just a pullback to our double top.

Current Prediction

Short to medium term: reverse head and shoulders pointing to 2,200

Long term: double top pointing to 900.

26th January: The weekly chart shows a double top that points to 900, possibly by the end of the year. So don't get excited about a reversal until we see a pattern.

Current Prediction

Short to medium term: none

Long term: double top pointing to 900.

12th January: Target of 1,500, which I made on 25th August last year (see below) was hit last week. But, as I have been warning for several weeks, this does not mean that the bottom is here. Other regional markets are knocking on the door of their 1990 supports. If the PSI does the same, we would be looking at 600. This is not a prediction. But keep it in mind as a possibility. The fund has not reached target yet. And Hong Kong is heading for a melt-down that won't help the PSI.

If the index holds and turns, there could be a rebound this week. But this could be pennant formation, especially after a sharp fall. And a pennant suggests another big fall.

The support at 1,200 is the next stop.

5th January: The market wiggled along sideways last week. But it has hit tough resistance on the medium term chart and is quite likely to spend this week falling.

Current Prediction

Short to medium term: Descending triangle with a target 1,500, slightly lower than that of the long term head and shoulders - 1,550. The triangle could be cancelled if there is a rise this week.

Long term: Head and shoulders pointing to 1,500, with pennant like formation at the current half-way mark. Nothing to suggest this pattern will be cancelled.



1997

29th December: Nothing encouraging.

Current Prediction

Short to medium term: Descending triangle with a target 1,500, slightly lower than that of the long term head and shoulders - 1,550. The triangle could be cancelled if there is a rise this week.

Long term: Head and shoulders pointing to 1,500, with pennant like formation at the current half-way mark. Nothing to suggest this pattern will be cancelled.

13th December: 1,500 is our minimum target. But only the minimum. There's no rule of technical analysis that says "it can't go any lower". Take a look at the long term chart. The 1990 support is at 600.

Current Prediction

Short to medium term: Descending triangle with a target 1,500, slightly lower than that of the long term head and shoulders - 1,550. The triangle could be cancelled if there is a rise this week.

Long term: Head and shoulders pointing to 1,500, with pennant like formation at the current half-way mark. Nothing to suggest this pattern will be cancelled.

8th December: A little double bottom gives hope that the 1,500 triangle prediction might be cancelled. All we need is a little more rallying this week on good volume and the descending triangle gets tossed out. But the dreaded head and shoulders top is not. Check out the medium term chart. It gives an explanation for the current rally that will leave a nasty taste in your mouth. The fund chart does not show any relief in sight.

Current Prediction

Short to medium term: Descending triangle with a target 1,500, slightly lower than that of the long term head and shoulders - 1,550. The triangle could be cancelled if there is a rise this week.

Long term: Head and shoulders pointing to 1,500, with pennant like formation at the current half-way mark. Nothing to suggest this pattern will be cancelled.

27th October: Descending triangle broke last week, confirming head and shoulders target of 1,550. The long term picture might intervene, but even if it does, 1,630 seems likely.

Current Prediction

Short to medium term: Descending triangle target at 1,950 has been met. But a new one is forming, with a target coinciding with that of the long term head and shoulders - 1,550.

Long term: Head and shoulders pointing to 1,550, with pennant like formation at the current half-way mark. But long term support might intervene.

20th October: The triangle that I have been warning about for the past several weeks is still threatening. But the Peso looks encouraging. See the new chart.

Current Prediction

Short to medium term: Descending triangle target at 1,950 has been met. But a new one is forming, with a target coinciding with that of the long term head and shoulders - 1,550.

Long term: Head and shoulders pointing to 1,550, with pennant like formation at the current half-way mark. But long term support might intervene

13th October: The market is resting on good long term support, but there is still the danger of a fall to 1,550. Only a double bottom at the current level would give hope for a change.

Current Prediction

Short to medium term: Descending triangle target at 1,950 has been met. But a new one is forming, with a target coinciding with that of the long term head and shoulders - 1,550.

Long term: Head and shoulders pointing to 1,550, with pennant like formation at the current half-way mark. But long term support might intervene.

22nd September: History does repeat itself. And when a little pattern starts forming, with a target that coincides with that of a big pattern, take note!

The pattern that formed from April to August - a descending triangle - is brewing again. If it forms, the index will likely fall to our target of 1,550.

Current Prediction

Short to medium term: Descending triangle target at 1,950 has been met. But a new one is forming, with a target coinciding with that of the long term head and shoulders - 1,550.

Long term: Head and shoulders pointing to 1,550, with pennant like formation at the current half-way mark. But long term support might intervene.

8th September: The index has reversed after completing the minimum for the triangle (1,950). It has yet to do the minimum for the head and shoulders, 1,550. But long term support has intervened and might prevent the index reaching the lower target.

Current Prediction

Short to medium term: Descending triangle target at 1,950 has been met. No major resistance before 2,500.

Long term: Head and shoulders pointing to 1,550, with pennant like formation at the current half-way mark. But long term support might intervene.

1st September: A rebound this week might stall further falls, but the weekly chart looks as though it will test 1,940 and there is then no good support until 1,550.

Current Prediction

Short to medium term: Descending triangle target at 1,950 has been met.

Long term: Head and shoulders pointing to 1,550.

25th August: Last week the index fell sufficiently to confirm our prediction of a head and shoulders with target of 1,550. The fund chart and the break in the long term support add weight to this argument. The long term support may still save the day, albeit on a new trajectory.

Note that the target of 2,350 for the head and shoulders top that I warned of in May was met last week.

18th August: A further 20% is likely to be shaved off the index as a nasty descending triangle has broken on the daily chart and the long term support, shown on the weekly chart, appears to have failed. There is a possible salvation at 2,350 on the weekly chart. This would correspond with the previous target shown by the green arrow.

Current Prediction

Short to medium term: Head and shoulders top pointing to 2,350 (green arrow). A descending triangle (pink) points to 1,950.

Long term: If the above predictions are met, the index will have broken through a downward sloping head and shoulders top that points to 1,500.

11th August: The index is still giving mixed signals. On one hand, if the index follows the path shown by our chart below, it will hit 1,900 (as the head and shoulders top will break the neckline of a descending triangle). On the other hand, the long term support is still holding and might intervene to curtail further falls.

4th August: A bit of consolidation last week shed no light on the fate of this market. The long term picture, shown by the weekly chart, is decisive. The index is holding on the support. A turn up would be evidence for the start of a new bull market.

Current Prediction: Short term, we could see a fall to 2,350. Long term, we could be at a good long term low. More time needed.

28th July: The index has made a little symmetrical triangle that points to the same target as that of our head and shoulders top: 2,350. On the other hand, the long term chart looks pretty cozy at its current level.

I would not be surprised by a weak opening of the market, followed by a recovery, towards the end of the week, closing at current levels. (But this is speculative and procrustean - better wait and see.)

20th July: The long term picture gives the best possible hint at the direction of this market. See below.

Current Prediction: none. Possible double bottom if the index breaks 2,900 on strong volume. But it could be a head and shoulders if it breaks 2,400.

14th July: A double bottom possibly, if the index breaks 2,900. Note the low volume and the fact that the fund didn't reflect the 7% gain on Friday, boding greater weakness than one might think.

Current Prediction: none. Possible double bottom if the index breaks 2,900 on strong volume. But it could be a head and shoulders if it breaks 2,400.

8th July: Nothing much to report. Average volume is keeping up, adding fuel to the possible reverse head and shoulders scenario.

Current Prediction: A reverse head and shoulders with target at 3,100, but with dubious volume on the right shoulder and resistance on the neckline of the previous head and shoulders that didn't work. A low probability prediction.

29th June: Possible reverse head and shoulders brewing with a target of 3,350. But how can we trust it if the head and shoulders top didn't achieve its minimum? See the alternative fund analysis below.

Current Prediction: A reverse head and shoulders with target at 3,100, but with dubious volume on the right shoulder and resistance on the neckline of the previous head and shoulders that didn't work. A low probability prediction.

23rd June: Well I'm surprised by that. The index has pulled back exactly to the neckline of our head and shoulders top. But because it has moved more than fifty percent of the distance to 2,350, the prediction is cancelled. We now have a reverse head and shoulders, sloping up, pink neckline, pointing to the next resistance point of 3,100. Breakout volume is good. But volume throughout the formation isn't. So I don't trust it. Let's see if the green channel holds this week.

Stop press: 23rd June, the index fell out of the green channel. closing at 2,808

The fund chart, on the other hand, has not pulled back to the neckline of its pattern and is therefore still valid. Compare it below. It could suggest that the current move upward is short lived.

Current Prediction: A reverse head and shoulders with target at 3,100, but with dubious volume on the right shoulder and resistance on the neckline of the previous head and shoulders that didn't work. A low probability prediction.

16th June: The index touched a one year resistance last week. Modest rises and continuing low volume do not portend a reversal.

9th June: The index has turned on resistance shown by the green descending channel and the blue descending channel. Nothing much going on. The only possibility of further rises would be if the current falls are a pennant. Low volume during the sharp rises suggest, however, that the recovery will be short-lived.

2nd June: The index rose unexpectedly last week. (Patient bottom fishers would have been rewarded.) The long term support may give a clue as to the reason for the retracement. However, the rises occurred on low volume and the minimum for our valid head and shoulders hasn't been satisfied. The target of 2,370 is still valid and highly probable.

26th May: A bit of a rebound last week, but nothing to get excited about. All targets point down, unless the supports in the long term charts hold.

12th May: Danger of a bottom-burner here. Nice profit in the first three days of the rebound has now probably all been wiped out. The index is still contained in the channel. If it falls through the support shown by the broken blue line we will have a flag pointing to 2,300. Dangerous market. The weekly chart looks promising. It has turned on a nice support. But there could also be a flag forming, supporting the prediction of further falls.

5th May: How many of you took the plunge and bought into this market last Friday? What a perfect fall. The pennant target was met exactly on Friday, coinciding exactly with our long term support. Such a huge fall to a technically solid support deserves a little bottom fishing. Expect a good rebound. But let's not assume a reversal until we see it. Note that the fund chart still points down. And I have drawn another possible head and shoulders with a target of 2,300, of which the expected rebound could be a merely pullback. If that be so, the rebound may last only up to 2,900 (the black horizontal line). Beware a turn as the index approaches the blue broken descending line.

28th April: Can it make it? The weekly chart shows the index having fallen below two supports. There is only one support left, shown on the long term chart in green. However, the fund chart points to a possible long term fall.

23rd April: A pennant that will take index down to 2,630.

8th April: No doubt about what's going on here. The red dot is today's close.

28th March: A nice place to turn: the index has been turning slowly along what could be a six month support. The head and shoulders with black neckline and measuring arrow might not happen, due to the volume patterns. But I think that the target will be met and the index will fall to, at least, around 3,140 before turning. But this is speculative. Signs are not clear.

17th March: This trickling business could carry on to the neckline (extend the blue line to meet the channel) at 3,100.

10th March: This market has gone to sleep inside a falling wedge (pink lines). Falling volume supports the falling wedge theory, which says that the confines of the lines confines the fall, after which we may expect to see prices rise out gently and without much fuss. Back to sleep.

3rd March: No news to speak of. Support in the channel. Yawn.

14th February: Panic not! We're allowed a bit of a pullback. 3,600 is still on the cards. The fund chart below might give some indication of the direction of the index.

10th February: A gentle pullback within the safe confines of an ascending channel. Volume also dissipated last week. But nothing to get excited about. Target is still 3,600.

3rd February: Last week saw a nice increase in volume that will assist the index in meeting its target of 3,600. It's still not as convincing as I would like to see. Six or eight billion pesos per day would be more encouraging.

27th January: A possible reverse head and shoulders pattern, shown below, points to our previously predicted target of 3,600. The problem is, however, that the pattern does not have the requisite volume on the right side of the head. Nor is volume convincing on the breakout from the blue neckline. However, the volume on the right shoulder is heavier than on the left shoulder, in conformity with theory.

We need a strong pickup in volume, to make this prediction valid.

29th January: Nothing very exciting happened last week. We are still encountering resistance at the 3,300 mark.

13th January: So close to the apex, our rising wedge fizzled out. The index ended last week resting under the six month resistance level. Let's wait and see what happens this week.

4th January: All quiet on the eastern front. Our wedge is getting pretty close to the apex. According to theory, the closer it gets, the less likely it is to work.



1996

23rd December: Nice gains last week, but we're still in a rising wedge, which means a fall coming. See the fund, above, for a rosy picture.

16th December: The Index is making a rising wedge, shown by the pink lines. This pattern suggests a sharp fall in the near term.

10th December: The long term picture still looks positive. See the chart below and the double bottom formation which shows a minimum of 3,600.

25th November: Not much going on here.

18th November: The chart below shows the prices at 15th. However, today, the 18th, the market broke out of the channel. A good sign. Our long term objective for the index is still 3700.

9th November: The PSE rose nicely over the past two weeks, turning a second time on the critical long term support around the 2900 mark (actually lower this time). The fund chart, however, shows a mere pullback to the neckline of the triangle and the possibility of a new right shoulder forming on the black neckline. A fall below this neckline would take the fund, and the index correspondingly, down about thirty per cent.

28th October: The market fell below a key support of 2910 today. This support is shown by the broken line in the index chart. This support is the neckline of a two year double bottom formation. Very surprising that it broke. The double bottom has nice volume formations and should have worked.


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