• Jet Mojica

Stock Market: A Roadmap for PH Equities

Updated: Mar 30, 2018

What if I tell you that prices in the stock market are not as random as “experts” would like you to believe? That while we say “anything can happen” in the stock market, we actually do know where prices are headed to weeks or even months ahead of time. That we have little voices in our heads that whisper us scripts and reference lines that help us walk you through trades. Would you take us seriously? Wehhh, right

The good news is that we don’t have little voices in our heads. Instead, We rely on friends for help in divining roadmaps for our market.

At BOH Society, we always turn to our resident NeoWave expert Jojo Gaston for big picture advice in the stock market. You see, we called the top at 8116 and have walked our members through the distributive range in August. The market is down -6.6% from 8116, and we’re now trading at the midpoint of our trading range. We know that if the PCOMP Index breaks below 7845 we are going to get an even steeper leg down. So it begs the question: where to next?

Well, Jojo Gaston believes we are inside a very wide range and transitioning into a triangle. The potential triangle has formed symmetrical legs and there’s very little reason to think it’ll be any different for the ongoing pullback. Assuming we break below 7485 definitively, Jojo Gaston’s baseline view is that the correction will end somewhere 7093 so you should expect another -6.4% downside from last Friday’s close. At 7093, our stock market would have corrected -12.6% from the 8116 all-time bubble high! That’s nothing, right?

The bad news is that correcting to 7093 makes the market an automatic sell-rally. And assuming we’re correct and the market gets back above 7259 after holding support at 7093, the most we can go up to is 7564 and 7715 only. In short, it gives us another lower high. Everyone at BOH Society knows that it’s the lower high that kills!

To cut the long story short, we are reiterating our bullish view on the stock market but that for the bullish outlook to materialize, we’ll probably need to break below 6954 and test support near 6795 by February 2017. Right now, we’re on wC of Wave 4. After that we’ll get wD of Wave 4 by March or April. One last brief dip near 7403 area for wE of Wave 4, and we should be ready for a bullish Wave 5 breakout for Philippine stocks!

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