In my previous entry, I mentioned that the PSEi was forming a higher-low, which was a bullish signal. The index continued to form another higher-low on the way to form an ascending triangle pattern, which is also a bullish pattern. Unfortunately, poor economic data abroard, China's slow down, European debt issues and global equities sell-off weigh down our market as well, making the ascending triangle pattern invalid (breakdown of the thick red line). :( However, we're nearing the blue uptrend support line. Could we possibly form another ascending triangle albeit with a lesser uptrend gradient (blue thick line)? I would really hope so.
Possible scenarios on what might transpire to our market in the next few weeks are in orange, turquoise and light green lines. My personal take is the turquoise line, although what worries me is the bearishness of the US markets. The Dow and S&P are showing head and shoulders breakdown pattern. But if many people are seeing the same pattern as I do, many would be in the sidelines rather than in the market. So who would sell down the market anymore? Could this negate the head and shoulders breakdown pattern? I hope it would.
Disclaimer: This blog contains the opinions of the author, and do not constitute a recommendation to buy or sell any security indicated therein. Buy or sell at your own discretion and risk. The author does not warrant or guarantee anyone who would follow his trading. Information in this blog may only be accurate at the time of posting and not on any future time.