Another memorable June in the offing

We wrote here to watch out for the GDP announcement on Thursday. If we were asked to bet then (early in the week), we would have placed money that the GDP increase will be between 6.5-7, but the report was below 6 instead. The damage of Haiyan is still being felt.

And so the result of the less-than-desired report: intermediate moving average of the index was breached (see the purple and orange line crossing on the 2nd graph).

I really chose to go out of an office meeting around 11am, went back to my cube quickly, opened interaksyon.com, saw the not-so-good NEDA report, opened the brokerage, and immediately saw red nearing 1%. Without emotions, I unloaded many positions until my main port is 60% cash, and nimble port to 75%. We also 100%-redeemed all our equity-based UITF's (all of them green). Then, I went back to the the meeting. Friday, I didnt have time to trade or even open brokerage account for a minute, but I know that it was very probable that we're red also that day. If we have shorting in PSE, I would have done day trading and shorted the previous high-flyers for sure.

Today, I was surprised to see the 16B volume and the persistent foreign buying of their respective pet stocks on Friday. Looks like the foreigners are remaining steadfast to each of their pets. This brought optimism in many locals. Will the foreigners impede a general bearish trend?

In any case, down or continue upwards, we are in to another memorable June. Our short-term reco though is not to fight it. The safest move is to maintain a robust cash position. Remain only in a few issues you truly believe in.

Im still holding a significant amount of SECB, some MBT, some LRI, other old (long-held) holdings, and other dividend payers. I still hold and intend to accumulate BEL with the impending opening of the City of Dreams casino. Also, a one tranche in BPI became two when a low-priced buy position (previously set) was surprisingly hit last Friday.

In the end, if we go down, we think this is just temporary. If NEDA is pointing to Haiyan as the culprit, that can be solved. If we manage the aids well, as they did in the tsunami hit places of a decade ago, even the Haiyan-hit areas should go back stronger. I will start to buy again at 6500 probably and continue to go buy even if we go back to 5500.

But if there is an impending BSP policy rate increase, that will be another matter. The ride down will be deeper and more painful if policy rates increase. It's time to add to bonds-UITF if that's the case.