24 October 2011

PSEi 4,201.08. +34.48 points. +0.83%.

IP continued its decline, dropping steeply by 36.59%, from 3.17 Pesos last Friday to just 2.01 today. The buy-on-rumor-sell-on-news play seems to be over for now. IP peaked at 3.87 last week.

The investing world has been most bullish lately. Even perennial bears should consider the possibility, however unlikely, that Europe may have gotten its act together. There is also another scenario that must be considered. The markets may simply be so irrationally strong right now, it will ignore whatever news comes out of Europe and just keep going up.

A trading stance to be considered, for the truly chicken-hearted, is to go 50/50 stocks and cash. This would mitigate the effects of any sudden spike or crash in the wake of Wednesday’s follow-up EU meeting. Something to consider carefully.

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