On July 16 I wrote: “For now, ‘Buy the PSE [Philippine Stock Exchange]. Buy the Philippines. It figures that would be the top on the Philippine Stock Exchange index (PSEi) at the 8,000 level. The PSEi had an increase of 14 percent since the presidential election, and I suppose it was appropriate that I would be on the wrong side at that 8,000 area.

But nonetheless, I also said the price rally really had little to do with the election of President Duterte and did have all to do with the fact that the election itself was valid and undisputed at the presidential level. The problem—if you can call it that—is that the PSEi 8,000 was a killer back in 2015.

I make absolutely no excuses for calling the market wrong. In fact, I assume that my predictions are always going to be wrong. That is because the key to the deal in the stock market is not making money but not losing money. Remember Warren Buffet’s No. 1 rule: “Never lose money.” If not losing money was so easy, why would Buffett make it his primary goal?

But here’s the thing about the stock market since that top at the PSEi 8,100 level. The market is down only about 5 percent and that is certainly not a big deal. But what is amazing is the incredible price

volatility of individual issues in July and August. The price movements we have seen are unprecedented in the last 10 years.

There have been much larger moves both up and down with the stock indexes during several six- to eight-week periods. But it is the price changes of individual issues combined with heavy trading volume that is different. Often we expect to see large price moves when there is little volume, as thin trading lends itself to wild swings. But this is not the case.

International Container Terminals Inc. was 4 percent higher in July and then rose 31 percent in August. On the other hand, for August, Metro Bank, Globe Telecom and DMCI Holdings Inc. were all down about 12 percent. Manila Water Co., Inc. was up 7.6 percent in July and then down 7.7 percent in August.

When nearly half of the PSEi 30 issues move by 3 percent or more, going either way in a one-week period, those are huge moves. Further, because it is both higher and lower, the PSEi itself is barely changed by 0.32 percent.

According to some experts, it is because the “honeymoon” period of Mr. Duterte’s presidency is over. Maybe so. But perhaps, it is something else.

Prices must stop going down before they can go higher, which is actually part of that Buffett “never lose” rule. In other words, there has to be market selling capitulation. But during the last six weeks, every time prices seemed like they wanted to fall to a selling climax level, an unseen hand pushed them back up. But unseen hands never last for long. We will have that selling climax. It is only a matter of from what level will it occur. Then we will go higher, so for now, maybe better not to buy the PSE. And I’ll probably be wrong on that, too.

E-mail me at [email protected] Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.