Some market participants frown on Tsupiteros or short-term traders. What some or most of you might not realize, short-term traders are actually quite important in the market. Suppose a stock is going up. There comes a time when buying interest fades. If everybody was a position trader, the price will eventually move sideways because demand will eventually decline and no one will be left to buy the stock. In real life, however, not everyone holds onto a stock for long periods. There are actually those who sell the stock the minute they earn a profit, no matter how small. These tsupiteros are underappreciated, in my opinion. See, tsupiteros are actually the ones who feed the price to go higher. When they sell early, they are also the ones who buy back higher, thereby feeding the uptrend. In other cases, they are also those who re-enter the market after a significant or maybe, not so significant price decline. They represent interest after a period of disinterest or a correction phase.
Let’s use current market conditions as an example. The PSEi has been going up since December 29, 2011. We corrected for a day last January 6 then our market continued further up. The reason why the index was able to go up this much is because funds transferred from one sector to another. Banks first led the rally, property followed then just when we thought the index is exhausted, funds bought big caps like TEL, GLO, and SM, thereby pushing the index further to current levels. Notice though, that although some stocks are still pushing higher, buying interest has declined. Buyers are no longer as aggressive as before. The index corrected today by 34 points. So the question now is, when will short-term traders re-enter the market?