2016 in the beginning was a centralbank-driven market until November 9th than followed by a politics-driven market. 2017 in my opinion could start as a politics-driven market affected by right wing populism and end later this year by a central-bank driven market. Traders need to deal with facts and figures. To survive in 2017 means to follow strictly about what might affect the stockmarkets and to put the own political opinion on the side - anytime.
The PSEi is showing us how this works - in extreme.
You can see a pre-election rally until August 2016, even most of the details (!) about Rodrigo Duterte are known before as he got eleceted. He is also still backed by the majoritiy of Philippine people. He is well known as "Trump light".
Even Investors all this might have known before they ignored the facts and bought into this rally until the first days in August 2016. In a public speech on August 6th. Rodrigo Duterte threatens journalists and members of opposition parties to get killed. This was the day international investors could not ignore longer that politics might affect their investments and start pulling out money from the Philippine Stockmarkets. On August 8 2016 i put a "Sell" on PSEi but at this time i was not a member here on tradingview.com
The PSEi might be a bellwether what can happen to a stockmarket if populism get´s out of control.
But make no mistake: If ever there are signs, that there might be any kind of impeachment for Rodrigo Duterte or that he might be forced to resign this stockmarket will go up 10-20% in some days only or maybe in one day only.
The fundamentals for the overall country are still strong. If Investors are forced to pull out money than this will have other reasons than economy and this is a conflict of interests. And excately this will happen to any investor in stockmarkets all over 2017 - in my opinion.
Back to the "Bellwether" issue:
I does´nt matter if you like Donald Trump or not. He is setting the tone and taking the lead at least in the first 100 days after inauguration on Feb. 20th. Additionally Trump is using twitter that means you might have only seconds to make any decission about sell or buy. Only thinking: "I like what he said" or "I can´t hear this anymore" might cost you a lot of your own money if ever you have a long or short position active. To survive 2017 mean to ignore the own political opinion strictly and to focus on how the market will think about what Donald Trump is saying. I doesn´t matter if i like what he says or not.
The PSEi as a bellwether is showing that a stockmarket is going up in the pre-election presidential campaing and in the first weeks after "inauguration" ---> also.