Morning Dew - 10 July 2013

Key Points

• JCI finished lower again as selling continued on Tuesday. The index approached the crucial support at 4373 as it ended at 4403.80 with foreigners continued to pull out. Combination of negative catalysts have been putting great pressure on domestic stocks recently, ranging from the Federal Reserve monetary policy to domestic monetary as well as fiscal policies. China has been another wildcard as fear of slowdown in the mainland spooks investors.
• Technically speaking, JCI continues to unfold its wave b of B. This complex wave could end anywhere. It can just end at today's low at 4403.80, or it can be around 4373, or even below 4373 should an irregular structure occurs.Upside, resistance come at 4647, followed by 4819. We need to see the index pops back above the latter to confirm that wave c of B is unfolding. Positive Dow overnight hinted a rebound is to commence on Wednesday.
• U.S. monetary policy returns to the central stage this week as the minutes of the fateful FOMC meeting is set for release this midweek while at the same time Fed's boss Ben Bernanke will deliver his speech. On another front, the earnings season is set to start on Tuesday with Alcoa commences with the kickoff. Both macro and corporate factors will run simultaneously this time around.
• Just four recommendations remain on the list, and only BBCA held ground on Tuesday's session. BBRI stayed under pressure, TELE was having a near-death experience and IMAS continued to move back-and-forth between gains and losses. No new recommendations for now as we are still awaiting hints that the current wave b is completed.

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