Morning Dew - 30 July 2013

Key Points

• JCI crashed below its support at 4582/4591 and this suggests that the current wave ii of c will go deeper than initially expected. Next key support lies at 4492-4495. This should hold or risk a major test of 4403 reversal point. Not looking good on the indicators point of view as the price has fallen back below its EMA band as well as its MACD is heading fast below the zero line. Diminishing volume however, indicates a potential rebound but the key upside is still the 4779 (recent high).
• The Dow fell as the index of pending home sales fell 0.4%, below the forecast in June. The market is basically still trying to gauge the risk of the reduction of stimulus by the Fed next September. The key data will be due next Friday when the nonfarm payrolls are scheduled for release. Payrolls are seen up 185k in July after a 195k increase in June. Meanwhile, unemployment rate is seen to have ticked down from 7.6% to 7.5%.
• JCI is seen fluctuating with declining volume as the domestic market heads towards a one-week holiday next week. Reactions to payrolls may not be significant this time as it will be delayed until a week afterwards. For now, technically we are seeing another potential dip towards  4492-4495.

Click here to download the full update (PDF)