Morning Dew - August 30th 2013

Key Points

• JCI gained for the second day in a row, reaching as high as 4103 and settled there until the session ended. The upside for now is capped by 4107, but somehow is set to be tested on Friday. Beyond 4103 we will see 4261 and 4373 to become the index's strong resistance. Alternatively, on the downside the low at 4026 is now the nearest support for the index while 3837 being the key support. Improving technical tools suggests that we may see another green day this Friday. Below 3837 we still have 3400 and 3698
• US stocks gained slightly after economic data released on Thursday showed that GDP climbed 2.5% (annualized), beating the consensus of 2.2% increase as well as initial reading of 1.7%. Meanwhile, jobless claims fell 6k further to 331k from 337k. Consensus had expected claims to have fallen to 332k. Elsewhere, the prospect of US' Syrian military intervention dropped after both UK and France opted to wait for UN investigation over the matter. There is no change in view that the Fed will start to reduce its stimulus in mid-September. On the domestic front however, BI rate has been raised to 7% from 6.5%.
• JPFA and PTPP have joined the pool of recommended stocks after both saw sudden decline and recovery on Thursday. PGAS and JPFA now in the neutral side while ARNA and MDLN stay in the red. PTPP is the only one gaining with 6.32% increase. For Friday, we are more likely to get some fluctuations among JCI stocks as the Dow's finish overnight had failed to impress.

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Morning Dew - 29 August 2013

Key Points

• JCI opened the Wednesday session on a very weak footing as it collapsed to hit the intraday low of 3837 before the index rallied sharply higher to touch 4033 before settling at 4026. The index has met the wave equality target at 3940 and this means the next Fibo projection target lies at 3400 (1.618x) while based on the Fibo retracement calculation, the 76.4% retracement level of the rise from 3217 is at 3698. In addition, we also have a prior low at 3635 as another support for JCI. Upside is seen well capped at 4373 and the nearest resistance comes in at 4062. More hurdles for the bulls are spotted at 4107 and 4261.
• US stocks edged slightly higher after a 170 points decline on Tuesday. So far, the rise is considered as corrective as the risk of getting another downside pressure remains. Rising tension in the Middle East coupled with the risk of Fed's stimulus easing are seen as negative catalysts for stocks right now. Energy stocks seen benefiting from the rising oil, but the spike in oil prices is seen brief. A military action on Syria by the US is seen swift and thus the negative spillover from the event should be manageable and brief.
• After a prolonged struggle, IMAS finally removed from the reco list after it was squeezed beneath its stop, losing 8.88% from its entry point at 5350. The exit left ARNA, MDLN and PGAS as the only ones surviving the storm right now.Rebounding Dow is seen positive for Thursday's session, but follow up rally may be limited. JCI needs to return above 4261 to convince us that what we saw on Wednesday was not a dead cat bounce. We also add JPFA and PTPP into the lineup. See the table for the details.

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Morning Dew - 28 August 2013

Key Points

• As expected, the index fell to the support line around 4k and even fell further to as low as 3954 before ending the day at 3967. This fall nearly meet the wave equality target at 3940 and smashed through the 61.8% Fibonacci support at 3995. The next technical support comes at 3940 and should the index squeezed further, we will risk a fall towards the 76.4% retracement level at 3698, just above the prior key low at 3635.28. More supports come at the 1.618x projection level at 3397.80 and the starting point of the uptrend at 3217.95.
• US stocks tumbled as Mid-East tension flares up. Crude oil jumped to $109.01/barrel, taking along the gold price to $1,420.2/oz. DJIA fell 170 points or 1.14% while the S&P 500 retreated 1.59% to 1630.48 as the odds of US intervention on Syria is seen increasing after Obama delivered a statement regarding usage of chemical weapons in Syria.
• Tuesday's decline pushed ULTJ out of the recommendations pool as it fell below its risk at 3375. This leaves the remaining recommendations to just four. None is added for now, and the steep fall of the Dow seems to set the path for JCI this Wednesday straight to the gutter as it poised to test the next support at 3940... and could be even lower. Upside, resistance comes at 4062 and subsequently 4261.

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Morning Dew - 27 August 2013

Key Points

• JCI started off the weak on a weaker note as the market awaits the Fed's next FOMC meeting on September 17-18 when the central bank is seen starting its stimulus reduction. Support at 4000-4016 still holding at the moment but is poised to be tested on Tuesday while on the upside the resistance at 4373 looks strong enough to dampen any recovery attempts.
• US stocks ended down on Monday as Fed jitters took the market hostage as well as the Fed meeting looms large. In addition, durable goods orders fell 7.3% in July, reversing a 3.9% gain in a month earlier. Despite the data is weak, the market seems ready to face the tapering of stimulus next month. It's no longer about IF the stimulus going to be reduced but rather, it's about how much the reduction will be.
• Out of five stocks recommended only PGAS stays in the green while IMAS, ARNA, MDLN, and ULTJ fell below their respective entry prices. There is no change on the recommendations while we still refrain from adding more stocks into the pool. Tuesday is seen as another potential decliner as US stocks faltered overnight. Upside is seen limited for now.

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Morning Dew - 26 August 2013

Key Points

• Growing concerns over the prospect of Fed's reduction of stimulus dealt a critical blow to the JCI last week. The index fell to as low as 4062 before it settled the week at 4169. Prior support at 4373 now acts as a stiff resistance to beat while on the downside, after the 4062 prior low, other support lines are 4000-4016 area which if, also yield to the selling pressure could see more selloff.
• Economic data in the coming week will feature the durables orders for July, 2Q13 GDP, Chicago PMI for August and the final reading of University of Michigan confidence index. While none of these are critical to create direction for the market, the sentiment is more likely to tilt to the negative side as the FOMC meeting getting closer. Jackson Hole meeting of central bankers yield a differing views on the Fed's plan to reduce its stimulus, but the assumption remains that the Fed will start reducing its stimulus program next September.
• Five stocks remain on the recommendations list, with PGAS being the only one in the green. While the outlook of JCI remains cloudy, the rise of Dow last Friday may provide a brake on the recent slide. Near-term resistance comes at 4305-4306 and afterwards, the key 4373 resistance line.

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Morning Dew - 23 August 2013

Key Points

• Another day, another slide as the FOMC minutes released on Wednesday bolstered the odds that the Fed will start reducing its stimulus sooner rather than later. JCI reached its intraday low at 4107.65 and despite it managed to erase some of its losses, the outlook remains gloomy as we are staring at the subsequent key support area around 4k and 4016. Upside is expected to remain capped at 4373 for now.
• US data provided support for US stocks as jobless claims fell to 330,500 during the week ended August 17th. A week earlier it read 336k. Improving employment situation is seen contributing to raising the odds for Fed stimulus reduction next September. The Dow ended up 0.44% while the S&P 500 climbed 0.86% and NASDAQ gained 1.08%. As European stocks also gained, the JCI is expected move higher during Friday's session. Still, the overall outlook remains precarious as we are moving closer to the next FOMC meeting in mid-September.
• WSKT, ACES and ASRI are removed from the recommendations list as all three hit their respective stop loss levels. ULTJ entered the list as its entry price is filled. By the end of the day, five stocks are active with IMAS and PGAS on the green while ARNA, MDLN, and ULTJ are underwater.

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Morning Dew - 22 August 2013

Key Points

• JCI rebounded on Wednesday after setting its intraday low at 4150.24. The index bounced to as high as 4261.44 but eventually settled the day at 4218.45. No change in view that the index will remain vulnerable as Fed tapering looms large. The upside is seen well capped at 4373 for now while the downside is seeing its next support at 4016 and 4000 afterwards. FOMC minutes released last night points at another potential slide on Thursday's session.
• FOMC minutes from the Fed's July meeting showed that the board members were supporting the plan for cutting stimulus this year on the condition that the economy improves. Currently, the board members are expecting the economy to improve in the second half 2013 and to strenghten further. Despite some fluctuation in the job data recently, it is expected that the Fed will make its move next September.
• ARNA, MDLN, and PGAS have met their entry prices while ULTJ remains unfilled for now. Currently, only IMAS in the green, while the rest of the recommendations are still in the red. No change on the recommendations at the moment.

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Morning Dew - 21 August 2013

Key Points

• JCI remains under pressure on Tuesday as the index sliced through several layers of support line and hit the low of the day at 4062.30. As we lost 4252, the next Fibo support comes at 4016, just above the key psychological level of 4k. While the outlook stays grim, the bounce just before the market closed suggests that the selling pressure has slowed and we may actually see the key 4k level holding up pretty well on Wednesday. Upside, the prior support-turned-resistance at 4373 is still seen to cap any recovery attempts.
• BBRI fell off the recommendation list after the stock plummeted to hit the low at 6550, taking out the stop level below 6800 easily. Now, only four stocks are on the list and three are in the red while IMAS has been hovering around the breakeven level at the moment. Meanwhile, WSKT and ACES are struggling to dodge being crushed below the stop level. Four stocks are added to the list: ARNA, MDLN, PGAS and ULTJ.
• US stocks ended up mixed as the Dow fell a bit while the S&P 500 index edged higher. The market will wait for the FOMC minutes to be released today to judge whether the Fed is geared up for a stimulus reduction next month. It is however, likely to start reducing the stimulus amount, but at gradual pace. JCI outlook is to stay vulnerable on Wednesday but with a decent chance of a bounce.

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Morning Dew - August 20th 2013

Key Points

• The dramatic fall of JCI slammed the index below its key support at 4373, taking it to as low as 4310 before it settled at 4313.52. This has shifted the direction back to the downside with near-term support coming at 4275 (0.618x wave projection), followed by 4252, the 61.8% retracement of the rise from 3635 to 5251, which is within the proximity of previous resistance-now-turned-support 4232-4234. Upside, the prior support-now-turned-resistance at 4373 is seen capping recovery attempts.
• Worsening USDIDR exchange rate coupled with concerns over the Fed action at the upcoming FOMC meeting are seen as the catalysts behind the slump. Still, this is seen as overdone and at least a technical rebound is expected to occur next. However, until the Fed's fog is cleared, JCI is expected to stay vulnerable.
• Lack of catalysts sent the US stocks fluctuating in a limited range. The US Federal Reserve is scheduled to release its minutes of the last meeting on 21st while the Jackson Hole meeting of central bankers and policy makers are to be held from August 22nd to 24th. On September 17-18 meeting, the FOMC will determine whether the stimulus will be curbed or not.

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Morning Dew - August 19th 2013

Key Points

• JCI fell throughout the week alongside most of other global stock indexes as the market ponders at the possibility of the Fed to start reducing its monetary stimulus as soon as September. The Dow suffered more than 2% decline throughout the week. Technically speaking, the key resistance for the JCI next week will be the recent peak at 4699, followed by 4710-4720 (EMA resistance) as well as 4779, the next key resistance. Support will come at 4563, 4546, and 4403. 
• Friday saw the releases of several US data, and as it turned out, confidence level fell in August to 80 from 85.1, way below the consensus of 85.2. Meanwhile, US housing starts and building permits were also reportedly came in below expectations despite showing turnaround from June's reading. Non-farm productivity, on the other hand, showed a better-than-expected reading in 2Q13.
• For detailed technical outlook, please refer to the other pdf file linked to this post.

Click here to download the full update (PDF)
Click here to download the technical update (PDF)

Morning Dew - August 16th 2013

Key Points

• There is no change in view that the JCI is seen capped at the EMA resistance around 4710-4720, but the downside is vulnerable as the weak Dow is supporting the negative outlook scenario so far. We are likely to resume its downward push towards 4563 key support or even extend the slide towards 4546.
• CPI data showed that inflation has slowed a bit from 0.5% to 0.2% gains in July, matching the consensus. Excluding food and energy, the CPI rose 0.2% in July. The biggest jolt to the market last night was the jobless claims which fell 15k to 320k for the week ending August 10th. It was the lowest reading since October 2007, beating the consensus of claims level at 335k. The better-than-expected claims is seen supporting the scenario of Fed tapering of stimulus in September when the FOMC meets on September 17-18. 

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Morning Dew - August 15th 2013

Key Points

• There is no change in view that the JCI is seen capped at the EMA resistance around 4710-4720 while the downside is seen supported by 4658 (previous resistance turned support) and 4563. Below the latter will mean the second wave of c is still in force. Weak Dow is supporting the negative outlook scenario so far, so watch the downside cautiously.
• US Producer Price Index signals timid inflation on the production stage in July while at the consumption stage we will have the data tonight. Other data set for release today are jobless claims, industrial production and Philadelphia Fed index. No big surprises are expected as the market will stay focusing on the next Fed meeting in September. As we nears the meeting date, anxiety over the possibility of a reduction of stimulus will haunt the investors and keep the upside potential limited for now.
• European economy finally sees a light at the end of the tunnel as GDP data released on Wednesday showed economy was growing during the second quarter. All three data coming from Eurozone, Germany and France told the same story, but whether this will be consistent or not is remain to be seen.

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Morning Dew - 14 August 2013

Key Points

• JCI ended higher on Tuesday, but still came short on cracking the first line of resistance at 4658. If the index manages to clear it up, then a follow-up rise can bring another crucial level at 4779 for a test. Only above 4779 could confirm that wave iii of c is in progress. Key support remains at 4563 at the moment.
• US retail sales data released overnight saw a slowing down in pace from a 0.6% gains in June to just 0.2% gains in July. The reading was below the consensus number which called for a 0.3% rise. The slowdown however, was seen as supportive for the Federal Reserve to maintain its current amount of stimulus.
• Wednesday will see the release of US Producer Price Index (PPI) data for July, yet timid inflation at the production level is seen neutral. In addition, PPI data has been less significant in influencing the market sentimen in recent years, unlike the more watched Consumer Price Index (CPI) which will be released tomorrow.
• Positive Dow is seen supportive for Wednesday's JCI's outlook. While mining stocks continue to shine, agriculture sector slumped. China's data are seen as positive catalysts but keep in mind that Chinese data tends to fluctuate rapidly sometimes. On the other hand, FOMC meeting in September is coming and it will hold the market hostage as the event nears. For now, stay cautiously positive as JCI is seen up towards its next hurdle at 4710-4720 en route to 4779.

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Morning Dew - August 13th 2013

Key Points

• Despite the shiny mining sector throughout the day, the JCI slumped instead. The u-turn on the daily chart suggests that the wave ii may not be over just yet and that the index may fall below 4563 towards 4546 to as low as 4491 (as mentioned during the last update). Tuesday will see the significance of 4563 crucial support while the resistance will remain at 4658, the pivotal level just before the long-holiday week. Only above 4658 will revive the wave iii scenario.
• China data set up the rally of mining commodities as last week's data showed exports rising 5.1% in July (yoy) way above 2% expected by the market. Imports ballooned to rise 10.9%, surpassing the 1% rise expected. Industrial production was also robust in July as it rose 9.7%, above the expected 8.9% advance. Retail sales slowed a bit to 13.2% in July against the 13.5% expected, but still the reading was strong enough to support the market sentiment. The rise in local mining stocks still warrant some caution as we need to see improving metal prices before declaring that the worst is over.
• US stocks gyrated between gains and losses on Monday as lack of catalysts dampened interests. Slowing Japan's growth weighed as well as the looming Fed meeting next September, but rosy update on China's economy last week somewhat added some optimism. Tuesday is seen not far too different from Monday, but the JCI is expected to see limited decline if there's any to complete the second leg of wave c of B, either at 4546 or 4491.

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Morning Dew - 12 August 2013

Key Points

• The key NFP data released on August 2nd showed that throughout July, the US economy had added 162k jobs, following a 188k added in June. The reading was less than expected as economists initially saw a 185k gains in payrolls. Meanwhile, the unemployment rate fell from 7.6% to 7.4% during the same period. The mixed data is seen neutral which would neither boost nor reduce the odds of the Fed to start reducing its stimulus in September.
• Struggling just before a week-long holiday, the JCI outlook is looking ominous as sentiment on US stocks took a bump as September nears. While better-than-expected data deserves cheers, such readings instill concerns over the timing of the Fed's reduction of stimulus as soon as FOMC's next meeting in September. In addition, technically speaking, the weekly chart outlook of the DJIA hinted on a potential U-turn the coming week. Weak finish before the holiday and poor Dow urge caution for next Monday session.
• For detailed technical outlook, please refer to the other pdf file linked to this post.

Click here to download the full update (PDF)
Click here to download the technical update (PDF)

Morning Dew - 2 August 2013

Key Points

• JCI ended slightly higher on Thursday as the resistance at around 4630-4640 continues to cap the advance. This however, may finally give way on Friday as the rising S&P may serve as a positive catalyst in the near-term for the JCI. Clearing this resistance will push the index to aim at 4779. Once cleared, this will mean the wave ii of c is likely to be over and that we're heading towards the completion of wave iii of c. Support stays at 4563 ahead of 4545.
• Better-than-expected jobless claims and ISM for manufacturing data have sent the S&P 500 index to rally past 1700 mark. Both the Dow and NASDAQ also climbed. Jobless claims were down by 19k last week, signaling that the employment outlook continues to improve. US manufacturing sector also accelerated its expansion as the ISM index rose to 55.4 in July after a 50.9 reading in June. As economic data continues to improve, the odds for the Fed to start reducing its stimulus in September is also seen increasing.
• Friday is seen positive as global mood will get a lift from rising US stocks. The recos pool still got ASRI trailing the others, with WSKT continues to lead the gainers. No new recos as one full week holiday is coming. The JCI is seen trading lightly as the week fades into a close ahead of a very, very, very long weekend.

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