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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