Morning Dew - 1 July 2013

Key Points

• Following Ben Bernanke's 'hint' on the unwinding of Fed's stimulus, June was a turbulent month for JCI as well as for global stock indexes. JCI hit the low of 4,373 before it bounced back to as high as 4,818 last Friday. Unlike last month, Bernanke's hint was not the single negative catalyst, but added with the fear of China slowdown, fuel price hike in the domestic front as well as Europe's monetary policy which is likely to be steady with no more added stimulus visible. Markets also concern about the political situation in Greece although this should be slowly neutralized as the parties find resolve.
• Essentially, the ball is at the Fed's court. Regardless of the noises swirling around the market, the Fed has set out the course for a reduction of stimulus, possibly as soon as September; afterwards we may see the stimulus fully removed sometime next year, and finally a rise in rates in 2015. The reference numbers are also clear as the Fed set the conditional unemployment rate at 6.5% and the inflation at 2.5% (half percent above the FOMC's long-term inflation target).
• If May was a busy month, June was an even busier month. Unfortunately, it did not end happily as five recommendations ended with losses and just two with gains. Still the net stayed positive. MPPA and AKRA gained 75% and 11.21%, respectively; while APLN, BKSL and BIPI lost 9.58%, 17.54%, and 12.05%, respectively while MDLN and WIIM ended losing 16.82% and 11.58%, respectively. Overall, the final tally was a gain of 18.85%.
• China's PMI for manufacturing and non-manufacturing sectors will kickstart the coming week. The market has been increasingly concerned over the outlook of Chinese economy recently. Meanwhile, key US data will be the nonfarm payrolls and unemployment rate. These two are crucial for the Fed in deciding how soon they will start reducing the stimulus.
• Technically speaking, the first corrective wave has been completed at 4373 in a five-wave structure. The current bounce is considered as the second leg of the correction or wave B. Resistance comes at 4880, the end of wave 4 of the first leg down, and a successful break of this level is likely to push the JCI to the next crucial resistance at 5072, the end of wave 1 of the first leg down. We have yet seen any meaningful pullback since the index bounced off the low at 4373 and given the downtick of the Dow, we may see the JCI to pull back a bit as well. Still, the MACD has turned positive, coupled with classic bullish divergence of both MACD and RSI (which is also accompanied by a failure swing). This could mean any setback should be temporary and the rally may continue to aim at 5072. Keep in mind that as the rally is still considered as wave B, we are NOT out of the woods yet.

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Morning Dew - 28 June 2013

Key Points

• JCI continued its rally on Thursday and went up to as high as 4732.99 before it settled at 4675.75. There is no change in view. The index is still vulnerable and the current rally is considered as a healthy corrective move with projected target area around 4812-4880. Support is seen around 4500-4510. For now the downside seems to be secured.
• Below-the-consensus data released on Wednesday continues to shape the market's expectation that the Fed is not going to make a move sooner. Elsewhere, Fed Bank of NY President William Dudley said that the Fed may still prolong its stimulus policy if the economic variables fail to meet the expectation. Another Fed talk came from Jerome Powell also shared a similar idea. A day earlier, Richmond Fed Jeff Lacker said that U.S. expansion remain to be sluggish for a couple more years.

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Morning Dew - 27 June 2013

Key Points

• JCI booked a stellar rebound on Wednesday as stocks roared 3.82% up. The five-legged rout seems to be over for now and as technical indicators are improving, we may see more upside attempts. Some Fibonacci resistances at 4708, 4812, 4916 and 5044 are seen. In addition a textbook rule of the wave theory adds two more key resistances: 4880 and 5072. Hence, the first leg of this rebound is expected to run its course to 4812-4880 area.
• Another positive day is seen on Thursday after the US stocks registered another positive performance, thanks to less-than-expected 1Q13 GDP. Below forecast GDP is seen supporting a case against earlier removal of stimulus by the Federal Reserve.Despite this common view, it should be noted that the Fed's focus is clearly on the labor market, not the GDP. This will not change the big picture that the stimulus may be scaled down sometime in the last 3-4 months of 2013 and in 2014 we may see the Fed takes it back completely.
• More US data to come on Thursday night are the jobless claims, Personal Consumption Expenditure and personal spending and saving.

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Morning Dew - 26 June 2013

Key Points

• JCI started Tuesday session positively before it came crashing later on and finished down by 0.24%. The lowest point scored was 4373 but later on the index settled at 4418. Support remains crucial at 4139 but as the downside looks overdone for the moment, expect a healthy rebound to bring the index back to around 4510 again. Stronger rebound may see itself capped at more solid resistance at 4880.
• Thanks to a string of positive economic data from the U.S., the market finally took a breather as the Dow finished the Tuesday session up 100 points while the S&P and NASDAQ finished up 0.95% and 0.82%, respectively. This could set up a nice rebound for Asian indexes on Wednesday. Consumer confidence index climbed from 74.3 to 81.4 in June, goods orders also jumped 3.6%, beating consensus, while new home sales soared to a five-year high along with the increase in US housing prices.
• Still, the better the economic data in the U.S., the sooner the Fed will unwind its stimulus. At the moment, the scale down is expected in the September at the earliest, while in a year the stimulus could be gone.

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Morning Dew - 25 June 2013

Key Points

• String of negative catalysts continue to send the market sentiment downhill. Chinese equities nosedived on Monday, dragging it into the bear market and taking along with it the regional indexes such as Hong Kong, Japan and also JCI. Cash crunch in China added with the prospect of stimulus removal in U.S. plus some worries over Europe resulted in more downside pressure for global stocks.
• JCI fell to 4429, within spitting distance to the next support at 4422 which if lost will send the index even lower towards the next pitstop at 4139. MACD continues to break lower, but volume also fell, suggesting that despite the decline, the downside momentum is fading. Still, upside is very much limited to 4510 in the short-term. Even 4880 now looks like a tough resistance to crack. The Dow's losses overnight could mean it won't be a nice weather this Tuesday.
• We lost another on Monday as BKSL fell below 240. The recommendation pool is now down to nine and all nine are losing out at the moment.
• On another front, Goldman Sachs has cut its gold forecasts for 2013 to $1,300 per troy oz. in 4Q and to $1,050 per troy oz in 4Q14…

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Morning Dew - 24 June 2013

Key Points

• Fed's FOMC meeting ended with Chairman Ben Bernanke reiterated the Fed's stance over the potential unwinding of its current asset purchases - expected by the market sometime this year, possibly September, and the total elimination of the stimulus - according to Bernanke himself - sometime in mid-2014. Bears struck again and the global stocks resumed the journey downhill. Outside US, a crack in the Greek coalition government sparked renewed political concern while China's data also came in as negative. Domestically, the government has finally set the fuel prices to be raised on Saturday.
• The absence of positive catalysts means the JCI risks more downside in the coming week. Technical picture of JCI shows that key support at 4510 has been tested. Next below 4510 will be 4422 and afterwards 4139. MACD indicator has continued its descend while the 200-day EMA has been breached by a decent margin. The volume also accelerated on Friday. Upside may be limited to 4620-4630 where the 200-day EMA has turned into resistance. More key resistance will be the pivotal 4880.
• The drop on Friday took out another reco out as MDLN tripped its stop. On the contrary, MPPA managed to reach its target at 3150, gaining 75% in the end. We're now back at ten active recos.

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Morning Dew - 21 June 2013

Key Points

• Fed's FOMC meeting yesterday triggered another wave of selloff as the JCI got pummeled once more. Following that, the U.S. market plunged as the Dow lost 2.34% in Thursday session. Now, according to a Bloomberg poll, 44% of economists surveyed see the Fed to start tapering out its stimulus. Bernanke himself hinted that the entire stimulus may be removed - should the conditions warrant it - sometime in the mid of 2014. Unfortunately, this could mean an unwinding of stocks.
• Cutting through supports with ease, the JCI has arrived near the support at 4597 and this means closer to the crucial 4510. Unfortunately, the latter is seen tested this Friday, following a meltdown at the Street. Below 4510 will mean a move back towards 4222. MACD has turned down again, and we're close to breaking below the 200-day EMA. Resistance is seen nearest at 4880.
• The Thursday drop took out the stop set for WIIM at 840. So, this one has been removed from the reco list with the loss of 11.58%.

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Morning Dew - 20 June 2013

Key Points

• Early gains evaporated on Wednesday as JCI waited for the result of the FOMC meeting. JCI now looks vulnerable to more pressure after Chairman Ben Bernanke reiterated the Fed's stance that stimulus will be removed as soon as the economy outlook improves. This may be around mid-2014, according to Bernanke. Fed expects the jobless rate in the US will decline to 6.5%-6.8% by the end of next year, possibly triggering the Fed to start raising the lending rate.
• Shaky JCI will look for supports at 4793, 4739, 4695, 4651 and 4597 before the key 4510. Upside seen capped at around 4880, 4968 and 5076. It is likely that we are currently within a large consolidation range between 4500 and 5000.

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Morning Dew - 19 June 2013

Key Points

• JCI clawed higher on Tuesday as it got passed through its resistance at 4830, hitting the intraday high at 4862.01 before it settled at 4840.45 at the end of the day. This has been largely expected as the index is now within a consolidation phase which potentially set the trading range between 4500-5000. The nearest support at 4697.88 looks secure for now. More critical supports come at 4568 and 4510 with Tuesday's low at 4794.82 has been listed as interim support for the coming sessions.
• US stocks drifted higher as the Fed started its meeting last night. The FOMC will deliver its decision later tonite as the market watches cautiously.

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Morning Dew - 18 June 2013

Key Points

• Federal Reserve's FOMC meeting has been capping the JCI's advance early this week as the market ponders how the Fed will update the market's expectations when their 2-day policy meeting concludes on the 19th. As economic data flow have been mostly positive the market has been drifting towards a positive bias. Still, full pricing in of the Fed's backscaling of stimulus may still have some more time till it concludes.
• Fuel price hike is coming soon after last night the House of Representatives voted to agree the revised state budget. This is not something surprising considering the government's efforts to socialize the fuel price hike for some time now, nor the amount of hike is surprising as we all know what the price will be when the price is hiked. Nevertheless, along with the unwinding of Fed's stimulus, fuel price hike is a negative in the medium to long-run as more pricey fuel means less money to spend for the people.
• Resistances are at 4830, 4880 , 4968 and 5076 for now. Yesterday's bounce has been capped by the 100-day EMA at around 4830, but strong volume suggests that we may see more of the upside in the near-term. On the downside, the nearest support lies at 4697.88, followed by 4568 and 4510. We are now at a large consolidation phase which is potentially ranging between 4500-5000.

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Morning Dew - 17 June 2013

Key Points

• Despite a strong rally on Friday, JCI still lost more than 2% throughout the week. The bounce reached just below the 38.2% Fibo retracement of the entire decline, so it means it will be too soon to declare that the rout has finished. More Fibo resistances spotted at 4793, 4880, 4968, and 5076. In addition, the 100-day and 50-day EMA curves are now act as resistances. Near-term support comes at 4568 with 4510 as the key support. MACD has started to pull up while RSI has started to curl up as well. We may see more upside next week, but keep in mind that we're not out of the woods yet.
• Federal Reserve's FOMC meeting will take the central stage this coming week. The market will be keen to hear what the Fed's going to say next. Will they hand out the timetable for the unwinding of the current stimulus? Or will they stay silent about the matter? It is likely that the Fed will emphasize that the stimulus will be scaled back, but on the condition that the employment outlook gets better. The employment condition is likely to be under observation for three to six months before the Fed starts scaling back the stimulus. They won't remove it however, just scaling it back. Inflation may be mentioned but at the current low level it won't serve as a supporting argument for the scaleback. So, at the earliest, we can expect the scaling back to take place sometime near the end of this year, but no rate increase until 2015 is expected.

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Morning Dew - 14 June 2013

Key Points

• Stocks got hammered again on Thursday as selling wave continued, taking the JCI to as low as 4568.12 before it settled the day at 4607.66. Near-term support stays at 4510 with subsequent support zone between 4465-4444. Recovery attempt may still be capped at around 4720.
• Bank Indonesia took the market by surprise as it raised key interest rate by 25 basis points to 6%. Previously this week, the central bank had also raised its overnight deposits rate while saying that it is ready to buy government bonds in a bid to keep the rupiah steady.
• The Fed factor continues to dominate the market. US retail sales data showed sales advanced better than expected while the jobless claims data hinted that the labor market outlook has also improved a bit.Friday is seen most likely to be positive. Three new recommendations have been filled as well (BBCA, BMRI, and BBRI)

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Morning Dew - 13 June 2013

Key Points

• After getting hammered to as low as 4510, JCI finally settled higher at 4697.88. This has not change the bearish outlook as the relief rally may be capped around 4720. Furthermore, the Dow has turned red once again, suggesting that external drag could send the JCI back to test its near-term support at 4510 and subsequently 4465-4444.
• Three top-flight banks are added to the recommendation pool: BBCA, BBRI and BMRI. While they are considered bargain deals at the current prices, we should remain cautious given the overall market condition.
• The market will assess the health of the US employment outlook once more as the jobless claims data is set for release on Thursday. The better the data, the more likely the market will think that the Fed is about to unplug its stimulus program.

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Morning Dew - 12 June 2013

Key Points

• JCI continued its descent to hit the 200-day EMA at around 4610-4630 and reached as low as 4573 before it settled the day at 4609.95. As the selling pressure stays strong, the upside looks increasingly limited. Prior support now turns as resistance at 4721.32, while the next support is seen at yesterday's low at 4573, followed by 4465 and 4444.
• Haruhiko Kuroda's statement that the Bank of Japan will consider longer funding operations whenever necessary and the BOJ's decision to leave the rates steady while refraining from expanding its stimulus package have added more concern on the market that the era of abundant stimulus is indeed coming to an end. Last week's ECB's Mario Draghi also hinted that the ECB will shelve its monetary tools for now, which means no more stimulus should be expected in euroland.
• After getting a black eye on BIPI earlier this week, another recommendation had been forced to close. APLN hit its stop point below 440 and this netted out a loss of 9.38%. Now there are 10 remaining recommendations outstanding, with just two staying above water. 

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Morning Dew - 11 June 2013

Key Points

• JCI didn't go far on its rebound on Monday as it only managed to score an intraday high at 4916 before another wave of selloff hammered the index to end even further down at 4777.37. This has put JCI closer to its next support at 4721.32. Should this support also fails to contain the selling pressure, it is likely to test the resolve of the next one around 4610-4630. Resistance now comes at around 4856-4864, its prior support-turns-resistance.
• US credit outlook has been restored to stable by the S&P, but investors were not impressed as the prior rally came to a halt. Chinese data did not came in with any big surprise so most of the plunge on the JCI was attributable to the worsening technical condition of the JCI as laggards running for exit. Lack of meaningful follow-up from the Dow overnight could mean the JCI is either set for another squeeze or to enter a consolidation period this Tuesday.
• BIPI has become the latest victim of the massive JCI rout. It has been brushed aside from the reco pool as it fell below 147, putting it down with 12.05% losses. On the other hand, the strong retreat has triggered both MDLN and WIIM entry prices and thus we now have 11 open recommendations with just four of them above water.

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Morning Dew - 10 June 2013

Key Points

• JCI severely hit throughout the week. The Fed's stimulus reduction issue remained the major negative catalyst for the index as the market seemed to be starting to factor in the end of accomodative monetary policy period in the U.S. This has been reinforced by the statement from the European Central Bank that they are seeing gradual recovery in the Eurozone economy this year and thus dashed the hope for more monetary stimulus in Eurozone. Further, ECB's Draghi said to be putting rate cut option on the shelf for now.
• US nonfarm payrolls were up by 175k in May, better than the expected 163k and more than 149k which were added in April. The unemployment rate ticked up to 7.6% however, worse than the consensus which forecast it to be steady at 7.5%. Despite its increase, the market responded positively as some analysts forecast that the Fed will need payrolls to rise on an average of 200k for several months before it can bring down the unemployment rate to meet the Fed's criteria of scaling back its stimulus.
• Monday however, is expected to be positive as the JCI is seen rebounding with 5k returns as a decent resistance.Key support now lies at around 4840-4860.

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Morning Dew - 7 June 2013

Key Points

• JCI suffered another decline on Wednesday as the index was back at 5001.22. It is now hovering within the exponential moving average indicators (EMA) while the MACD continues to drift lower. Volume however, seems to be running out of steam, so a rebound is likely to happen, but it remains vulnerable to more pressure. Resistance lies at 5021 first, then 5072 next with additional resistances at 5056, 5093, 5130 and 5177. Support is seen at 4936 at the nearest and 4907 as key support.
• A hint from Europe suggested that there will be no more addition on the amount of quantitative easing while the Fed Ben Bernanke last week hinted that the Fed is considering a reduction in the stimulus if the economy warrants it. Both statements indicate that the era of generous monetary policy is most likely to be over and central banks are likely to hold on to their rates until the economy is giving clear signals of improvement. 
• Nonfarm payrolls this Friday will be the focus of market attention as better-than-expected data may spark another drop as better data means more case for the Fed to take away the stimulus. A worse-than=expected data may spark a rally instead as this will imply that the Fed will have to wait until employment situation improves before pondering a reduction in stimulus. Market consensus stands at 165k while Thursday saw jobless claims fell by 11k to 346k, slightly above the consensus of 345k.

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Morning Dew - 5 June 2013

Key Points

• JCI returned above 5k as the global stock markets bounced back and forth between positive and negative performances. Tuesday's rebound is seen limited to 5056 for now although beyond this resistance lie 5093, 5130 and 5177. Support will be at 4936 at the nearest while 4907 will be the key support to watch. We saw another red from the Dow overnight so we may as well see another red for JCI this Wednesday.
• Recent strings of Fed talks about the stimulus have kept the market cautious over the future of the Fed's bonds purchases program. Fed Bank of Kansas City President Esther George urged the Fed to scale back the purchases while her San Francisco colleague John Williams hinted that modest downward adjustment of the program is possible as early as this summer. Meanwhile Dennis Lockhart who heads the Atlanta Fed Bank said that he is getting more cautious over a reduction as the economic data have been very mixed.
• US employment data will be the next big thing for the market as the data will shape the market's perception over the near-term. The better the job data will be, the more likely the market will think that the Fed will scale back the stimulus as soon as September. ADP employment report will provide the hint on the private sector side this Wednesday. The market expected private sector to have added 170k jobs in May, up from 119k in April.

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Morning Dew - 4 June 2013

Key Points

• JCI slipped below the 5k mark as the rout continued on Monday. The market sentiment has been turning for the worse after last week's remark by the Fed that the stimulus program could be curtailed if condittions warrant it. JCI plunged to as low as 4958 before a bounce kicks in and lifted the stocks to close at 4971.35. Interim support lies  at 4958 and then 4907.59. Resistance lies at 5072, then 5200.692 and 5251.30.
• After a string of more bad news, the U.S. stocks clawed its  way back up. This indicates that JCI may also have some bounce on Tuesday. US manufacturing PMI fell below the 50 mark and this brought the Fed's stimulus scaleback into doubt. Surely, the more bad news we will see, the more likely the market will be positive. Key data will come on Friday as nonfarm payrolls will again test the investors' faith. For now, payrolls are expected to grow by 168k from last month's 165k. Unemployment rate is seen steady at 7.5%, however.
• While the market was pummeled on Monday, AKRA managed to rally and reached 5950, its final target. The recommendation is now closed with gains of 11.21%. We still have two more recommendations to fill up: MDLN and WIIM. No change on the recommendations for today. Expect the JCI to claw its way up as corrective bounce sets in. Still the upside is seen very much limited.

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Morning Dew - 3 June 2013

Key Points

• Ben Bernanke's statement over the potential reduction in the Fed's stimulus might have been the game changer after all. The market seems to be factoring in the possibility of an end of the accomodative monetary policy period. Sell in May and go away may still applicable after all. Now, looking ahead, the better the job and growth data, the more likely that the Fed will start to unravel its stimulus program. June may not be as generous as May.
• JCI reached new heights in May, but the finishing has put optimism into question. At the final day of the month, the index plunged to hit the low of 5068. The fall was accompanied by surging volume and a further acceleration of the decline as seen on the MACD indicator. Supports are now seen at 5039 and 4989 while 4907.59 is going to be key support the coming week. In addition, a crack of prior low at 5072 is seen to open up the possibility for the index to fall towards its projected level of 5046 and 4935. Upside seen capped around 5225.08 with the subsequent resistance lies at 5251.29.
• A rather busy month of May as three recommendations were completed. BBNI managed to scoop 49.66% of gains while the other two were not so unfortunate and hit their respective stops. PNBN lost 9.41% while KPIG lost 10.81%. Added into the list of recommendations were AKRA, BSDE and BWPT, while there are two more recommendations pending to be filled: MDLN and WIIM.
• US Nonfarm payrolls data will be the key figure this coming week. As the better the data, the more likely the Fed will curtail its stimulus, the stock market may actually want to see a so-so or less-than-expected results. Payrolls data is expected at 168k, slightly up from 165k recorded a month before. Unemployment rate is seen at 7.5%, steady from a month earlier. Before the release of the nonfarm payrolls, the ADP employment will be released on Wednesday whereas private sector employment is seen to have improved to 170k from 119k. ISM data for both manufacturing and non-manufacturing are also set for release the coming week. For manufacturing sector the ISM index is expected to slip from 50.7 to 50.5 while for the service sector the index is seen improving from 53.1 to 53.5.

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