- Better than expected data may spark declines while worse than expected data may actually put up support on sentiment. At least that's what we may be seeing for some time. The Dow escaped another round of decline after the U.S. 1Q13 GDP was reportedly growing at the rate of 2.4%, less than the expected 2.5%. In addition, jobless claims also ticked up last week to 354k, more than expected; plus pending home sales decelerated in April, much slower than last month's month-on-month data. Less than expected data will give more case for the Fed to maintain its stimulus rather than scaling it back, hence market-friendly - for now.
- JCI fell to as low as 5111 on Thursday, just above the support at 5108 before it settled the day at 5129. While the downside remains open, the small gains on U.S. and European stocks overnight may limit the downside for now. Supports remain at 5108 while below 5072 could trigger a deeper fall towards 5046. Upside is seen capped around 5225.08 with near-term resistance at 5153. As the MACD slips back to the negative with RSI falling, we're simply not out of the woods yet.
Kamis, 30 Mei 2013
Morning Dew - 31 May 2013
Key Points
Rabu, 29 Mei 2013
Morning Dew - 30 May 2013
Key Points
- JCI climbed for another day to reach 5225.08 but got pushed back to finish the day at 5200.69. The gains are expected to be further trimmed on Thursday after the European and U.S. stock indexes fell on Wednesday night. Resistances are seen at 5225.08, 5251.30, 5284 and 5300 with further target at 5367. Near-term supports are expected at 5189, 5167, 5148, 5130, and 5108. Below 5072 will risk 5046.
- The sentiment went south again during Europe and US sessions as investors realigned their focus back on to the Fed's monetary policy and after the positive impact from U.S. data turned out to be short-lived. While Japan and Europe re-emphasized that they will keep their respective stimulus on, the Fed stated that the stimulus could be reduced if sustained improvement in growth is seen. As stated yesterday, Fed's last week statement could mark the beginning of an end of the entire Fed's easing cycle.
Selasa, 28 Mei 2013
Morning Dew - 29 May 2013
Key Points
- JCI soared on Tuesday after came under pressure during prior sessions. The index fell briefly to 5072 before rallying higher to 5186.82 and settled the day at 5176.23. Technical indicators which were bearish earlier took a sharp turn as the daily candle formed bullish engulfing pattern coupled with a turnaround in MACD and supported by a jump in volume. Resistance will come next at 5209, followed by the all-time high figure at 5251.30, 5284, 5300 and 5367 while near-term support lies at 5160. More supports come at 5143 and 5129.
- We should be aware that the rout last week started when the Fed chairman Ben Bernanke dropped a hint that while the Fed won't remove its stimulus, scaling it down has been viewed as an option. Depending on the next three months of data, the Fed will consider its next move. The sources of the rally on Tuesday came from Japan and Europe instead where both central banks' officials pledged to keep their accommodative stances as long as necessary. This mismatch means that we're not out of the woods yet and that unless Fed officials pledge the same view like their Japanese and European counterparts, the downside risks still remain.
Senin, 27 Mei 2013
Morning Dew - 28 May 2013
Key Points
- Another rout for JCI at the beginning of the week after last week's statement from the Fed boss Ben Bernanke that the US central bank may scale back its stimulus should the US economic data warrants it, especially if employment outlook gets better. In addition, bearish echoes from the latest China's manufacturing PMI data remain. Technically speaking, the decline on JCI on Monday took out the support at 5089 and this has set the next support line at 5030 and subsequently, 4907.60. Resistance will be at 5174.67 and 5251.3. As U.S. market was closed on Monday, the JCI is likely to fluctuate between 5050-5100 with an outer band between 5030 and 5175. With the MACD now slipped to negative, the bears are holding the advantage.
- US market will return this Tuesday with the consumer confidence data for May. The reading is seen at 71, better than earlier month when it was 68.1. Still, this week's string of economic data is seen moderate with the U.S. GDP to be released on Thursday and personal income and consumption on Friday along with the University of Michigan confidence index.
Jumat, 24 Mei 2013
Morning Dew - 27 May 2013
Key Points
- JCI barely able to hold on to its gains last week. The index managed to score a new peak at 5251.3 but tumbled afterwards on Thursday to as low as 5089 before it settled the week at 5155.09. LQ-45 and IDX30 indexes were not as fortunate as their gains all but lost as the two ended down by 0.04% and 0.19%, respectively. Three supports will be key for JCI in the coming week: 5089, 5030, and 4907.60. Resistance lies at 5174.67 and then 5251.3. Technically speaking, the rally stays alive, but the price is likely to consolidate.
- Ben Bernanke's speech last week might have been a game changer after all. The Fed chairman suggested that while taking away the entire stimulus from the economy may not be a good idea, scaling it down a bit may do the trick, on the condition that the unemployment rate and the inflation data are supporting the case. This statement was taken negatively as global stocks went on massive retreat on Thursday.
- Another slap in the face last week came from China as the country's PMI index for manufacturing sector fell below 50, worse than what the market had expected and this suggested that manufacturing had contracted in May. The official data will be released the coming week. So far, global growth has been seen coming from China as well as a product of the Fed's generous stimulus. Taking these away from the equation can only mean more downside for equities.
Kamis, 23 Mei 2013
Morning Dew - 24 May 2013
Key Points
- Bernanke's remarks on possible scaling down of Fed's asset purchases coupled with the sinking of China's manufacturing PMI towards the contraction zone sent the bulls ran for cover. JCI tumbled over 100 points before it settled at 5121.4, down 1.66% while the regionals also crumbled as Nikkei sank over 1000 points and the Hang Seng index plunged over 500 points. Within the next three months the market will watch the U.S. data closely, especially the labor market data as well as inflation. Low inflation rate may preserve the current Fed policy, but sharp uptick could mean a scaling down of asset purchases. Similarly, a scale down of asset purchases will be increasingly possible if the employment outlook in the U.S. improves.
- JCI technical outlook for Friday suggests that the correction had almost reached its maximum retracement point at 5082. Further decline may send the index towards 5030 which will mean that the correction will be deeper than initially expected. However at the moment the index is expected to rebound from Thursday's low with the resistances come in at 5127, 5151 and 5170. MACD is starting to decline, so the upside will be somewhat limited. Friday's range is seen around 5151 and 5082.
Rabu, 22 Mei 2013
Morning Dew - 23 May 2013
Key Points
- Ben Bernanke in his testimony before the Congress said that premature monetary tightening may endanger the recovery of U.S. economy as high unemployment rate persists, accompanied by government spending cuts. Still, the Fed's boss took away some of the positivity of his statement by saying that the Fed could 'step down' the pace of its asset purchasing program should the labor market starts to show sustainable improvements. More specifically, the Fed expects to maintain its current policy until the jobless rate reaches 6.5% or inflation pops above 2.5%. In addition, New York Fed President William C. Dudley indicated that the Fed will wait three to four months before the FOMC votes whether the economy is good enough to endure a stimulus reduction.
- JCI ended higher on Wednesday at 5208 after failed setting another record high. Resistances stay at 5284, 5300 and 5367 while interim support comes in 5161 before the next ones at 5142 and 5116. Bernanke's speech sent the U.S. stocks into the red and this will also bring negative impact on JCI during the coming session. Look for JCI to gyrate around 5116 and 5251 for Thursday.
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