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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