Market Overview 16th Nov 2011

 Wednesday, 16th Nov. The FBM KLCI eased yesterday as European debt worries weighed on sentiment while other Asia benchmark were closed lower as well.

"-U.S. stocks closed modestly higher Tuesday, clearing some of the prior day’s drop, after reports cast a more positive light on the U.S. economy, helping curb concern over Europe’s debt crisis. After falling as much as 77.7 points and gaining 86.1 points, the Dow Jones Industrial Average DJIA +0.14% closed up 17.18 points, or 0.1%, at 12,096.16. The S&P 500 Index SPX +0.48%  rose 6.02 points, or 0.5%, to 1,257.81, with information technology performing best of its 10 subsectors. Only energy closed lower. The Nasdaq Composite Index COMP +1.09%  also picked up some steam, ending up 28.98 points, or 1.1%, to 2,686.20."

"-Asian stock markets followed their U.S. peers lower Tuesday, as a rise overnight in Spanish and Italian government-bond yields stoked concerns that Europe’s debt crisis was deepening. Hong Kong’s Hang Seng Index HK:HSI -0.82%  finished down 0.8%, while Japan’s Nikkei Stock Average JP:NIK -0.72%  dropped 0.7%, South Korea’s Kospi KR:0100 -0.88%  lost 0.9%, Australia’s S&P/ASX 200 AU:XJO -0.44%  fell 0.4%, and China’s Shanghai Composite CN:000001 +0.04%  ended almost flat.

The moves came after the Dow industrials DJIA -0.61%  lost 0.6% and the S&P 500 SPX -0.96%  fell 1% Monday, as Italy’s and Spain’s costs for borrowing climbed."

"-Crude futures closed above $99 a barrel Tuesday, buoyed by better-than-expected U.S. data on retail sales and manufacturing, but a stronger dollar and renewed worries about Europe’s debt outlook helped keep a lid on price gains. Crude for December delivery CL1Z -0.17%  rose $1.23, or 1.3%, to settle up to $99.37 a barrel on the New York Mercantile Exchange. That was the highest closing level for a most active contract since July 26, according to data from FactSet Research."

"-U.S. soybean futures rallied, continuing a three day a correction from prior losses on technical buying and market perception of fresh export demand. There is speculation of China buying U.S. or South American soybeans, a fundamental feature helping to underpin soybeans' rally. Traders viewed most of the gains as technical in nature, with buyers encouraged that prices were oversold after traders were unable to press prices through early October lows. The combination of light new buying on the lows, backed by renewed speculation of China's buying, opened the door for a strong correction in soybean prices, said John Kleist, senior analyst with ebottrading.com. CBOT Jan soybeans ended up 22 cents, or 1.9%, at $12.00 1/4/bushel. Soy product futures ended higher, with soyoil futures soaring near a one-month high. Advances in soyoil were driven by supportive demand outlooks, with crude oil rising near $100 a barrel making margins on biodiesel produced from soyoil more attractive, says Jack Scoville, analyst with Price Futures Group. Soyoil also drew support from fundamentally bullish inventory data from Monday's NOPA October soy-crush report. CBOT Dec soyoil ended up 2.7% or 1.38c at 52.60 cents/lb, and Dec soymeal end up $2.20 at $301.40/short ton.

FKLI- Still Trapped Within The Range With Weak Regional Sentiment. 

Some shares prices on the main board closed lower yesterday while other were mostly traded unchanged as investors continue to weigh foreign sentiment such as Euro zone debt crisis and possible slow down on Asia economy for the coming term. Local stock market might not taking full advantages over the U.S market major companies earning reports season as their stock index is having some correction at the moment after rising for 3 sessions straight. Back to the index futures, market is likely hovering on sideways mode at the moment with resistance level placed at 1,490 level while support level is located around 1,430 level. Although we might not expecting significant correction for the index futures to fall swiftly unless there was a really bad news coming out from Eurozone debt development. The index futures will be having tough time conquering above 1,490 resistance level for the moment as it fail to do so on previous Wednesday, last week. If it does rise close to this resistance level, it will be the third attempt to test the resistance level. Overall, with major resistance identified plus a "death cross" on MACD daily chart, index futures is prone to travel south gradually before it hit the support level and recover again.

Daily Pivot Point
R2= 1475
R1=1468
S1= 1458
S2= 1454

FCPO-  Its About Time To Pave Way For Correction

CPO futures retrace yesterday as global equities market closed lower due to renew worries over Eurozone debt worries. It was the last trading for the benchmark month Jan yesterday as the new third months contract will be replaced by Feb 2012 contract today, but liquidity on the Jan contract may not fade away so soon. Traders who still holding the Jan contract may opt to close off their position but not later than next 15th Dec 2011.  The new benchmark Feb could use some correction after rising for 3 days straight since previous Thursday. The Bulls need to take some breather before charging again and therefore pay attention to the volume when the market does retrace. It is best that the volume and open position stay lower when this correction occur as market night be retrace for profit taking activities rather than massive shedding of positions. Currently, major support level is likely located around 3,100 as illustrated on the hourly chart above, which are the provision for the market to start recovery if it does retrace for profit taking soon. Else we might not see any significant correction at all (if Soya oil recover overnight) as palm oil fundamental does recover yesterday when the cargo surveyors announced average 11% increased in export figures for the month of Nov vs Oct.

"-Malaysia Nov. 1-15 Palm Oil Exports Rise 11.6% To 802,917 Tons -SGS."
"-Malaysia Nov. 1-15 Palm Oil Exports 801,463 Tons, Up 10.5% -Intertek."

Daily Pivot Point
R2= 3228
R1=3202
S1= 3156
S2= 3136
Disclaimer: Information and opinions contained in this report are for educational purposes only. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness.