Market Overview 18th Nov 2011

18th Nov, Friday. The FBM KLCI slam dunk on the closing bell yesterday as investors are not convinced over the development on the Euro debt crisis recently. Other news to follow.

"- U.S. stock losses intensified on Thursday as investors sold equities as well as assets more typically used to hedge stock bets, as rising borrowing costs in Europe unnerved Wall Street. The Dow Jones Industrial Average DJIA -1.13%  ended down 134.79 points, or 1.1%, at 11,770.80, reclaiming some lost ground in the session’s final minutes after losing more than 200 points. The S&P 500 Index SPX -1.68% closed down 20.75 points, or 1.7%, at 1,216.16, with natural-resource stocks and technology shares the heaviest weights of its 10 sectors, which all ended lower. The Nasdaq Composite COMP -1.96%  dropped 51.62 points, or 2%, to 2,587.99."

"-Asian stocks moved off opening losses Thursday, with many indexes finishing in positive territory, though the Hong Kong market ended solidly lower as European debt concerns depressed financials. South Korea’s Kospi KR:0100 +1.11%  rose 1.1%, while Japan’s Nikkei Stock Average JP:NIK +0.20%  closed with a 0.2% gain, and the Australian S&P/ASX 200 index AU:XJO +0.25% rose 0.3%. However, Hong Kong’s Hang Seng Index HK:HSI -0.76%  ended down 0.8%, as futures pointed to losses in European markets ahead of key French and Spanish sovereign-bond auctions later in the day. The Shanghai Composite Index CN:000001 -0.16%  ended down a more modest 0.2%. Asia-listed shares had been hit this week by further worries about Europe’s debt crisis expanding to other members of the euro zone, as bond yields for some nations rose."

"- Crude-oil futures fell Thursday on persistent worries about the euro zone and the health of the global economy and as investors wondered whether optimism over a pipeline deal had been overstated. Crude for December delivery CL1Z -0.57%  dropped $3.77, or 3.7%, to $98.82 a barrel on the New York Mercantile Exchange, with losses mounting in the last stretch of floor trading."

"-US soybean futures end down, falling amid on broader risk-off trading in commodity markets. Worries that the European sovereign-debt crisis might spread across the continent along with slow global economic growth sparked nervous selling as traders trimmed risk exposure. Spillover pressure from sharply lower corn and wheat futures added to the negative mood in the market, but confirmation of strong export demand provided support that limited losses. CBOT January soybeans ended down 19 1/2c at $11.68 1/4 a bushel. Soy products fall with soybeans, Soyoil futures tumbled on spillover pressure from soybeans and sharp declines in crude oil futures, analysts say. Crude oil influences soyoil, as biodiesel fuel is derived from soybean oil. Soymeal ended lower, but declines were limited by higher-than-expected weekly export sales data. CBOT Dec soymeal ended down $1.90 at $294.50/short ton; Dec soyoil dropped 1.08c to 51.40 cents/lb."


 FKLI- Lower High Detected On Hourly Time Frame Candles

 This is not a fright attempt to scare the readers out there but an indication that market is showing some sign of weakness on yesterday close. A stern warning to those may have over leverage / over trading in the Futures market, always remember to keep your margin and equity in checked. Timing is fatal in the financial market while traders need to be aware about the degree of risk when they hold any positions. At close, the FBM KLCI suddenly drop 11.37 points to 1,465.47, closing at the low of the day. This is not a strange scenario as most institutional investors choose to trim down their exposure on the closing bell. On technical perspective, market has been hovering on sideways movement as it is looking for certain direction. There are less commitment for the positions traders to commit any trade in the market. Furthermore, judging on the symmetrical triangle above the index futures is likely weaken further if it breach below today immediate support level at 1,458 level. if this event occur, market is expected to recover based on previous support area or known previous lows.  For today, major support is located around 1,440 while resistance is pegged at 1,467.

Daily Pivot Point
R2= 1472
R1= 1467
S1= 1458
S2= 1453

 FCPO- Correction In Progress

 CPO futures was traded lower yesterday after surging excessively previously as profit taking activities kick in during the afternoon session. The same goes to the law of physics, market need some breather at some point when it has surge to a new highs. Yesterday, the benchmark Feb closed RM29  lower to 3,212, it topped 3,268 level on morning session. Noticeable profit taking activities occur when the benchmark Feb start to retrace below 3,240 level (Tuesday closing value was 3,241 ), prompting more Long holder to trimmed their positions yesterday. Fortunately, it was a steady decent rather than swift Selling at the market, which could strengthen the possibilities of profit taking activities. Overall palm oil positive momentum in medium term still hold as yesterday retrace are likely turn into a healthy correction. More traders are likely to jump into the Long side band wagon when the prices start recovering from previous retracement. On the sentiment side, weather will stays as the headline for the market to move for the moment. Rainy and wet weather are likely curb palm oil harvest and crop cultivation thus reduced the supplies available for this near term. Based on that theory, prices for palm oil are likely to rise due to tight supplies. For today, support is located around 3,174 level while resistance is pegged at 3,249.

Daily Pivot Point
R2=3286
R1=3249
S1=3193
S2=3174
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.