Market Overview 12th Dec 2011

Monday, 12th Dec. The FBM KLCI recorded another losing streak on previous Friday, ended the week in negative territory amid European Union debt fears extended after the ECB meeting. Other news to follow.

"-U.S. stocks closed higher on Friday, with the three benchmark indexes scoring gains for the week, as European leaders agreed to closer fiscal ties and U.S. consumer confidence hit a six-month high. Logging a second consecutive week of gains, the Dow Jones Industrial Average DJIA +1.55%  rose 186.56 points, or 1.6%, to finish at 12,184.26, for a 1.4% gain on the week.The S&P 500 Index SPX +1.69%  added 20.84 points, or 1.7%, to 1,255.19 with financial companies pacing the gains among its 10 major industry groups. The index finished the week 0.9% higher. The Nasdaq Composite COMP +1.94%  advanced 50.47 points, or 1.9%, to 2,646.85, ending the week up 0.8%."

"-Asian shares fell sharply Friday, with early losses exacerbated after reports of a lack of agreement on deeper fiscal union at the European Union summit. Hong Kong’s Hang Seng Index HK:HSI -2.73%  dropped 2.7%, while the Shanghai Composite Index CN:000001 -0.62%  lost 0.6%. Japan’s Nikkei Stock Average JP:NIK -1.43%  fell 1.5%, South Korea’s Kospi KR:0100 -1.97%  lost 2%, and Australia’s S&P/ASX 200 index AU:XJO -1.82%  gave up 1.8%. European and U.S. stocks had ended with sharp losses Thursday, setting the stage for a drop in Asia, after European Central Bank President Mario Draghi told reporters the European Union treaty prohibits “monetary financing.” The remarks came as the ECB cut its key cash rate to 1%, as expected. "

" Crude-oil futures ended 1.1% higher on Friday, after spending most of the session wavering between small gains and losses as traders shied away from the markets ahead of the weekend and the uncertainties it brings. Crude for January delivery CL2F +1.52%  added $1.07 to settle at $99.41 a barrel on the New York Mercantile Exchange. On the week, crude was 1.5% lower."

"- US soybean futures slide to 14-month lows as the USDA forecast higher-than-expected inventories, putting renewed pressure on prices as buyers are less concerned about the availability of soy stocks in the face of favorable crop outlooks for South American beans. Analysts note prices today drew further pressure from lingering uncertainty about the euro-zone debt crisis, concerned that global demand will suffer without a solution to the problem. CBOT January soy ended down 2.3% at $11.07/bushel.  Soy-product slumped along with beans as government forecasts projecting greater availability of soy weighed on products, with soyoil drawing additional pressure from larger estimated year-end supplies. CBOT January soyoil ended down 0.85c at 49.60c/pound while soymeal slid $7.40 to $276.90/short ton."

FKLI- Extended Correction Due To European Debt Concern

 Stock index ended in negative territory again on previous Friday along with Asia benchmark amid escalating concern over European debt crisis that might turn into worse financial default incident in this decade. Stock index was traded 12.79 points lower to 1,460.13 level on previous Friday, about 4 points off the low. The stock market have been spending for the past three sessions to erase most of the gains achieved from previous gap up. Obviously there was no continue follow thru Buying activities when the market gap up to above 1,500 last week for both stock index and index futures. In other words, it was not a break away gap that happen on that gap up. To make matters bad this coming weeks, there was no major progress to be made by European leaders at an ongoing meeting to resolve the region's sovereign debt woes. Technically, the index futures has gone thru a gruesome retracement after gaping up previously and there is no telling for sure when and where this correction would halt. A typical guess for the next support level would located around the white diagonal support trend line shown on hourly chart above. Nonetheless, market could resume its upside momentum if the market manage to rallies from here, thus creating higher low formation along with it. 

Daily Pivot Point
R2= 1471
R1= 1464
S1= 1449
S2= 1442

FCPO- Ended With Indecisive Week.

 CPO futures ended slightly lower on previous Friday paving more way for sideways movement for this coming week. The benchmark Feb ended RM7 lower to 3,082 level at the closing bell, market was traded within 3,097~3,063 range throughout the day. Up until now, there was no additional sign to strengthen this current upside momentum as market are spending most of the time hovering inside the range within 3,133~ 3,060 level for the past three sessions last week. Most possible trade set ups and strategies are tailored for short term investment for the time being by adhering to the possible trading range (plus minus 30 points from the open price) with no overnight exposure or positions (due to fundamental uncertainties as well). Rumored was out that export figures for the upcoming MPOB and cargo surveyors are likely lower which will pressure palm oil prices to retrace further. Technically, the benchmark Feb momentum is still heading south based on after the market fail to rise above previous high level at 3,133 (double top on hourly chart). The long support trend line (white diagonal support trend line) will serve as major support area if anything should go wrong from here. If this event materialize, previous long term Bearish momentum are likely resume.

P/S: Malaysia Dec. 1-10 Palm Oil Exports 443,699 Tons, Down 5.1% -Intertek

Daily Pivot Point
R2= 3114
R1= 3098
S1= 3064
S2= 3046
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.