Wednesday, December 14, 2011

Market Overview 15th Dec 2011

Thursday, 15th Dec. The FBM KLCI closed lower yesterday amid disappointment over the news of U.S federal Reserve that yet finalize any monetary measures to stimulate the economy. Other news to follow.

"-U.S. stocks on Wednesday closed lower for a third straight day as Wall Street worried about the toll of Europe’s debt struggles on the global economy, with investors also unloading gold and the euro. The Dow Jones Industrial Average DJIA -1.10%  fell 131.46 points, or 1.1%, to 11,823.48, with 23 of its 30 components on the decline. The S&P 500 Index SPX -1.14%  declined 13.91 points, or 1.1%, at 1,211.82, with energy falling the hardest and health-care lagging the least among 10 S&P industry groups, all of which closed lower. The Nasdaq Composite Index COMP -1.55%  shed 39.96 points, or 1.6%, at 2,539.31. The benchmark indexes have lost 3% to 4% this week."

 "-Most Asian markets fell Wednesday as belied hopes that the U.S. Federal Reserve would signal another round of asset purchases and concern about the fallout from European debt troubles kept buyers away. Many regional markets flirted with positive territory during the session after a string of recent declines, but they couldn’t hold on to the gains. Japan’s Nikkei Stock Average JP:NIK -0.39%  finished the day 0.4% lower at 8,519.13 and Australia’s S&P/ASX 200 AU:XJO -0.07%  dropped 0.1% to 4,190.50. China’s Shanghai Composite CN:000001 -0.89%  ended 0.9% lower at 2,228.53, racking up a fifth day of losses, while the Hang Seng Index HK:HSI -0.50% dropped 0.5% to 18,354.43"

"-Crude-oil futures closed below $95 a barrel Wednesday, with strength in U.S. dollar contributing to a more than 5% drop in prices, as comments from a group of major oil producers and broad losses in global stock markets raised concerns about prospects for oil demand. Crude-oil futures for January delivery CL2F +0.07%  dropped $5.19, or 5.2%, to close at $94.95 a barrel on the New York Mercantile Exchange after tapping a low of $94.21."

"-US soybean futures succumb to pressure Wednesday from a stronger dollar and broad weakness in commodities and equities, tumbling to a 14-month low. Worries about Europe's debt crisis and the global economy set the negative tone, traders say. The outside pressure nullified any support from worries about the South America crop, which is facing dry weather that, if it persists, could harm yields. Soybean prices, pressured throughout the fall by weak exports, fall to lowest level since Oct. 2010. CBOT Jan. soybeans end down 18 1/2c, to 1.7%, to $11 per bushel. March soyoil down 0.83c to 48.80 cents/lb, and March soymeal down $1.60 to $286.30."

 FKLI- Trapped Within The Rage With Downside Bias. 

Stock index depreciated slightly yesterday after some negative news over the U.S Federal Reserve decide not to intervene anything to their economy yet. Most Asian benchmark were closed lower yesterday which might due to Europe debt crisis concern that is still linger in the financial market. Nothing is too big to fall in this era, almost anything is possible in the financial market, especially the fall of the biggest financial union in the world, the "European Union." Investors are still cautious over the long term overview on equity market as most of the market in the world are slowing down, China and U.S are part of it. Bears are still out there and they are just waiting the right news to begin their selling spree. When that event materialize, market shall fall and support will not matter anymore. Technically, the index futures is likely hovering within these range, 1,450~1,470. More selling pressure is expected if the lower range @1,450 violated while upside is likely continue if the market should close above 1,470 level.

Daily Pivot Point
R2= 1473
R1= 1468
S1= 1458
S2= 1453

FCPO- Recover After Previous Oversold Condition

CPO futures recovered in line with Soya oil futures yesterday due to oversold condition occur on previous Monday this week. Palm oil futures is tracking closely Soya oil performance yesterday and most of the traders are taking advantage and Long the market as it is "cheap" and have more room to climb rather than fall further. Volatility is likely remain high as market can tumble and rebound swiftly the other day without any concrete reason at all. Fundamental data from MPOB were mixed up with palm oil production slid about 14.83%, stock declined about 1.5% and export fall about 9.76%. That was the figure and it does not gave much hint on palm oil market direction for the moment rather we prefer to use technical tools to guess it. Yesterday, the benchmark Feb closed RM50 higher to 3,052. Any market that would closed at the high / low of the day with increased volume and open interest could signifies continuous positive / negative momentum the next day, but in this case the scene is somehow neural. Some may argued that this may be a technical rebound as commodities market (edible commodities) are generally over supplied and prices are likely to remain Bearish in long term while the other part of the traders would think previous sell-off was just a temporary panic selling due to due to worries about the global economy and a higher forecast of global soybean inventories by the U.S. Department of Agriculture.Whatever the market headlines are, traders must protect always their equity by using stop loss order and trade conservatively.

Daily Pivot Point
R2= 3100
R1= 3076
S1= 3004
S2= 2956

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.

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