Market Overview 17th Jan 2012

Tuesday, 17th Jan 2012.  Stock index and index futures finally move away from previous tight trading range yesterday, at least to the downside due to U.S market weakness recently. Other news to follow.

"-The pan-European Stoxx 600 index XX:SXXP +0.78% gained 0.8% to end at 251.12 after spending most of the session swinging between small gains and losses. U.S. markets are closed Monday for Martin Luther King Jr. Day. Ratings company Standard & Poor’s downgraded the credit ratings of nine euro-zone nations — including France, Austria, Italy and Spain — late Friday after the close of European markets. France, which was stripped of its prized triple-A credit rating, sold Treasury bills on Monday, with borrowing costs declining from levels seen a week ago."

"-Asian markets were beaten down Monday, with mainland Chinese stocks falling for a fourth-straight session, as a string of euro-zone downgrades from Standard & Poor’s and stalled debt talks in Greece thrust Europe’s crisis back into the spotlight. Japan’s Nikkei Stock Average JP:NIK -1.43%  fell 1.4% to 8,378.36, Australia’s S&P/ASX 200 index AU:XJO -1.16%  dropped 1.2% to 4,147.20 and South Korea’s Kospi KR:0100 -0.87% declined 0.9% to 1,859.27. China’s Shanghai Composite CN:000001 -1.71%  shed 1.7% to 2,206.19, Hong Kong’s Hang Seng Index HK:HSI -1.00%  lost 1% to 19,012.20 and Taiwan’s Taiex XX:Y9999 -1.09% shed 1.1% to 7,103.62, with President Ma Ying-jeou’s election victory unable to dent the Europe-inspired gloom."

"-Oil prices climbed Monday as investors considered possible disruptions to supply in Iran and Nigeria. The crude futures contract for February delivery CL2G +0.97%  added 86 cents, or 0.9%, to $99.56 in electronic trade on the New York Mercantile Exchange. Regular floor trading will resume on Tuesday, with U.S. markets closed for the Martin Luther King Jr. holiday on Monday."

"- U.S. CME are closed Monday for Martin Luther King Jr."

FKLI- Retrace As Expected

The FBM KLCI has retraced substantially yesterday due to mounting concern on European debt crisis and recent downgrade on European credit rating by S&P. The stock index start off the third week by closing lower about 14 points to 1,509.06, the first noticeable retracement after it hovering within sideways range for few sessions last week. Most investors are taking their money off from the table yesterday when Long covering activities took over throughout the entire trading session. The market did not attempt to recover as Selling pressure are immense throughout the trading session. Index futures for Jan contract slide about 16 points or 1.05% to 1,510 level yesterday, off 4.50 points from the low. Technically, the overall outlook for index futures remain positive even though the spot month contract retrace more than 1% in one session after it congested for a week previously. If the previous low should act as current daily support area, market is poised to rebound today. But if anything should go wrong, index futures is likely going down further if there is a lower low form, or in other words, break below from the daily support area shown on green horizontal line above.

Daily Pivot Point
R2= 1525
R1= 1517
S1= 1503
S2= 1497


 FCPO- Bearish Momentum Extended And Likely Continue

CPO futures extending its Bearish momentum yesterday when the benchmark Apr continue to retrace about RM22 to 3,126 level, off 27 points from the low at 3,099. Palm oil sentiment is badly under siege by the re-surface growing of record high stocks for year 2011. Palm oil stocks that stood over two millions tons is something negative that most traders would want to remember at the moment, adding more downside risk for this commodities to fall this week. The projected demand or export data also did not help much yesterday as both cargo surveyors estimated palm oil exports drop 11% for 1-15th Jan 2012 vs Dec 2011. Technically, the benchmark Apr downward momentum is likely continue even though it attempt to fill most of the gap from 3,099 to previous Friday closing value at 3,151. Based on the hourly chart, we do not see any sign of market recovering yet as there was no successive higher low formation yet so far. In another words, only the extended weakness after the previous break down from congestion area are visible currently.  For today, support is likely located around 3,084 while resistance is pegged at 3,156.


Daily Pivot Point
R2= 3156
R1= 3141
S1= 3105
S2= 3084
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.