Market Overview 18th Jan 2012

Wednesday, 18th Jan. The FBM KLCI recover right after previous Monday retracement due to U.S S&P downgrade on various European sovereign bond rating, but now market is bouncing off from that news quickly. Other news to follow.

'-U.S. stocks trimmed gains Tuesday as investors turned cautious on financial-sector earnings ahead in the wake of mixed results from Citigroup Inc. and Wells Fargo & Co. Scaling back from a 151-point jump, the Dow Jones Industrial Average DJIA +0.48%  advanced 60.01 points, or 0.5%, to 12,482.07. The S&P 500 Index SPX +0.36%  climbed 4.58 points, or 0.4%, to 1,293.67 with energy rising the most among its 10 major sectors. The Nasdaq Composite COMP +0.64%   added 17.41 points, or 0.6%, to 2,728.08."

'-Asian markets jumped on Tuesday, with commodity-linked stocks particularly upbeat after Chinese economic expansion beat estimates in the fourth quarter, belying fears of a sharper slowdown in growth. Mainland Chinese stocks were the best performers after dropping in the last four trading days. The Shanghai Composite CN:000001 +4.18% soaring 4.2% to 2,298.38 and the Shenzhen Composite spiked 5.1% to 860.25. Their performance, combined with an advance for European stocks after a successful French debt auction Monday, also inspired gains in other regional markets. Hong Kong’s Hang Seng Index HK:HSI +3.24% gained 3.2% to 19,627.75, Japan’s Nikkei Stock Average JP:NIK +1.05%  climbed 1.1% to 8,466.40 and Australia’s S&P/ASX 200 index AU:XJO +1.65% added 1.7% to 4,215.60. South Korea’s Kospi KR:0100 +1.80%  rose 1.8% to 1,892.74 and Taiwan’s Taiex XX:Y9999 +1.65%  added 1.7% to 7,221.08."

"-Crude-oil futures rallied Tuesday after China's fourth-quarter gross domestic product in higher than expected. Crude for February delivery CL2G +0.44% added $2.01, or 2%, to end at $100.71 a barrel on the New York Mercantile Exchange, back to above $100 for the first time since Wednesday."

FKLI- Recover After Approaching Support Trend Line

Stock index took off and recovered most of the losses happen during previous Monday with most of the Asia regional index closed positive as well. At close, the FBM KLCI rose about 10.30 points to 1,519.36 level while index futures manage to ended 12.50 points higher to 1,522.50, closing just one point below the high. It is a good sign for further recovery as index futures return to trade about 3 points premium against the cash composite. Technically, this move was generally expected when market tend to consolidate on the high. Which mean, market have to retrace and give way for more healthy correction as there was inadequate Buyers or fresh Buyers to push the market above the major resistance area around 1,533 level previously. Apart from that, another higher lows were created yesterday when the index futures recovered about 12.50 points, marking stronger ground for the market to rally. Nonetheless, it is vital for us to watch whether there will be enough optimism to push the index higher above previous high/ resistance above 1,533 level. We could likely see a genuine break out if the index manage to surpasses the resistance level above 1,533, which could took us close to the next new weekly resistance level around 1,450 level. For today, support is located around 1,514.50 while resistance is pegged around 1,531.50~1,533 area.

Daily Pivot Point
R2= 1531.5
R1= 1527
S1= 1514.5
S2= 1506.5


FCPO- Soya Oil Futures Lending Some Support For Palm Oil Futures Recovery. 

CPO futures rebound extensively after previous correction due to active supplies and stocks level spook most the traders to cover their Long holding. But things are slightly different yesterday, the benchmark Apr rose about RM38 to 3,164, closing 9 points below from the high at 3,173. With my early assessment that mentioned palm oil is likely hovering lower due to record high stocks levels and break down from previous congesting market last week, the extensive recovery yesterday was somewhat unexpected. Maybe this recovery is just some puppet show temporary to squeeze most of the Short holders or maybe most market participants wish to Buy something cheaper or bargain hunt and dump it big time before the market will be shut for CNY holidays. All of that is just my assumption and even I wished I could use that on making my trading decisions, I WOULD NOT AT ANY CIRCUMSTANCES USE THAT ASSUMPTION AT ALL !! This is due to, trading in Futures market or any market at all, requires highest degree of critical thinking, knowledge and money management.  It has to be done objectively and not subjectively. This is to minimize second guessing and doubts created by your own perception. In another term, I agree with the terms "cut your losses short, let your profit run." Easier said than done, but that is the term you need to remember and engrave it in your mind because that is the "action" that will change the outcome of your trading result, permanently. Technically, the benchmark Apr has rebound substantially from the third diagonal support trend line (3rd white line), firmly suggesting that market is controlled by eager Buyers or Bulls yesterday. If the benchmark Apr could recover above 3,200 level, we are likely going to see promising recovery above previous week high at 3,248 level. In other words, upside momentum should return by that time. For today, support is located at 3,141 while immediate resistance is pegged at 3,180 followed by 3,196~3,200.

Daily Pivot Point
R2=3196
R1= 3180
S1= 3141
S2= 3118

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.