Market Overview 19th Jan 2012

Thursday. 19th Jan. The FBM KLCI closed slightly lower yesterday amid less fresh news to support further market recovery at the moment. Others news to follow.

"-U.S. stocks rose Wednesday, sending the S&P 500 Index to a close above 1,300 for the first time since July 28, on improved sentiment in housing and as Goldman Sachs Group Inc.’s earnings beat expectations. The Dow Jones Industrial Average DJIA +0.78%  rose 96.88 points, or 0.8%, to 12,578.95. The S&P 500 SPX +1.11%  added 14.37 points, or 1.1%, to 1,308.04,The Nasdaq Composite Index COMP +1.53%  climbed 41.63 points, or 1.5%, to 2,769.71."

 "-Japanese stocks led most Asian markets higher Wednesday as fears about the global economic outlook abated, while mainland Chinese stocks fell on concern Beijing was unlikely to ease its monetary policy aggressively. At the end of a choppy day’s trading, Japan’s Nikkei Stock Average JP:NIK +0.99% ended 1% higher at 8,550.58, Australia’s S&P/ASX 200 index AU:XJO +0.05%  gained 0.1% to 4,217.90, Hong Kong’s Hang Seng Index HK:HSI +0.30%  added 0.3% to 19,686.92 and Taiwan’s Taiex XX:Y9999 +0.17%  rose 0.2% to 7,233.69. South Korea’s Kospi KR:0100 -0.02%  closed little changed at 1,892.39. China’s Shanghai Composite Index CN:000001 -1.39%  lost 1.4% to 2,266.38 a day after it surged 4.2% in the wake of better-than-expected fourth-quarter economic data."

"-Crude-oil futures ended lower Wednesday after the White House rejected a Canadian company’s proposal to build a pipeline from the U.S.-Canada border to the Gulf of Mexico. Crude for February delivery CL2G +0.84%  declined 12 cents, or 0.1%, to end at $100.59 a barrel in electronic trading on the New York Mercantile Exchange. It traded as low as $99.84 a barrel earlier."

"-US soybean futures are little changed, managing to recover from early declines on traders unwinding corn/soy spreads. South American weather remains the dominant issue for grain markets. With rains alleviating some near term crop threats in Argentina, traders reduced risk exposure in corn while remaining concerned about soy crops, said AgResource's Dan Basse. The impact of weather on soybean yields is greater at this point than corn, and a shift back to hot, dry conditions could cut soy yields as they move through their critical development phase, Basse adds. CBOT March soybeans ended unchanged at $11.83 1/2/bushel, while March corn dropped nearly 2%. Soy-product futures end mixed as soyoil slid on spillover weakness from crude and slowing demand from the biodiesel industry. But soymeal bounced from early weakness in unison with soybeans. Traders bought meal against oil on spreads amid optimism for increased livestock-feed demand moving forward, analysts say. CBOT March soyoil dropped 0.37c to 50.40c/pound while March soymeal ended up $1.50 at $312/short ton.

FKLI- Travel Within The Range. 

Stock index closed slightly lower yesterday along with other Asia regional indices which ended in mixed tone after recovering extensively. The FBM KLCI closed 1.98 points lower to 1,517.38 while index futures for Jan contract ended 5.50 points lower to 1,516.50, just off one point from the day low at 1,515.50. Both of the price action on stock index and index futures provide less clue where is the market are going to head next, but we prefer to think that it is going to travel within the previous weekly range shown on the hourly chart above. Technically, with MACD moving flat the spot month Jan contract is likely continue hovering within the range around 1,501~1,532 level based on the red ressitance trend line and the green support trend line. Market might track the U.S regional indices if there is any big movement occur overnight. For today, support is located around 1,508 while resistance is pegged at 1,527.

Daily Pivot Point
R2= 1527
R1= 1522
S1=  1513
S2= 1508

 FCPO- Tricky Direction

CPO futures is struggling to survive with bad fundamentals on supplies and record high inventory concern. The benchmark Apr has opened lower yesterday due to weaker overnight Soya oil futures performance which triggered strong urge to cover Long positions in morning session. But Fortunately, market manage to recover all of previous session losses by closing RM16 higher to 3,180. Although it is still early to tell for sure that palm oil futures could continue its previous preceding trend (upside) after previous Monday aggressive correction, we are looking at newly formed higher low and higher high formation on hourly chart as the benchmark Apr manage to surpasses above previous high around 3,178 level. But if (a very big IF) that Soya oil retrace substantially due to extensive production fear, palm oil futures is expected to hover in a sideways range before trending lower again (likely). In another words, Buyers are noticeably in control on yesterday late afternoon session, where the benchmark Apr swiftly recover to new high this week. Upside is likely revive when the market quickly recovered yesterday, and by looking at daily chart what we have witnessed for the past retracement happened two sessions ago were healthy corrections. What I can say from here is forget about the record high inventories or other bad sentiments because price itself will lead the way and it is recovering now. For today, support level is located around 3,209 while resistance is pegged at 3,150.

Daily Pivot Point
R2= 3209
R1= 3194
S1= 3150
S2= 3120

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.