Market Overview 27th Jan 2012

Friday, 27th Jan 2012. Stock index manage to closed slightly higher yesterday along with Hang Seng index but most of the indices ended the day lower. Other news to follow. 

"-U.S. stocks squandered early gains to end lower on Thursday, losing steam after the Commerce Department said new-home sales fell in December, in contrast to market expectations. The Dow Jones Industrial Average DJIA -0.18% declined 22.33 points, or 0.2%, to 12,734.63. The S&P 500 SPX -0.58% lost 7.63 points, or 0.6%, to 1,318.43. The Nasdaq Composite COMP -0.46% retreated 13.03 points, or 0.5%, to 2,805.28. "

 "- Hong Kong stocks jumped Thursday as investors returned from a long Lunar New Year-holiday to cheer the Federal Reserve’s projection of ultra-low interest rates through late 2014. The performance in other regional markets was less enthusiastic, however, with gains in South Korea tempered by weaker-than-expected economic growth data, while Japanese shares retreated from a near three-month high as investors locked in recent gains. Hong Kong’s Hang Seng Index HK:HSI +1.64%  ended 1.6% higher at 20,439.14, completing a five-session winning streak that began ahead of the holidays. Elsewhere, South Korea’s Kospi KR:0100 +0.25%  gained 0.3% to 1,957.18, while Japan’s Nikkei Stock Average JP:100000018 -0.41%  fell 0.4% to 8,849.47 after a mildly positive open. Mainland Chinese and Taiwanese markets remain closed this week for holidays, while markets in Sydney were shut for Australia Day."

"-Crude-oil futures inched higher Thursday, falling short of the $100-a-barrel mark as U.S. stocks turned negative, the dollar recovered some steam, and macroeconomic data was mixed. Crude futures for March delivery CL2H 0.00%  rose 30 cents, or 0.3%, to end at $99.70 a barrel on the New York Mercantile Exchange."

"-US soy futures end higher amid uncertainty about the South America crop and outside market support. Outside market strength, fueled by Wednesday's Fed announcement on low interest rates, supported prices, though that support waned later in the session. Soy held firm despite a slump in corn, as traders continue to eye South America's soy crop nervously. Trend-following buyers also supported soy as the market climbed past its weekly high to its highest level since Jan. 3. CBOT March soybeans end up 9 1/4c to $12.22 3/4 per bushel. March soymeal ends up $2.50 to $323.60 per short ton and March soyoil closes up 0.55c to 51.94 cents per pound."

 FKLI- Trapped Within The Range

The FBM KLCI edge up about 4.10 points to 1,523.86 yesterday which happen to close exactly at the high as well. Apparently, the leading index to gauge our economy activity indicate our economy is slowing down for few months ahead. This add up negative background on our equity market as we have impending Euro zone debt crisis plus economy slow down in most Asia emerging market. Technically, the index futures is spending most of its time traveling within the band shown on the hourly chart above. Currently, market is likely to stay at sideways judging on flat sloping EMA tunnel and MACD oscillator. It is likely to stay resilient around 1,525 level towards the end of this month unless there is any major overnight movement from U.S market. In another words, equity index is likely to track external headwinds not limited to positive momentum but on negative directions as well.. Market is still susceptible for minor correction if it could not break above previous Wednesday level at 1,536. For today, immediate support is located around 1,521.50 while resistance is pegged at 1,531.50.

Daily Pivot Point
R2= 1531.50
R1= 1528
S1= 1521.50
S2= 1518.50

 FCPO- Swift Correction Due To Lower Demand Concern

CPO futures ended lower about xxx to xxx yesterday as most market participants were spook by continues dropped in export figures announced. Both cargo surveyors (ITS and SGS) reported Malaysia palm oil 1-25th Jan 2011 vs Dec 2011 export dipped about 18% on average. It seems that more negative shock is coming if the palm oil export deteriorate further because price is going to be lower due to record high stocks level so far. Yesterday correction is deem overdone where traders with Long positions decided to just unload their exposure as soon as possible, probably right after they know about the weak export figures announced in the morning session Technically, palm oil futures is heading down based on the 34 EMA tunnel negative slope shown on hourly chart at the moment. It is unpleasant sight to watch the market fell yesterday as it could create a reversal sign for the market to correct further. Reason behind for this correction would be lower high formation that can be see on daily chart and other smaller time frame chart as well. Although it might not look that Bearish in medium term as the long support trend line is still intact (white diagonal line), yesterday session was fully controlled by Bears. Higher volume was also reported along with this correction. For today, support is located around 3,103~3,100 while resistance is pegged at 3,179.

Daily Pivot Point
R2= 3179
R1= 3155
S1= 3117
S2= 3103
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.