Market Overview 30th Jan 2012

Monday,  30th Jan 2012. The FBM KLCI retreated slightly lower on previous Friday despite some promising gains made on Asia indices. Other news to follow.

"- U.S. stocks on Friday finished mostly lower, but a late surge in financial shares helped the S&P 500 preserve a fourth week of gains after the White House said it would expand a foreclosure-prevention program and hope grew for a Greek debt-deal. Up 3.6% for the month to date, the Dow Jones Industrial Average DJIA -0.58%  lost 74.17 points, or 0.6%, to end at 12,660.46, down 0.5% for its first weekly loss in four. Up 4.7% for the year so far, the S&P 500 Index SPX -0.16%  shifted briefly higher and ended the day down 2.1 points, or 0.2%, at 1,316.33, up 0.1% from the week-ago close. Up 1.1% for the week, the Nasdaq Composite Index COMP +0.40%  added 11.27 points, or 0.4%, at 2,816.55, with the index up 8.1% for the month and year so far."

"- Most Asian markets climbed on Friday to improve their weekly gains, with the resource sector leading in Australia as dovish indications for U.S. interest rates pulled in buyers as trading resumed after a holiday. Hong Kong stocks rose for a sixth straight trading day on the back of banking and telecommunication shares, while Japanese equities were weighed down by weak earnings reports from Nintendo Co. and NEC Corp. The Nikkei Stock Average JP:100000018 -0.09%  slipped 0.1% to 8,841.22 in Tokyo, while Hong Kong’s Hang Seng Index HK:HSI +0.31% added 0.3% to 20,501.67 and South Korea’s Kospi KR:0100 +0.39% climbed 0.4% to 1,964.83. Australia’s S&P/ASX 200 index AU:XJO +0.40%  advanced 0.4% to 4,288.40 as investors caught up with gains in global markets after the Federal Reserve signaled Wednesday the benchmark U.S. interest rate will likely remain at ultra-low levels until 2014."

"-US soy futures end lower on easing South America supply concerns. The market pulled back after recent strong gains amid talk that South America soy-crop damage could be limited, although analysts say there seemed to be little conviction in the downside move. Soy futures fell while corn gained as traders try to gauge potential US crop acreage this spring. Gulf export basis has been strong recently, but traders say that sales have remained lackluster. CBOT March soybeans fell 3 3/4c to $12.19/bushel.  March soymeal dropped $1.40 to $322.20/short ton and March soyoil was off 0.35c at 51.59c/pound.

 FKLI- Sideways Movement Re-affirmed.

The FBM KLCI ended the week with pending direction on the top as investors maintain a wait and see approach before taking more positions in the equity market. More commitment and endless meeting to address the European zone debt crisis but it is all just a political rhetoric so far. No prudent action has been carry out so, maybe they would only interfere when the crisis gone out of hand. What ever it is, we are trading in the most sophisticated condition in the market so far. It never been easy to make a living in this market, but things will be easier if you have proper knowledge and this could be the site to start. Alright, the index future for Jan is coming to an end in just two sessions. What we can see so far is stubborn market "consolidation" at the recovery process. Why I would say this is a consolidation phase because (in my opinion) there is no reversal sign yet even if you look at the daily chart and smaller time frame chart. On my previous post mentioned before, market will only reverse (downwards) when it break below the weekly support trend line (green horizontal line) shown on hourly. For today, support is locate around 1,519 while resistance is pegged at 1,532 level.

Daily Pivot Point
R2= 1532
R1= 1527.50
S1= 1519
S2= 1515

 FCPO- Trending Lower With Vulnerable Support Trend Line.

Palm oil futures is facing some difficulties to resume its preceding uptrend previous as market is more susceptible to correct further due to weaker than expected demand.  On Thursday, cargo surveyors Intertek Agri Services said Jan. 1-25 exports fell 17% from the previous month to 981,275 tons, while surveyor SGS (Malaysia) Bhd. put exports at 947,401, down 20%. Further more, most investors are not expecting much improvement for the full month report this coming 31st Jan, Tuesday. Once again export figures are not helping much as stock levels remain at record high at the moment. For this week, we are expecting the benchmark Apr to fall further and things could get worse if it breach below the 3,120 level, as it is the long term support trend (white diagonal line) shown on hourly chart. Whether you like or not, reversal signal is bound to happen soon as the support trend line looks vulnerable from here. Last Friday, Sellers regain control aggressively and push the prices down swiftly in the morning session. Since then palm oil futures has been hovering within below 3.135 level throughout the entire trading session. The condition is worsen as the 34 period EMA also show lower high and lower low formation on the hourly chart shown above. Both fundamental and technical outlook are now pointing down, in other words Bears are likely take charge this week. For today, support is located around 3,111 while resistance is pegged at 3,146 level.

Daily Pivot Point
R2=3157
R1=3146
S1=3123
S2=3111

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.