Market Overview 31st Jan 2012

 Tuesday, 31st Jan 2012. The FBM KLCI retreated substantially yesterday amid weakness across most of Asia indices due resurface Euro debt crisis concern. Other news to follow.

"-U.S. stocks closed with minor losses Monday as telecommunications and technology stocks advanced, offsetting concern that came with Portugal’s soaring borrowing costs. After a 131-point drop, the Dow Jones Industrial Average DJIA -0.05%  closed down 6.74 points, or less than 0.1%, to 12,653.72. The S&P 500 Index SPX -0.25%  declined 3.32 points, or 0.3%, to 1,313.01, with the financial sector hit the hardest after a report that Germany wanted Greece to relinquish control of its budget process in exchange for another rescue package.After falling 34 points, the Nasdaq Composite COMP -0.16%."

 "-Most Asian markets fell Monday as investors turned cautious ahead of a key summit of European leaders later in the day and as Chinese stocks were hit by disappointment over a lack of policy easing from Beijing. The drop on mainland Chinese bourses applied pressure on Hong Kong, where shares fell for the first time in seven trading days. Taiwanese stocks bucked the trend, rising sharply as the market there reopened after a long Lunar New Year holiday. The Hang Seng Index HK:HSI -1.67%  tumbled 1.7% to 20,160.41 in Hong Kong, while the Shanghai Composite Index CN:000001 -1.47% lost 1.5% to 2,285.04 as investors returned after last week’s Lunar New Year holiday. Elsewhere, Japan’s Nikkei Stock Average JP:100000018 -0.66% finished 0.5% to 8,793.05, South Korea’s Kospi KR:0100 -1.24%  fell 1.2% to 1,940.55 and Australia’s S&P/ASX 200 AU:XJO -0.37% dropped 0.4% to 4,272.70."

"- Crude-oil futures declined Monday as lingering concerns about the euro zone made investors call global oil demand into question and as the U.S. dollar traded higher. Crude for March delivery CL2H +0.49%  fell 78 cents, or 0.8%, to $98.78 a barrel on the New York Mercantile Exchange."

"-US soybean futures tumbled, driven lower by traders reducing weather premium from prices and broad-based selling across asset classes. Rains forecast to move through Argentina for the next week raise hope of improved crop yields, particularly with rains coming as crops move into their critical reproductive stage, analysts say. Strength in the US dollar amid renewed worries about EU debt produced general weakness in commodities, aiding the defensive theme as well. CBOT March soybeans ended down 33 3/4c or 2.8% to $11.85 1/4. Soy product futures end lower, plunging in unison with sharp declines in soybeans. Improved crop outlooks for South American soybeans and broader based selling across commodity markets combined to pin both soymeal and soyoil in negative territory, analysts say. CBOT March soymeal ended down $9.50 at $312.70/short ton, March soyoil dropped 1.34c to 50.25 cents/pound."

FKLI- When Market Moved And Sell-Off

Stock index dipped about 7.35 points to 1,513.55 yesterday amid weaker equity indices performance on Asia market and uncertainties on Euro debt crisis development. The newest Euro debt development was on the PSI (Private Sector Involvement) deal. It seems that Greek's private sector creditors would submit a new improved offer with an avg interest rate of 3.75%. EU finance ministers had been seeking a rate of no more than 3.5% and in the past private lenders said that they would not accept less than 4%. Whether the deal will help boost the market confidence, our index futures has begin sell-off yesterday after the market was hovering within the weekly range around 1,537 ~ 1,500 level. The Feb contract swiftly change to Selling mode when it dropped back to discount about 10 points against the cash composite. At close, the Feb contract slide about 24.50 points to 1,498.50, the low was 1,491.50. Technically, the initial assessment I can come up with is market fall too fast and some mild rebound is expected to happen today. Furthermore, yesterday swift correction is likely turn to be a quick adjustment after the market has been hovering within the range for two weeks. Nonetheless, market is poised to correct further if oversea market still weak for the coming session. For today, support for Feb contract is located around 1,485 while resistance is pegged at 1,517.

Daily Pivot Point
R2= 1537
R1= 1517
S1= 1485
S2= 1472

FCPO- Break Down With Further Impending Downside

CPO futures headed down yesterday as traders rushed to cover their Long positions due to weaker than expected Soya oil futures performance and slow demand this month. Most traders were spooked when the price open lower and hit below 3,120 level in the morning session, prompting immediate action for Long holders to start shedding their positions. Technically, the benchmark Apr has break down from the third support trend line (white diagonal line) shown on hourly chart above. Volume and open interest were accompanied on this fall, lower high and lower low were also followed as well, which mean this could be Bear market "confirmation" that might last for at least this week. 34 period EMA tunnel was also pointing downwards at four o'clock at the moment, and any moving average that pointing at four to five o'clock mean Bears is taking over. Game plan has changed now, traders should watch for resistance and take Short positions, usually around pivot resistance area or any major moving average number. For today, support is located around 3,048 while is pegged at 3,112 followed by 3,142.  

Daily Pivot Point
R2= 3142
R1= 3112
S1= 3065
S2= 3048
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.