Market Overview 23rd Feb 2012

 Thursday, 23rd Feb. The FBM KLCI closed lower for the first time this week despite positive close on regional market while weaker performance in U.S futures equity index during Asia trading session.

"- U.S. stocks on Wednesday retreated after a three-session winning run, with equities taking a break from an advance that sent the S&P 500 Index up 8% this year. The Dow Jones Industrial Average DJIA -0.21%  fell 27.02 points, or 0.2%, to 12,938.67, its first down day in four. It’s still up nearly 6% for the year. The S&P 500 Index SPX -0.33%  fell 4.55 points, or 0.3%, to 1,357.66, with financials falling hardest and energy rising the most among its 10 major sectors. The Nasdaq Composite Index COMP -0.52%  declined 15.40 points, or 0.5%, to 2,933.17, extending losses to a third day. It’s up nearly 13% this year, gains that have brought it to late 2000 levels."

"-Most Asian markets ended higher on Wednesday, with Japanese stocks catching a tailwind from the yen’s weakness while mainland Chinese shares gained on hopes for a relaxation in policy toward the property sector. The Nikkei Stock Average JP:NIK +0.97%  rebounded from a wobbly start to finish 1% higher at 9,554 in Tokyo, as the U.S. dollar extended its recent gains against the yen to lift Japanese exporters. China’s Shanghai Composite Index CN:000001 +0.93%  rose 0.9% to 2,403.59, Hong Kong’s Hang Seng Index HK:HSI +0.33%  gained 0.3% to 21,549.28 and Taiwan’s Taiex added 1% to 8,001.68. Elsewhere, South Korea’s Kospi KR:0100 +0.22%  inched up 0.2% to 2,028.65, while Australia’s S&P/ASX 200 index AU:XJO +0.04%  ended fractionally higher at 4,293.10."

'-Crude-oil futures inched higher Wednesday, supported by persistent fears of supply disruption and pessimism about the global oil supply outlook. Crude oil for April delivery CLJ2 -0.38% , the new front-month contract, gained 3 cents to settle at $106.28 a barrel on the New York Mercantile Exchange. The close extended oil’s gains for a fifth session and marked the highest settlement since May 4. Gasoline, heating oil, and Brent crude also settled at multimonth highs."

"-US soybean futures end higher, managing to rebound from early losses as late gains in corn and wheat drag soybeans higher. Spread unwinding was featured throughout the day, with traders taking profits of long soybean/short corn and wheat contracts keeping pressure from soybeans for most of the day, analysts say. Traders are reducing some risk ahead of Thursday's USDA Outlook Forum, where it will release their first projections for the 2012-13 marketing year. After the spread trading ran its course, a strong technical picture and solid export demand allowed soybeans to bounce with a late rally in corn and wheat, analysts add. March CBOT soybeans ended up 1 1/4c at $12.72 1/4/bushel. Soy product futures bounce, garnering strength from a late session recovery in soybeans. Soyoil led the advances in the products, supported not only by soybeans, but solid demand and general price strength in crude oil futures, analysts say. CBOT March soyoil ended up 0.16c at 54.22c/pound, and March soymeal ended up $1.10 to $331.30/short ton."

 FKLI- Lets See How Bad This Retracement Could Get.

Some folks out there may not like about the title above that point out "how bad this retracement could get," but this is what the minority traders are focusing on, finding the next turning point. Market will move with momentum pause and then turn (most of the time) but sometime it does not abide to that, sometime market go crazy and reverse suddenly and whipsawed most of the traders who thought it was turning that way. Point is, market is a place where everyone involve, trader who want to Long or Short, traders who is desperate to exit or enter the market and also traders who is driven by emotion rather than discipline. Yes, market is a place that can make you crazy but peoples love it because it give satisfaction for being right and frustration when they got it wrong, it is the best drama you can ever watch. Back to the index futures, the Feb contract dip about 11 points to 1,557 yesterday as Bulls might be exhausting from previous rally. No doubt, this group of Bulls need some breather but that does not mean current positive momentum is over, it just simply diminished marginally. Technically, yesterday lower closing value on index futures was merely a healthy correction judging on marginal decrease on cash composite. Conclusively, there is no major concern for Bearish reversal but keep an eye on regional and other major equity index as their weakness are likely going to cap FKLI recovery for the moment. For today, support is located around 1,548 while resistance is pegged at 1,572.

Daily Pivot Point
R2= 1572
R1= 1564
S1= 1552
S2= 1548

 FCPO- Swift Profit Taking On Afternoon Session.

CPO futures ended lower yesterday as most traders prefer to book profit ahead of major resistance area around 3,300 level. Market does find the 3,300 level to be a psychological resistance at the moment when the benchmark May suddenly starting to retreat immediately right after it reached 3,294, the high for yesterday trading session. Soya oil futures was also retreating right after it hit major resistance level around $54 cents per pound, the actively traded month for Soya oil dipped about 0.34 cents to 53.72 cents per pound during Asia trading session, 5.48PM +8GMT. Technically, as mentioned on previous post market is still moving in the positive momentum with some retracement along the way. Retracement or correction is crucial in any positive trend as it is needed to gauge how aggressive Sellers can overturn Buyers into majority Sellers when the price keep dropping without support. If there is no lower high and lower low form (at least on hourly chart), we are likely to expect the positive momentum is still intact. Nonetheless, yesterday aggressive profit taking that brought the market down to 3,249 from 3,294 is something worth notice. Even though the benchmark May closed down RM18 to 3,250, it is still early to tell whether the Bulls have abandon the market. For today, support  is located around 3,234 followed by 3,219 while resistance is pegged at 3,279.

Daily Pivot Point
R2= 3309
R1= 3279
S1= 3234
S2= 3219
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.