Thursday, April 5, 2012

Market Overview 6th April 2012

Friday, 6th April 2012. The FBM KLCI moved lower for the second session consecutively as most investors failed to find a supportive hints to hold their positions ahead of coming weekend. Other news to follow.

"-U.S. stocks on Thursday closed with weekly losses as investors weighed Europe's return to the headlines against positive weekly claims data ahead of Friday's nonfarm payrolls report for March. "All the reasons that provoked the rally are still there, but Spain not being able to sell its debt is a lot more serious than Greece not selling its debt," said Adrian Day, president of Adrian Day Asset Management in Annapolis, Md. Down 1.2% from last Friday's close, the Dow Jones Industrial Average DJIA -0.11% fell 14.61 points, or 0.1%, to 13,060.10. The S&P 500 Index SPX -0.06% lost nearly 1 point, or less than 0.1%, to 1,398.08, leaving it off 0.7% for the week. The Nasdaq CompositeCOMP +0.40% rose 12.41 points, or 0.4%, to 3,080.50, with the index posting a 0.4% loss for the week."

"-Chinese banks tumbled in Hong Kong on Thursday, providing an extra weight for a region already pressured by signs of more debt trouble in Europe and U.S. stock losses. Hong Kong investors returning from a one-day holiday pushed the Hang Seng Index HK:HSI -0.95%  down 1%.
The drop contrasted sharply with action for the Shanghai Composite Index CN:000001 +1.74% , trading for the first time this week, which moved off early losses to rally 1.7%, with some reports pegging support from a move to more than double the quota for foreign investment to $80 billion. Japan’s Nikkei Stock Average JP:100000018 -0.53%  lost another 0.5%, after clocking up its worst one-day fall for the year on Wednesday when the index moved back below the key 10,000 level for the first time in almost a month.
Australia’s S&P/ASX 200 index AU:XJO -0.33%  fell 0.3%, while South Korea’s Kospi KR:0100 +0.50%  rose 0.5%."

"- Crude prices rose on Thursday, rebounding from the previous session’s selloff as investors did not want to spend the long weekend without some oil futures in their portfolios. Oil for May delivery CLK2 +1.75%  advanced $1.84, or 1.8%, to settle at $103.31 a barrel on the New York Mercantile Exchange. "


"- May Soybeans finished up 14 1/2 at 1434, 1/4 off the high and 19 1/4 up from the low. July Soybeans closed up 14 at 1437 3/4. This was 18 3/4 up from the low and equal to the high. May Soybean Oil finished up 0.62 at 56.64, 0.04 off the high and 0.82 up from the low. May soybeans opened higher today and almost managed a fresh upside breakout on the charts. Some bears might suggest that the market has forged a quasi triple top but in the short term the technical condition of the market might take a back seat to the fundamentals. Not surprisingly the soy complex continues to recover nicely from yesterday's sell off, as the classic fundamental outlook is strong in the wake of last week's bullish acreage and grain stocks reports. The market clearly got a boost from better than expected export sales in beans and meal this morning and with weekly export sales for soybeans today coming in at 406,900 metric tonnes for the current marketing year and at 706,000 for the next marketing year the sales today were a big assist to the bull camp. In fact, a total export sale of 1,112,900 is a really strong number that was well above trader expectations and that could make next Tuesday's report even more important. Cumulative soybean sales stand at 91.4% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 91.8%. Sales of 134,000 metric tonnes are needed each week to reach the USDA forecast. "

FKLI- Impending Major Correction. 

 Stock index and index futures dipped for the second time consecutively since previous Wednesday as more investors are cashing out their positions ahead of public holiday in U.S today. The FBM KLCI lose about 5.83 points to 1,593.44 while April contract shed about 1.50 points to 1,590, the high and low for the day were 1,598.50~1,586. Sellers suddenly took control in late afternoon session when the April contract fell swiftly after it hit 1,598.50 level. Market is now walking towards the edge of a cliff as we might be looking at the early formation of major correction. Although this is not the first sight we saw lower high in hourly chart, things could get ugly if the index futures breach below 1,580 level. As what I have mentioned on previous post this could be a early hint for the market to correct further from rising wedge chart pattern. And most of the correction happen from a rising wedge is expected to be devastated. Technically, the big red candle formed on hourly chart shown above when the index attempt to recover to 1,598.50 level signifies that Sellers quickly regain control and push the index down easily. In other words, further market correction is imminent as these two sessions retracements are solely control by Bears. For today, support is likely located around 1,579 while resistance is pegged at 1,597.

Daily Pivot Point
R2=1604
R1= 1597
S1= 1584
S2= 1579

 FCPO- Ranging And Pending Break Out On Either Side.

CPO futures have done what most market will behave when most of the investors are puzzled of what to expect next or pending some news to be announce. Whether the market does not know where to go next, traders must not confuse about the overall direction of the market which is still uptrend. What is happening right now is some congesting period where there is no successive new high in this uptrend and less retracement at the same time. In other words, market is not swinging much at the moment, so watch out when you are Buying at the high and Selling at the low. For conservative traders, maybe they would only enter the market when the price does breach either one of these range while for those short term traders this ranging period could be a gold mine. Traders that have vast experience trading on ranging market is basically go Long on immediate support area and go Short on immediate resistance area which shown on the white horizontal trend line shown above. These are low risk trading windows as ranging traders only risk a small stop loss to reap a bigger potential profit and they could quickly turned their positions if the market does breach either of these range.  The trading range or immediate support and resistance I am referring to were 3,530 and 3,578 respectively.

Daily Pivot Point
R2=3587
R1= 3572
S1= 3537
S2= 3517
 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.

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