Sunday, May 13, 2012

Market overview 14th May 2012

Monday 14th May 2012. The stock index ended lower amid regional weakness after a shock trading losses from JP Morgan that value at 2 billion. Other news to follow.

"- U.S. stocks mostly fell Friday to a second weekly decline as a rise in consumer sentiment failed to outweigh J.P. Morgan Chase & Co.’s $2 billion trading loss. Down 1.7% for the week, the Dow Jones Industrial Average DJIA -0.27%  fell 34.44 points, or 0.3%, at 12,820.60, with J.P. Morgan  JPM -9.28%  its heaviest weight, off 9.3%.  The S&P 500 Index SPX -0.34%  shed 4.60 points, or 0.3%, at 1,353.39, with financials getting hit the hardest among its 10 sectors and the index tallying a weekly slide of 1.2%. The Nasdaq Composite Index COMP +0.0061%  managed a fractional gain to close at 2,933.82, off 0.8% decline from last Friday’s close."

"-South Korean and Hong Kong stocks tumbled Friday as many Asian markets ended the week with deep losses after a surprise loss from J.P. Morgan Chase & Co. bruised sentiment, with Japanese shares declining after disappointing results from Sony Corp.
Taking losses into a seventh straight session, Hong Kong’s Hang Seng IndexHK:HSI -1.30%  lost 1.3% to 19,964.63, while South Korea’s Kospi KR:SEU -1.43%  finished 1.4% lower at 1,917.13 and Japan’s Nikkei Stock Average JP:100000018 -0.63%  fell 0.6% to 8,953.31.
China’s Shanghai Composite CN:000001 -0.63%  gave up 0.6% to 2,394.98, Australia’s S&P/ASX 200 index AU:XJO -0.24%  slipped 0.2% to 4,285.10 and Taiwan’s TaiexXX:Y9999 -1.10%  shed 1.1% to 7,401.37."

"-July Soybeans finished down 49 1/4 at 1406, 55 3/4 off the high and 3 1/2 up from the low. November Soybeans closed down 37 3/4 at 1321 1/4. This was 2 1/2 up from the low and 45 1/4 off the high.  July Soybean Oil finished down 1.26 at 52.24, 1.34 off the high and 0.15 up from the low. July soybeans closed 49 1/4 cents lower on the session and closed down 72 1/4 cents for the week. This occurred during a week of a bullish USDA report with funds holding a near record high net long position. Aggressive long liquidation selling from funds emerged due to a "risk off" attitude from investors and from a lack of follow-through buying after the initial reaction to the report. The market fell as much as $1.10 in just 8 trading sessions. A bearish tone to outside market forces and general banking concerns helped to pressure commodity markets overnight and this tone spread to grains early this morning. Even with the strong recovery in the stock market and less pressure on energy markets, the soybean market failed to see much of a bounce. Fund trader long liquidation selling appears to be the dominate force for the market and July futures pushed to a new low for the day late in the session. A general sense that the USDA report did not bring in any "new" bullish factors for the longer-term outlook plus an excellent weather outlook for the US planting season helped to pressure. Meal and oil were also lower into the mid-session with July soybean oil pushing down to the lowest level since February 6th. Weakness in Malaysia palm overnight and weak economic news out of China added to the negative tone. "

FKLI- Tracking Regional Losses

The FBM KLCI ended slightly Lower on previous Friday as investors grew wary about the economy development on the  U.S. Not only that, recent U.S stock index negative performance was due to losses made by JP Morgan Chase. Banking sectors will be badly hit on U.S as the trading losses on JP Morgan may deem colossal to write off. Back to local market, the index futures is still traveling on sideways mode at the moment. The viable range we can use far would be 1,570 and 1,588. Market is susceptible for deep correction if the May contract breach below the support area around 1,570 from this range. For today, pivot level for support is located around  1,565 while resistance is pegged 1,587.

Daily Pivot Point
R2= 1587
R1= 1581
S1= 1570

FCPO- Break Down From The Cage. 

CPO futures ended down to 5 weeks low on previous Friday amid weak fundamental. Palm oil Demand was substantially lower for the coming month of May and things might be worsen as production is likely increase due to dry weather. Moreover, weakness on Soya oil and other broad commodities prices are likely to pressure palm oil price outlook. Last Friday, the benchmark July breach below the Support area of the cage / range and price just dipped frantically. Technically, price action on July contract have become weaker and weaker due to the succession of lower highs plus Lower lows formation on daily chart. If these formations continue to formed, we might looking at long term down trend market. Strategies that can be use when the market is hovering on Bearish mode will be Shorting on pivot resistance area or resistance trend line. For today, pivot resistance area will be located around 3.315 while support is located at 3,250.

Daily Pivot Point
R2= 3355
R1= 3315
S1= 3250
 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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