Monday, May 14, 2012

Market Overview 15th May 2012

Tuesday 15th May 2012. Stock index and commodities market went sell-off yesterday amid grave concern over economy growth and demand. Other news to follow.

"- U.S. stocks closed at more than three-month lows Monday, and the Dow industrials slid for the eighth session in nine, as investors worried about Greece’s potential exit from the euro zone.

“The market appears to be discounting a Greek exit from the euro,” said Linda Duessel, senior equity strategist at Federated Investors Inc. The Dow Jones Industrial Average DJIA -0.98%  ended down 125.25 points, or 1%, at 12,695.35, its lowest close since Jan. 31, after Greek politicians over the weekend failed to reach an agreement on a unity government, raising the likelihood of new elections and the risk of halted international aid payments. The S&P 500 Index SPX -1.11%  slid 19.64 points, or 1.5%, to 1,338.35, its lowest close since Feb. 2. Financials led the slide among its 10 sectors, all of which ended lower. The Nasdaq Composite Index COMP -1.06%  declined 31.24 points, or 1.1%, to 2,902.58, its lowest close since Feb. 6."

"-Asian shares traded mostly higher in a choppy session Monday, as concerns about Europe’s debt woes weighed on sentiment, while China’s weekend move to loosen monetary policy added some support. Hong Kong’s Hang Seng Index HK:HSI -1.15%  rose 0.3% after opening higher but then trading lower for much of the morning, while the Shanghai Composite IndexCN:000001 -0.60%  edged up 0.2%. Japan’s Nikkei Stock Average JP:100000018 +0.23%  gained 0.3%, also recovering some of an early advance. Australia’s S&P/ASX 200 index AU:XJO +0.28%  rose 0.2%, while South Korea’s Kospi KR:SEU -0.18%  remained lower with a 0.2% loss. Hong Kong stocks skidded 5.3% last week, Japanese stocks lost more than 4.5%, Korean stocks fell 3.6%, and Australian stocks dropped 2.5% for their worst weekly fall so far this year."

"-July Soybeans finished down 19 at 1387, 19 3/4 off the high and 11 up from the low.  July Soybean Oil finished down 0.94 at 51.3, 1.13 off the high and 0.33 up from the low. July soybeans closed moderately lower on the session and pushed to the lowest level since March 30th but the low was early in the day and the market closed well up from these early lows. Talk that there will be more planted acres than the March 30th USDA intentions report plus ideas that the winter wheat crop will be harvested earlier than normal which could benefit double-cropped soybeans helped to pressure. Long liquidation selling from fund traders appears to be the key bearish force today. The market saw bearish news from outside markets, good weather and a lack of new export news as reasons for the continued long liquidation selling trend early today. A sharp break in the stock market, a jump in the US dollar and weakness in metal and energy markets helped to pressure early. European financial concerns and a lack of a reaction to news of further easing in China added to the negative tone early today. Traders see planting progress near 42% complete for this afternoon's weekly update and a dry forecast for the week suggests a very active planting week ahead. The NOPA crush report this morning was considered bearish on demand as the April crush came in at just 131.7 million bushels which was about 3 million below trade expectations. Oil stocks were higher than expected at 2.385 billion pounds. Weekly export inspections came in at 20.3 million bushels which was well above trade expectations and compares with 11.9 million bushels per week to reach the USDA projection."

FKL- Turned Down And Bearish

It is an official scene when you read this write up when the stock index and index futures dipped to weekly low yesterday. Stock index slide about 9.24 points to 1,575.08 while index futures tumbled about 13.50 points to 1,562 level. Both indexes were facing massive Selling pressure which might due to negative development over the European debt crisis and China's latest move to loosen monetary policy highlighted concerns its economy is faltering, prompting investors to further trim their exposure to risk. Technically, the previous low area which meant to serve as major support level around 1,560 is vulnerable to break soon. In other words, market is susceptible to fall further due to yesterday massive Selling pressure that wipe off all gains made last month when the market peaked at 1,600 level. Selling activities will be magnified if the index futures breach below the previous low level at 1,560. If this event materialize, most upcoming support level will be futile to hold the market from falling. Traders could go Short if the market recover to 1,578 today as market have turned Bearish.  

Daily Pivot Point
R2= 1594
R1= 1578
S1= 1553
S2= 1544

FCPO- Down Trending Formed

Commodities market went another round of Sell-off yesterday when data from the Commodity Futures Trading Commission showed hedge funds and other money managers slashed their long positions on commodities by 20 percent, or nearly $18 billion, as prices fell to four-month lows last week, with oil accounting for the bulk of the drop. U.S. crude prices slipped 0.7 percent to $95.42, weighed down by China's slowing economy, which clouded the demand outlook, and Saudi Arabia's call for higher oil stock levels. Brent crude eased 0.3 percent to $111.93 a barrel. Market have to dropped probably to write off this massive missing of fund. Yesterday, the benchmark July tumbled about 3.82% or RM125 to 3,150, the low was 3,145 before the closing bell. Volume for the benchmark July almost doubled yesterday when the palm oil futures dipped. This was also the highest dropped happen on single session this year. Gains made from previous 2 months were quickly erased in less than 4 weeks. Up to date, market has corrected about 475 points or 13% from the 3,625 peaked four weeks ago. Statically, medium term market trend is bound to change when there is more than 10% opposite changes on current preceding direction. Technically, market is still susceptible for more correction as there is no sign for any market recovery yet. There will be no prominent support area during a down trend. 

Daily Pivot Point
R2= 3276
R1= 3213
S1= 3116
S2= 3082
 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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