Tuesday, May 15, 2012

Market Overview 16th May 2012

Wednesday, 16th May 2012. The FBM KLCI went down another round hitting multi months low yesterday as global concern on economy revival and bad negative sentiment on U.S banking sectors weight down market performance. Other new to follow.

"- U.S. stocks declined Tuesday, with the Dow industrials ending near a four-month low, as economic reports failed to deflect the latest breakdown in Greece’s attempts to form a coalition.

“Today we had some good economic numbers, but worries over in euro land” hit the single currency, said Peter Cardillo, chief economist at Rockwell Gobal Capital. The euro’s fall helped propel the dollar to a four-month high as investors sought the perceived safety of the American currency over riskier assets, including equities and commodities. Finishing lower for a ninth out of the last 10 sessions, the Dow Jones Industrial AverageDJIA -0.50%  shed 63.35 points, or 0.5%, to 12,632. The S&P 500 Index SPX -0.57%  fell 7.69 points, or 0.6%, to 1,330.66, ending below a key technical support, Cardillo said. The Nasdaq Composite IndexCOMP -0.30%  declined 8.82 points, or 0.3%, to 2,893.76.
"- Asia markets mostly fell on Tuesday, with investors fretting about the possibility of a Greek exit from the euro zone, although Hong Kong looked set to break its longest losing run in more than a year.Japan’s Nikkei Stock Average JP:100000018 -0.81%  dropped 0.8%, Australia’s S&P/ASX 200 index AU:XJO -0.71%  fell 0.7% and South Korea’s Kospi KR:SEU -0.77%  lost 0.5%. In China, the Shanghai Composite CN:000001 -0.25%  shed 0.8%, while Hong Kong’s Hang Seng Index HK:HSI +0.81%  gained 0.4%, rising after an eight-session losing streak."


"-July Soybeans finished up 26 at 1413, 2 3/4 off the high and 33 up from the low. November Soybeans closed up 10 1/4 at 1305. This was 14 1/2 up from the low and 7 1/4 off the high. July Soybean Oil finished up 0.17 at 51.47, 0.27 off the high and 0.6 up from the low. July soybeans closed sharply higher on the session and near the highs of the day. Rumors that China was still in the market for old crop soybeans helped tio spark the late buying. July meal led the whole complex higher late in the day closing $13.70 higher. The market setback after the strong opening to trade slightly lower on the day before a move back up to moderately higher on the day into the mid-session. Outside market forces are mixed and this helped to spark some of the volatile trade. Talk of a six year low in rapeseed production in Europe helped to provide some support but a lack of new export news on the daily wire and a fast start to the planting season helped to limit the advance. The soybean crop is 46% planted from 24% as the 5-year average. With a dry weather outlook for the next week, many traders see a surge in plantings into late May. The excellent weather outlook for planting helped to limit the buying in new crop November soybeans."

FKLI- This Is It, Impending Down Trend.


If I have to say when is the next major correction could happen this year, this might be the right occasion to say so. With tremendous Selling pressure occur since previous Friday, this was 28 points dropped from 1,578 to yesterday 1,549.50 with less than three trading sessions. The FBM KLCI and index futures have dropped to multi months low yesterday. At close, the cash composite surrendered about 14.01 points to 1,561.07 points while index futures for May contract dipped about 12.50 points to 1,549.50 level, setting just two points above the low. Market have been traded on discount about 5 to 11 points on average, signifying weak market. Technically, medium term direction has turned from recovering phase to major correctional phase yesterday when there was a lower low formed. Chart on May contract has breached below most of previous low that serve as major support level. Conclusively, overall market condition have reverse to negative with escalating concern over European financial crisis plus political instability and Bearish outlook on U.S stock market due to massive liquidation of capital market risk by hedge fund institution.

Daily Pivot Point
R2=1570
 R1=1560
 S1=1543
 S2= 1536

FCPO- Some Light For Recovery. 


Palm oil futures inches up yesterday after it suffer from massive Sell-off since last week due shocking Long liquidation by hedge fund reported by U.S Commodity Futures Trading Commission. Most of the traders got panicked and frantically try to reduce their risk off from the market by cashing out their Long position before it is too late. That explain why CPO futures had a massive correction recently, market got panicked as well when Soya bean and Soya oil kept on dropping without limitation. Technically, recent recovery may deem as temporary technical rebound which likely due to Short covering. In another perspective, if this suppose to be a medium term down trending direction, we will get to gauge how strong will this recovery for this week. If the market falter after reaching certain major resistance trend line, we are likely going to see another lower high form and strengthen further down trending direction. For today, support is located around 3,177 while resistance is pegged at 3,278.

Daily Pivot Point
R2=3278
 R1=3252
 S1=3177
 S2=3128
 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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