Wednesday, May 16, 2012

Market Overview 17th May 2012

Thursday, 17th May 2012. Stock index went down massively amid escalating concern over Greece separation from European Union if their financial crisis cannot be contain any more. Other news to follow.

"- U.S. stocks retreated Wednesday as anxiety over Greece's troubles derailed enthusiasm that came with upbeat economic reports on U.S. industrial output and housing. Down for a 10th out of the last 11 sessions, the Dow industrials fell 33.45 points, or 0.3%, to 12,598.55, its lowest close since January. The S&P 500 Index SPX -0.44% declined 5.86 points, or 0.4%, to 1,324.80. The Nasdaq CompositeCOMP -0.68% shed 19.72 points, or 0.7%, to 2,874.04. "

"-Asian stocks tumbled in a broad-based sell-off Wednesday as investors reacted to news that Greece’s political impasse would force new elections in the country by dumping equities, with Hong Kong and South Korean shares taking the biggest hit. The Greek news overcame relatively positive U.S. economic data to send the Dow Jones Industrial Average DJIA -0.50%  to near a four-month low overnight, offering a negative lead for the Asia markets. Hong Kong’s Hang Seng IndexHK:HSI -3.19% was among the region’s worst performers Wednesday, plunging 3.2%, with Sullivan citing the Hong Kong market’s relatively high liquidity as making it easy to sell out of. The drop marked the index’s worst percentage decline since Nov. 10, when it sank 5.2%. Also suffering a loss in excess of 3%, South Korea’s Kospi KR:SEU -3.08%  fell 3.1%. Australia’s S&P/ASX 200 AU:XJO -2.36%  wasn’t far behind with a 2.4% drop, as a sharp fall in commodity prices sent major mining names lower. Japan’s Nikkei Stock Average JP:100000018 -1.12%  dropped 1.1%, China’s Shanghai Composite Index CN:000001 -1.21%  lost 1.2%, Taiwan’s Taiex XX:Y9999 -2.18%  gave up 2.2% and India’s Sensex IN:1 -1.60%  was down 1.9% in afternoon trading."

"-July Soybeans finished up 9 at 1422, 1 off the high and 35 3/4 up from the low. November Soybeans closed down 2 3/4 at 1302 1/4. This was 20 up from the low and 7 3/4 off the high. July Soybean Oil finished down 1.04 at 50.43, 1.09 off the high and 0.38 up from the low. July soybeans opened 10 cents lower on the day session and closed 9 cents higher on the day. A surge higher in wheat and strong gains in old crop corn helped turn the market from negative to positive. The market pushed lower early due to the sharp break in the China stock market and fears of continued economic issues in the eurozone due to Greek politics and this sparked a continued long liquidation selling trend early. However, a turn more positive in outside market forces plus a strong rally in the other grains helped to support higher trade on the day. Bull spreads were also active and November soybeans rallied 20 cents from the overnight lows but still closed slightly lower on the day. The surge in meal helped to pressure the soybean oil market and the sharp break of 3.9% in Malaysia palm oil added to the bearish tone early. The China National Grains and Oils Information Centre sees China soybean production down 7% this year to 13 million tonnes. The group sees 2011/12 imports of soybeans near 58 million tonnes as compared with the USDA estimate of 56 million tonnes. New crop exports are pegged at 60 million vs. USDA at 61 mmt. For the weekly export sales report, traders see sales near 1.2 million tonnes as compared with 1.827 million last week."

FKLI- Its Weak Alright

Global indices were traded significantly lower yesterday as investors were worried about the economy slowed down on major Asia country and U.S as well. Not only market were hammered by weak U.S stock market performance due to bad economy data and weak financial earning results from banking sector, the European debt crisis will dragged down almost all hope of market recovery in the near future. At close, the FBM KLCI went down about 25.03 points or 1.60% to 1,536.04 while index futures for May contract dipped about 25.50 points to 1,524 level, both index closed at least three months low. Technically, there is no recovery sign so far and the market is bound to fall further today even though it has fell more than 3.8% this week. Major lower high and lower low have formed on the  daily chart, strengthening current Bearish trend to continue its direction. For today, support is located around 1,506 while resistance is pegged at 1,540 level.

Daily Pivot Point
R2= 1556
R1= 1540
 S2= 1506

FCPO- Recovery Lights Dimmed Out. 

Bears are dancing again yesterday when the benchmark Aug dipped about RM124 or 3.86% to 3,085, this level was at least three months low. Bulls do not stand any chance yesterday when the palm oil futures quickly resume its direction from recovering at the morning session and then dipped on the afternoon. It was a short live recovery on previous Tuesday and market vicious dropped so far are deem as oversold level. But based on that reason alone, it was not a valid reason as well for the market to recover soon. Most of the weakness and panicked sell-off are likely came from external factors such as record weak commodities prices due to economy downturn concern, Greece financial crisis and the strengthening of Dollar recently. So far there is no sign for the market to recover even on smaller time frame chart and most of the direction for today will be based on how overnight Soya oil performance is going to be. Market is expected to track closely Soya oil price action again. Pivot point for support is located around 2,947 while resistance is pegged at 3,190.

Daily Pivot Point
R2= 3295
R1= 3190
 S2= 2947

 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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