Wednesday, May 23, 2012

Market Overview 24th May 2012

Thursday 24th May 2012. The FBM KLCI resume its weakness yesterday as regional index dipped throughout the trading session due to global economy slow down. Other news to follow.

"- U.S. stocks turned mostly up Wednesday after another late-session comeback that came as investors looked for hopeful signals from Europe in dealing with a possible Greek departure from the euro. Recovering from a 191-point drop, the Dow Jones Industrial Average DJIA -0.05% ended down 6.66 points, or 0.1%, at 12,496.15.The S&P 500 Index SPX +0.17%  gained 2.23 points, or 0.2%, to 1,318.86, with natural-resource firms rising the most and utilities the worst performer of its 10 industry groups. The Nasdaq Composite Index COMP +0.39%  also turned around, rising 11.04 points, or 0.4%, to 2,850.12. For every two stocks declining, three gained on the New York Stock Exchange, where 863 million shares traded. Composite volume neared 4.1 billion. The U.S. dollar DXY +0.14%  and Treasury prices gained10_YEAR +0.29% , while gold GCM2 +0.70%  and oilCLN2 +0.62%  fell."

"- Asian markets slumped Wednesday as European concerns bruised sentiment, with stocks in Tokyo deepening losses as the yen strengthened after the Bank of Japan decided against further monetary easing measures. Japan’s Nikkei Stock Average JP:100000018 -1.98% , which began the day on a weak note after Fitch Ratings late on Tuesday downgraded its sovereign debt to A+ and issued a negative outlook, lost more ground after the BOJ decision. It ended 2% lower. Hong Kong’s Hang Seng Index HK:HSI -1.33%  shrank 1.3%, China’s Shanghai CompositeCN:000001 -0.42%  shed 0.4%, South Korea’s Kospi KR:SEU -1.10%  dropped 1.1%, Australia’s S&P/ASX 200 index AU:XJO -1.31%  fell 1.3% and Taiwan’s TaiexXX:Y9999 -1.75% declined 1.8%."


"-July Soybeans finished down 16 3/4 at 1365 1/2, 17 1/4 off the high and 14 1/2 up from the low. November Soybeans closed down 23 at 1259 1/4. This was 8 up from the low and 22 3/4 off the high.  July Soybean Oil finished down 1.44 at 49.02, 1.53 off the high and 0.47 up from the low. July soybeans pushed sharply lower on the session as talk of the hefty net long position of fund traders in soybeans and an aggressive long liquidation selling trend helped to pressure. Futures fell as much as 31 1/4 cents this morning as the outlook for some rains next week along with deteriorating economic views on the global economy helped to spark increased fund trader long liquidation selling. A jump in the US dollar, a sharp break in gold and energy markets and a collapse in equity markets helped to pressure. The market saw a near 15 cent recovery bounce off of the early lows into the mid-session as some strength in corn and only minor losses for meal helped to slow the aggressive selling from fund traders. Palm oil was down 2.9% overnight and is already at a significant discount to soybean oil on the world market so this helped drive soybean oil sharply lower today with July down to the lowest level since October of 2010. For weekly export sales in the morning, traders see soybean sales near 1.15 million tonnes."


FKLI- The Beginning Of A Fall 


Stock index is travelling on negative momentum since few weeks ago and things got bad when it break all major support level. There is no telling how low this correction can go but any investors can easily guess there are a lot of room for the market to fall further if the 1,500 level is breach. It is a long way down there and gravity will make everything drop faster, especially in the stock market and commodities market. Technically, the May contract is creating another lower highs shown on daily chart above. This is a significant indication for further market weakness before it make another lower lows again. Price that travelling below slower moving average would serve as another indication that market is hovering on down trend. Traders are advised to be cautious if they are still holding Long positions as follow up weakness after a fail recovery will be swift. For today, support is located around 1,522 while resistance is pegged at 1,535.

Daily Pivot Point
 R2=1541
 R1=1535
 S1= 1526
 S2= 1522

FCPO- No Support Area Yet. 

CPO futures open gapped down and continue to travel South after a shocking Sell-off on Soya oil and other broader based commodities. Everything is effected right now ranging from stock market to commodities prices. It does not matter what is the headlines or causes for the market to dropped as no one knows for sure nor they can control where is the direction for the market to go. In the market, history always repeated itself, this is noticeable from how fast the market came down after a long period of recovery. The benchmark Aug quickly resume its preceding down trend after a sudden Sell-off on Soya oil during Asia trading session yesterday. At close, the benchmark Aug dipped RM91 to 3,019, day low was 2,993. Soya oil dipped about 0.89 cents to 49.63 cents, travelling below 50 cents per pound for the first time this year. Get ready for another Sell-off soon as there is no sign for the market to recover yet. For today, support is located around 2,946 while resistance is pegged at 3,065.


Daily Pivot Point
 R2=3112
 R1=3065
 S1= 2982
 S2= 2946

 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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