Wednesday, May 30, 2012

Market Overview 31st May 2012

Thursday, 31st May 2012. The FBM KLCI extended rallies yesterday despite weaker performance from regional indices and U.S market as well. Other news to follow.

"- U.S. stocks retreated Wednesday, wiping out the prior session’s rally, as bond yields in Spain and Italy surged and polls out of Greece added to the uncertainty over whether it would remain in the euro zone. he Dow Jones Industrial AverageDJIA -1.28%  dropped 160.83 points, or 1.3%, to 12,419.86, with all but one of its 30 components in the red. On Tuesday, it had gained nearly 126 points in a broad surge fueled by hopes for Greece and more global stimulus. The S&P 500 Index SPX -1.43%  on Wednesday shed 19.10 points, or 1.4%, to end at 1,313.32, with energy and financial firms hardest hit among its 10 sectors. All sectors ended lower. The Nasdaq Composite Index COMP -1.17%  declined 33.63 points, or 1.2%, to 2,837.36."

"-Asia stock markets fell Wednesday to give up some of the strong gains from the previous session, as hopes for an aggressive stimulus spending in China faltered, and as more trouble in Spain posed fresh threats to the euro zone. Japan’s Nikkei Stock Average JP:100000018 -0.28%  dropped 0.8%, while South Korea’s Kospi KR:SEU -0.27%  and Australia’s S&P/ASX 200 index AU:XJO -0.49%  each lost 0.6%. In China, Hong Kong’s Hang Seng Index HK:HSI -1.92%  slumped 1.9%, and the Shanghai Composite CN:000001 -0.21%  shed 0.2%. Optimism about Chinese stimulus measures to power the economy took a hit after a state media report suggested the package will be relatively mild, compared to actions taken at the height of the global financial crisis, in late 2008. "

"-July Soybeans finished down 8 1/2 at 1378 1/4, 16 1/4 off the high and 14 up from the low. November Soybeans closed up 3 1/4 at 1296 3/4. This was 15 1/2 up from the low and 5 1/4 off the high. July Soymeal closed down 2.5 at 410.0. This was 5.3 up from the low and 5.0 off the high. July Soybean Oil finished down 0.45 at 49.72, 0.64 off the high and 0.32 up from the low. November soybeans spent much of the day lower on the session but saw late buying support on longer-term weather uncertainties to support the market late in the session. July soybeans saw a strong recovery off of the mid-session lows but still closed moderately lower on the day. Outside market forces were consider very negative and this helped to spark long liquidation selling in commodity markets; especially markets like soybeans where fund traders hold a hefty net long positions. European economic woes and a surge in the US dollar to the highest level since August 30th of 2010 has added to the "risk off" attitude. While traders see dry weather stress as an issue, talk of good rains this week in the Midwest and more rain for next week before a ridging pattern moves in has kept weather as a negative force. Confirmation that China is NOT planning another major stimulus program was also seen as a negative factor for the global economy. Weakness in the other grains and other commodity markets like crude oil and gold added to the negative tone. The weekly progress report showed a record fast planting pace with 89% of the crop planted compared to 76% last week and 48% last year."

FKLI- Massive Gained, Is The Bears Retreated  ?

Malaysia stock index need not require regional positive performance to surged now, those traders might got all the reasons they need to accumulate locally. Heavy Buying activities were also significant in the index futures as the derivative market manage to closed 6 points premium against cash composite for the second session straight. At closed, the FBM KLCI rose about 9.85 points to 1,575.17 while index futures for June contract manage to gained about 13 points to 1,581, settling just 2 points below the day high. Technically, we are looking at very strong rebound done in record time. This recovery might wipe off most of the Bearish cue mentioned two weeks ago. In other words, market could have turn back into Bullish mode if the stock index manage to hold above 1,500 for the next few weeks. For more promising sign of up trend, we will have to see how strong the market rebound again if there is any retracement or correction after this overbought reading. Today, pivot support is located around 1,553 while resistance is pegged at 1,588.

Daily Pivot Point
R2= 1596
R1= 1588
S1= 1567
S2= 1553

FCPO- Turning The Boat Back To South ?

CPO futures retrace amid Long covering after the market have recovered for the past three sessions since last Friday. Bulls might be taking some breather, giving way for the some technical correction but will easily give up their interest if the price fall lower than 3,100 level soon. Bulls life are hanging by threat as it is too easy for the Bears to win over if the Soya oil futures continue to closed below 50 cents. Technically, we are looking the first phase of weakness or market is resuming its preceding down trend, but all that can only be verified if there is any Sell-off from Soya oil futures tonight. If it does, be prepare to be Bearish again as there is no telling where is the prominent support as the benchmark Aug had breach below 3,000 level previous week. Else CPO futures is poised for further recovery if there is no major weakness on Soya oil futures tonight. For today,  since the Soya oil retraced about 0.45 cents to 49.72 cents per pound, palm oil futures is likely open lower and continue heading south. Pivot support is located around 3,071 while resistance is pegged at 3,145.

Daily Pivot Point
R2= 3179
R1= 3145
S1= 3091
S2= 3071
 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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