Monday, June 11, 2012

Market Overview 12th June 2012

Tuesday, 12th June 2012. The FBM KLCI return to trade in positive zone after a better than expected performance from U.S stock index and regional market as well. Other news to follow.

"- U.S. stocks slid sharply Monday, with the Dow Jones Industrial Average closing lower for the first session in five, as investors fretted coming events, including elections in Greece. After a 96-point rise early in the session, the Dow Jones Industrial AverageDJIA -1.14%  slid 142.97 points, or 1.1%, at 12,411.23. The S&P 500 Index SPX -1.26%  declined 16.73 points, or 1.3%, at 1,308.93, with technology shares leading the losses. Telecom was the best performing of its 10 sectors. The Nasdaq Composite Index COMP -1.70%  slipped 48.69 points, or 1.7%, at 2,809.73."

"Asian stocks jumped on Thursday, extending gains made in the previous session, as investors hoped for U.S. and European monetary easing to counter growing economic woes.

Japan’s Nikkei Stock Average JP:100000018 +1.96%  rose 1%, South Korean investors returned from a one-day break to push the Kospi KR:SEU +2.56%  up 2.7%, while Australia’s S&P/ASX 200 index AU:XJO +1.31%  climbed 1.4%. The Australian and South Korean markets both returned to positive territory for the year with Thursday’s move, along with Taiwan’s Taiex index. In China, Hong Kong’s Hang Seng Index HK:HSI +2.44%  jumped 1.4%, and the Shanghai Composite index CN:000001 +1.07%  advanced 0.2%. The moves in Asia came after U.S. stocks surged to their best one-day performance so far this year after signs that the European Central Bank is open to an imminent rate cut and on hopes for fresh easing from the Federal Reserve. U.S. easing hope was given another boost after the Fed’s No. 2 official said late Wednesday that the door remained open for more easing should conditions require such a move."


"-July Soybeans finished down 1 1/2 at 1424 3/4, 20 3/4 off the high and 6 3/4 up from the low. November Soybeans closed down 1 1/4 at 1331 1/4. This was 10 3/4 up from the low and 18 off the high. July Soymeal closed down 3.3 at 426.5. This was 2.1 up from the low and 7.5 off the high. July Soybean Oil finished up 0.28 at 49.74, 0.64 off the high and 0.86 up from the low. July soybeans closed lower on the day after first moving to the highest level since May 17th. Overnight, the market pushed up as high as 19 1/4 higher on the day but a less threatening weather forecast plus a major shift from bullish to bearish for outside market forces helped to pressure. The forecast for next week is not as hot and a little wetter for the western Corn Belt which could keep some areas in the East needing rain. The system moving across Iowa overnight and across Illinois and Indiana and south but rain amounts seem less than expected in the northern parts of these states but a bit better than expected south. Areas that miss out on the moisture in the next two days (1/4 to 3/4 inches of about 75% coverage) could be under significant stress into next week. Temperatures are still expected to be above normal next week; just not as hot as the models indicated on Friday. The outside markets turned sour with weakness in metal and energy markets and a move sharply lower in the stock market and this helped to pressure the market into the mid-day and into the close as the stock market pushed to new lows for the day late in the grain session. Weekly export inspections came in at 14.2 million bushels which was right on expectations. Inspections need to average 10.9 million bushels per week to reach the USDA projection for the season. Traders look for a 2-3% decline in crops rated good to excellent for this afternoon's update."
FKLI- Floating At The Top, For Now. 


Local and regional stock index are reaping the positive performance from U.S market that surged recently. Most of the Asia market rallies in the wake of U.S market recovery recently due to monetary policy easing and Spain 100 Billion bank bail-out plan. With more and more news aimed to counter and resolve European Union debt crisis, we are expecting positive sentiment on boosting the global economy outlook as well when the U.S Federal Reserve plan on cutting rates. Conclusively, external news does sound conducive for the market to rally but if on technical perspective, there is something fishy going beyond the rock. Although the market has rallied promising since last month, recent price action on FKLI showed that market is still hesitating to rally after it hit multi month resistance. Buyers do not want to commit too much as there was no follow thru Buying activities right after the market open gap up certain resistance level. Traders just want to cover their Long positions when they still can. But still, overall price outlook on index futures remain positive with the formation on higher lows and higher highs when the market open slightly above 1,590 level yesterday. As a results, this recovery is still good to go with no sign of major Bearish reversal sign yet. For today, support is located around 1,575 while resistance is pegged at 1,588.

Daily Pivot Point
R2=1596
R1=1588
S1=1575
S2=1571

FCPO- Its Going To Be A Rough Ride Up Hill. 


CPO futures manage to recover yesterday amid good progress made on the European debt crisis this week. Commodities market also cheered after the Spain bank's bail out plan that will ease the financial burden on European Union. Crude oil manage to jumped about 2% and Soy oil rose about 0.75 cents to 50.20 cents per pound during Asia afternoon trading session yesterday (5.30PM +8GMT) after the announcement made on last Saturday. It is a good view looking at the external news and the commitment on European officials to resolve their debt crisis thus boosting economy confidence in the Europe but palm oil market is still susceptible to fall due to weak technical outlook. Despite good news and the promising price recovery on broader commodities, palm oil prices are still trapped in the Bearish price action. There is no sign for any major recovery yet judging on the lower highs candle on the benchmark Aug formed on hourly chart yesterday. What happen in the morning and afternoon session was something identical to FKLI market, the market open gap up and begin retracing as there was no follow thru Buying activities. It get worse on the afternoon session as the benchmark Aug continue to fall due to Soy oil futures seems running out steam for further recovery, retracing back to 50.10 cents per pound on 5.43PM +8GMT. Conclusively, palm oil price is likely to hover in sideways mode within the range of 3,040 ~ 2,920 at the moment.

Daily Pivot Point
R2=3111
R1=3050
S1=2905
S2=2821
 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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