Tuesday, June 12, 2012

Market Overview 14th June 2012

Wednesday, 14th June 2012. Malaysia stock index retreated as investors are doubtful about the detail of Spain's bailout plan, forcing most of the regional index to give back its previous gain. Other news to follow.

"-U.S. stocks fell Wednesday with investors on guard ahead of Greek elections Sunday and after Egan-Jones Ratings Co. downgraded its sovereign rating on Spain further into junk. The Dow Jones Industrial Average DJIA -0.62%   fell 77.42 points, or 0.6%, to 12,496.38. The S&P 500 Index SPX -0.70%   lost 9.30 points, or 0.7%, to 1,314.88, with consumer discretionary hardest hit among its 10 major sectors.The Nasdaq Composite COMP -0.86%  shed 24.46 points, or 0.9%, to 2,818.61.

"- Asian stock markets rose Wednesday, as investors weighed the chances of global policy action with worries about developments in Europe in the run-up to this weekend’s election in Greece.

Japan’s Nikkei Stock Average JP:100000018 -0.65%  rose 0.6%, the Shanghai Composite Index CN:000001 +1.27%  edged up 1.3%, and Hong Kong’s Hang Seng Index HK:HSI +0.82% gained 0.8%. South Korea’s Kospi KR:SEU -0.14%  rose 0.3%, while Australia’s S&P/ASX 200 indexAU:XJO -0.71%  edged down 0.2%."
"-July Soybeans finished down 28 1/2 at 1406 1/2, 31 off the high and 1 3/4 up from the low. November Soybeans closed down 17 at 1320. This was 10 up from the low and 19 off the high. July Soymeal closed down 12 at 421.0. This was 0.7 up from the low and 11.5 off the high. July Soybean Oil finished down 0.6 at 49.12, 0.94 off the high and 0.05 up from the low. July soybeans were trading near 29 cents lower on the session late in the day and close to the early lows. November closed about 10 cents higher than the early lows but still moderately lower on the day. The continued weather trend of potentially wetter weather into late June plus fund selling seemed to be the feature of the day. Talk of improving weather outlook for the next few weeks and talk of increased concerns for the global economy seemed to be the primary negative forces today which sparked profit-taking selling from fund traders and speculators. Talk that China annual growth pace may dip below 7% for the second quarter was seen as a negative force as well. Talk of hefty rain totals in the western Corn belt (1-3 inches) next week and some rain in the east (1/4 to 3/4 inch) in the forecast plus a lack of heat in the extended models helped to pressure. Ideas that the market is a bit overbought after pushing to the highest level since May 17th and some talk that meal demand could ease with better corn supply ahead helped to pressure with meal the leader on the downside today. For the weekly export sales report for tomorrow morning, traders see soybean sales near 550,000 tonnes. Late weakness in the stock market, a jump in bonds and weak action in energy markets added to the negative tone."

FKLI- Hold it, Not So Fast. 

Local stock index and index futures have to retreated accordingly to regional index correction as investors were wary about the ability on Spain's to provide huge financial aid without raising their country debt. This feat was deem almost impossible as Spain does not have any sufficient reserve to do so and in order to provide such financial aid, they will have to borrow money. Market sentiment was also slammed by the political uncertainties over Greece election that will happen this weekend. Now, not only we have an uncertainties market, good news that published today can be contradict the next day. Fortunately, traders can still look at technical perspective to make their call in the market. The recovery progress we have seen so far has been stretched up to 1,592 level from 1,518 level and it took longer than it fell from the same level. The question here is what is the indication for the next market direction based from chart. My best guess would be, upside potential will be limited to its previous Monday high for now but market is susceptible for correction judging from the Bearish divergence shown on MACD indicators. What is special here is, the MACD has topped out not once but twice when the market reached new high. This signifies that the market is exhausted to recover further for the moment and some correction is expected this week. For today, support is located around 1,565.50 while resistance is pegged at 1,579.50.

Daily Pivot Point
R2= 1579.50
R1= 1577
S1= 1570
S2= 1565.50

FCPO- Travelling In The Range

CPO futures turn into negative territory when the benchmark Aug closed RM24 lower to 2,965 amid recent Sell-off on commodities market, including Soy oil. With sudden weakness on broader commodities prices, CPO is going to have a tough times deciding its short term direction at the moment. The most actively traded Soy oil losses about 0.15 cents to 49.88 cents per pound during Asia trading session yesterday (7.10PM +8GMT), it was far lower when it open at early morning session. Technically, as mentioned on previous Monday post, the benchmark Aug is likely travelling within these range 3,040~2,920. While most of the conservative traders will only take action when there is any break out on either side of the range, most of us can still made some intraday profit from the short term fluctuation within these range. Long and medium term outlook on palm oil futures remain Bearish judging on multiple lower highs and lower lows candle formation and no sign of recovery yet. For today, support is located around 2,933 while resistance is pegged at 3,000.

P/S: CPO futures is poised to open gap down today judging on overnight Sell-off occur on Soy oil. The most active traded Soy oil was down 0.11 cents further to 49.04 cents per pound this morning, 9.27am +8GMT. Support is now shifted to 2,900 level while resistance is pegged at 2,948, previous closing value. 

Daily Pivot Point
R2= 3001
R1= 2983
S1= 2949
S2= 2933
 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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