Thursday, June 14, 2012

Market Overview 15th June 2012

Friday, 15th June 2012. The FBM KLCI slide again amid huge market uncertainties over Euro debt crisis that might get out of control. Other news to follow.

"- U.S. stocks jumped Thursday after media reports signaled possible central-bank action and economic data added to the case for further moves by the Federal Reserve to bolster growth. The Dow Jones Industrial AverageDJIA +1.24%  rose 155.53 points, or 1.2%, to 12,651.91. The S&P 500 Index SPX +1.08%   climbed 14.22 points, or 1.1%, to 1,329.10, with telecommunications and energy leading gains among its 10 sectors. The Nasdaq Composite Index COMP +0.63%  advanced 17.72 points, or 0.6%, to 2,836.33."

"-Asian shares staged a broad retreat on Thursday, with Italy due to auction more debt, Spain under the threat of more downgrades, and weekend elections in Greece looming.

In China, Hong Kong’s Hang Seng Index HK:HSI -1.15%  fell 0.6% and the Shanghai Composite index CN:000001 -0.99%  lost 0.3% Japan’s Nikkei Stock Average JP:100000018 -0.22%  declined 0.3%, and Australia’s S&P/ASX 200 index AU:XJO -0.53%  lost 0.5%, while South Korea’s Kospi KR:SEU +0.65% slipped 0.1%. The losses for Asian stocks followed a retreat in the U.S. markets Wednesday, with investors parsing weaker retail-sales data and increasingly nervous ahead of elections in Greece on Sunday that may lead to the country exiting the European currency union."


"-July Soybeans finished down 21 at 1387 1/4, 28 1/2 off the high and 3 1/4 up from the low. November Soybeans closed down 11 3/4 at 1308. This was 5 3/4 up from the low and 16 3/4 off the high. July Soymeal closed down 4.1 at 417.9. This was 2.3 up from the low and 8.0 off the high. July Soybean Oil finished down 1.04 at 48.06, 1.23 off the high and 0.08 up from the low. July soybeans were trading near 21 cents lower on the day late in the session with significant weakness and new lows posted late in the day. A strong recovery in outside market forces plus a surge higher in corn and wheat helped to support the market bounce well off of the overnight lows. However, even very strong short-term demand news failed to support follow-through buying and the market experienced a steady flow of fund trader selling for much of the day. Higher than expected weekly export sales news and higher than expected monthly crush news failed to provide much support after a minor bounce. The NOPA crush for May came in at 138.3 million bushels which is up about 3 million from trade expectations. In addition, weekly export sales came in at 425,100 tonnes for the current marketing year and 580,000 for the next marketing year for a total of 1.005 million tonnes which was about twice expectations. Cumulative old crop sales stand at 101.3% of the USDA forecast for the marketing year versus a 5 year average of 98.9% for this time of the year. Meal sales came in at 116,800 metric tonnes for the current marketing year and 24,500 for the next marketing year for a total of 141,300. Sales of 83,000 metric tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 6,800 metric tonnes for the current marketing year and 500 for the next marketing year for a total of 7,300. Continued talk of fund trader liquidation of July bean/July corn spreads added to the bearish tone today."
FKLI- Some Weakness In The Top 

Stock index and index futures went down as investors were wary about the development over European debt that might turn out to be a full blown crisis if the problems are not address properly. Market sentiment is very fragile and we could expect a big ripple to occur if there is anything happen in the Euro zone and U.S market. U.S market is currently haunted by series of weak economy data such as manufacturing indexes, growing unemployment, weaker demand as announced by diminishing retails sales and so on. In other words, anything could go wrong from here at any time and there is a lot of room for the market to fall from here as well. Technically, index futures is showing some sign of possible correction judging on the lower high candle formation shown on hourly chart above. And this impending weakness also accompanied with MACD oscillator that is heading lower as well. If the June contract manage to breach below the second pivot support level around 1,560, we are looking at higher likelyhood for the market to end its recovery and heading south.

Daily Pivot Point
R2= 1578
R1=1573
S1= 1565
S2= 1561

FCPO- Break Down And Off It Go. 

It is not a strange to see a market continue go to the identical direction after it has a valid break out from a range. This incident happen on CPO futures yesterday as the benchmark Aug dipped about RM102 or 3.46% to 2,846, the day high and low was 2,915 and 2,838. For most of the traders who saw or expect this break down to occur, it was a worthwhile trade for them and for those who kept their Long position even after that kind of break down, they would not be far from ruin their account again. I heard traders alike kept asking me the same question over and over again, "can the market continue to fall / rise after it has Sell-off / Surge previously ?" Instead of telling them the answer, I usually ask them back, "do you see any sign of recover / retracement on this Sell-off / Surge ? "  So, if you are still wondering where is the market direction as per now, why don't ask the second question above, "did I see any sign of recovery yet from yesterday Sell-off ?"  If your answer is undoubtedly "NO," do not even think of doing anything if there is no Short set up for you to trade, you just have to wait for the next Short set up, period. Technically, the benchmark Aug continue to head south after it open gap down, breaching lower the support range located around 2,920. It was also breaking lower the weekly support level at 2,920 after the market gone into a range trading session for at least a week previously. With nothing to hold this market from falling further after it has breach below important support level, the only direction for the market to go was DOWN. Currently, the effort to locate prominent support level will be futile, but locating resistance level will deem as better things to do as traders could go Short if the price falter from the resistance level.


Daily Pivot Point
R2= 2943
R1=2894
S1= 2817
S2= 2789
 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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