Sunday, June 17, 2012

Market Overview 18th June 2012

Monday, 18th June 2012. The FBM KLCI made some gain ahead of Greece general election over the weekend along with other Asia stock index index on previous Friday. Other news to follow.

"- Investors, who recently have swapped their worst fears about Greece for optimism that global central banks could come to the rescue, are likely to remain at the whim of European events in the next week. Sentiment could swing either way — toward relief, for example, if Greek voters choose candidates seen more committed to keeping the cash-strapped country in the euro zone. U.S. stocks on Friday ended higher for the second straight week, the first such streak in more than a month. The Dow Jones Industrial Average DJIA +0.91% ended up 1.7%, helped by triple-digit point gains Thursday and Friday. The S&P 500 Index SPX +1.03% rose 1.3% for the week. The Nasdaq Composite Index COMP +1.29% lagged, ending 0.5% higher."

"-Hong Kong stocks lead most Asian markets higher on Friday amid hopes that global central banks may join hands to coordinate a policy response after this weekend’s crucial election in Greece. In Asia, the Hang Seng IndexHK:HSI +2.26%  jumped 2.3%, extending gains in late trading after European stock markets opened strongly, China’s Shanghai Composite indexCN:000001 +0.47%  climbed 0.5%, Australia’s S&P/ASX 200 indexAU:XJO +0.37%  rose 0.4% and Taiwan’s Taiex XX:Y9999 +1.14%  climbed 1.1%. Japan’s Nikkei Stock AverageJP:100000018 +0.0050%  ended little changed from the previous day’s close, while South Korea’s Kospi KR:SEU -0.71% dropped 0.7%. Most regional markets also finished the week on a positive note. Hong Kong’s Hang Seng Index again put in a strong performance, ending the week with a 4% gain, while the Taiex rose 2.2%."


"-August Soybeans finished down 5 1/4 at 1358 1/2, 16 1/2 off the high and 7 up from the low. November Soybeans closed up 7 3/4 at 1316 1/2. This was 9 3/4 up from the low and 7 off the high. August Soymeal closed down 3.3 at 403.7. This was 0.7 up from the low and 7.6 off the high. August Soybean Oil finished up 0.62 at 48.8, 0.19 off the high and 0.85 up from the low. July soybeans were trading near 6 cents lower and November up 8 cents late in the session. Outside markets were mostly supportive but there are still significant concerns for outside market weakness on Monday. Some models are wet (one inch plus over Illinois and Indiana next week) while others remain drier and warmer than recent expectations but there seems to be a sense that rains could be fairly decent next week across the dry areas of the eastern Corn Belt. Some areas are in desperate need of rains as many fields in the east have seen little or no rain in the past week. On top of the US weather situation, the market remains nervous with the euro zone situation and talk of extremely high temperatures near 105 degrees for the Black Sea region and a hot and dry outlook for the northern China plains growing region. Other areas of China have been hit with flooding but this growing region continues to miss out on bulk of rains. Private exporters reported the following three transactions. China bought 262,000 tonnes of US soybeans for 2012/13 season. Unknown destination bought 120,000 tonnes of US soybeans for the 2011/12 season and China cancelled 147,000 tonnes of soybeans for the 2011/12 season. A prominent research firm revised their soybean planted acreage estimate up to 76 million acres as compared with 73.9 million by the USDA. Traders have been expecting a 1.5-2.0 million acre increase so the news was seen as a negative factor."

FKLI- Lets See How Strong This Recover Is


Stock index and index futures manage to clock some gains ahead of Greece election which will happen on this weekend. Investors will gauge what is the effect on the latest political development in Greece and hopefully they could improve the overall outlook on their political environment after this. Some mild fund accumulation activities on Genting Berhad help lifted up stock index as well. It seems that the index futures continue to defy the Bearish divergence occur on hourly chart shown above. There was no weakness accompany with this Bearish divergence as market kept recovering the next day. Technically, index futures is still susceptible for some minor correction before we could see any major recovery. This is due to the Bearish divergence forming on the hourly chart shown above. Although a Bearish divergence is not a solid indication for the market to correct, it is likely showing that market is climbing with lesser supportive force behind it. For today, support is likely located around 1,565.50 while resistance is pegged at 1,588.

Daily Pivot Point
R2= 1593.5
R1= 1588
S1= 1574
S2= 1565.5

FCPO- Closed Off The Low, Danger Still Presence. 

CPO futures closed slightly higher on previous Friday as some consolidation effect after a serious 3% dropped occur on previous Thursday due to Soya oil weakness. The benchmark Aug just manage to closed RM2 higher to 2,848 as the low the day was 2,839. Commodities market will have a high volatility trading week ahead with so many variables to consider such as the upcoming political outcome on Greece, European central bank action to tackle their debt trouble and U.S federal reserve on controlling their rates. Interest rates are very much the most important single indicator you can find, the ripple effect when it is changed will be exponential. When there is any change on interest rates, currency value will move massively and demand on certain commodities will also effected due to the exchange rates. Technically, the new benchmark Sept is still susceptible for further correction even after the market has dropped more than 3% on previous Thursday. There is still no sign of recovery judging from the hourly chart shown above as market has been dropping since the opening bell on previous Friday. Furthermore, there is not much supportive factor on fundamental side even though both independent palm oil cargo surveyors reported there were over 20% rise on palm oil export for the period of 1-15th June vs May 2012. For today, pivot support is located around 2,811 while resistance is pegged at 2,875.

Daily Pivot Point
R2= 2903
R1= 2875
S1= 2829
S2= 2811

 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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