Market Overview 25th June 2012

Monday, 25th June 2012. Stock index manage to squeeze some gain out of previous Friday closed and ended the week higher despite some weakness on other Asia stock index that retrace due to overnight U.S stock market performance on previous Thursday. Other news to follow.

"- U.S. stocks closed higher Friday, lifting the Nasdaq Composite Index back into the black for the week, after the European Central Bank said it would take further steps to ease loan collateral for banks. The Dow Jones Industrial Average DJIA +0.53%  rose 67.21 points, or 0.5%, to 12,640.78. It lost 1% for the week, after posting gains for the past two. Down 0.6% on the week, the S&P 500 Index SPX +0.72%  rose 9.51 points, or 0.7%, to 1,335.02 for the session, with technology stocks leading the gains that included all 10 of its industry groups. Up 0.7% for the week, the Nasdaq COMP +1.17%  advanced 33.33 points, or 1.2%, to 2,892.42.


"-Asian markets skidded Friday as signs of a slowing world economy and a ratings downgrade of several major banks pushed investors away from risk assets before the weekend. South Korea’s Kospi KR:SEU -2.21%  was the region’s worst performer of the day, dropping 2.2% as wary investors sold stocks across sectors. Japan’s Nikkei Stock AverageJP:100000018 -0.29% slipped 0.3%, Taiwan’s Taiex XX:Y9999 -0.78%  gave up 0.8% and Australia’s S&P/ASX 200 indexAU:XJO -0.96% shed 1%. Hong Kong’s Hang Seng IndexHK:HSI -1.40%  dropped 1.4%, extending losses after European markets opened sharply on the downside. Mainland Chinese markets were closed for a holiday. The performance brought a mixed week to an end for the regional indexes, with Japan’s Nikkei the best performer among the five benchmarks mentioned above, with a 2.7% advance. The Hang Seng Index dropped 1.2%, while the Shanghai Composite had ended Thursday’s session with a weekly loss of 2%."


"- Crude-oil futures gained Friday, recovering some ground following sharp losses in the previous sessions, but ended with a weekly loss of more than 5%.

Crude oil for August delivery CLQ2 +2.49%  rose $1.56, or 2%, to end at $79.76 a barrel on the New York Mercantile Exchange. Prices stayed below $80 for most of the session, capping a week that set prices back 5.4%. Oil has retreated amid concerns that weakening global growth would take a toll on demand, and Friday’s respite was thought to be brief."

"-August Soybeans finished up 2 at 1425, 22 3/4 off the high and 6 up from the low. November Soybeans closed up 1 1/4 at 1372 1/2. This was 8 up from the low and 18 off the high. August Soymeal closed down 5 at 419.7. This was equal to the low and 11.2 off the high. August Soybean Oil finished down 0.15 at 49.84, 0.6 off the high and 0.37 up from the low. Soybeans traded slightly higher on the day but closed well off session highs. Slightly better world financial markets are providing broad based commodity market support. Argentina soybean prices edged higher today on growing domestic demand and government officials cut soybean production to 40.3 million tonnes vs. the USDA estimate of 41.50 million tonnes. Futures rose in Chicago following the announcement as the market anticipates a shift in international demand from South America to the U.S. due to their lower oilseed production. Midday weather maps show restricted rainfall for the lower and eastern Midwest next week. A high pressure ridge will develop across the western plains next week producing near record heat in Texas, Oklahoma, and Kansas. Bull spreading was active today. The July contract gained on the November option as traders expect demand to accelerate in the coming months. Short covering was noted ahead of the Crop Progress Report next Monday and the June Stocks Report next Friday. Soybean oil traded down.07 cents and soybean meal ended the day down $7.00."

FKLI- Rebound After Early Retracement, Upside Still Intact.

Stock index is likely going to stay above 1,590 level at least for the end of June this week judging from a resilient performance from U.S and Asia stock market. Market background is now more focus on signs of major economy set back and debt issues in European union. So far the development on European debt crisis has yet not promisingly as most of the measure taken was just rhetoric rather than genuine action to resolve their debt crisis. On previous Friday close, the FBM KLCI rose marginally about 1.64 points to 1,603.07 while June contract retrace about 0.50 point to 1,606. For the time being, big gains local stock index are somewhat limited at the moment judging on regional market background, more rating agencies are slashing their outlook on U.S economy. Things are a lot different on technical perspective, current Bullish momentum is still good as market manage to rebound strongly after it open gap down to 1,596 level on previous Friday and recovered all the losses made in the morning session. The June contract tested the all time high again at 1,613 level, even though the hourly chart is showing strong Bearish divergence occurred since last week. Unfortunately, the Bearish divergence appeared so far does not portray market is rising with less strength but rather the other way round. In other words, the index futures is likely breaching above its all time high soon judging on strong demand outlook on local stock market. For today, support is located around 1,597 while resistance is pegged at 1,622. 

Daily Pivot Point
R2= 1622
R1= 1614
S1= 1597
S2= 1588

FCPO- Weakness Continue As Immediate Support Breached.

CPO futures begin to deteriorate quicker than expected on previous Friday amid Soy oil Bearish price performance. The benchmark Sept went down about RM47 to 2,953 level, day high and low were 2,970 and 2,932 respectively. Market just open gap down with no intermediate recovery throughout the trading session and could and if the benchmark Sept continue to correct below 2,920 level based on the support trend line above it jeopardize the overall short term Bullish outlook to Bearish. Based on  seasonal cycles, demand is likely to rise cue to Muslims fasting month and festive occasion. Technically, the benchmark Sept is forming a higher low at the moment but things could change to Bearish very quick if it breach below the support trend line around 2,920 level. This is a short term direction dilemma as market is still uncertain whether the potential increase in demand before the Muslims fasting month that begin on the end of July. Bears will likely control the market tempo if the market open gap down below 2,920 level as it is also breaching the support trend line. For today, pivot calculation for immediate support level is located around 2,933 while resistance is pegged at 2,971 followed by 2,989.

Daily Pivot Point
R2= 2989
R1= 2971
S1= 2933
S2= 2913
 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.