Monday, June 25, 2012

Market Overview 26th June 2012

Tuesday, 26th June 2012. The FBM KLCI ended yesterday session unchanged yesterday despite weaker performance on regional index. Other news to follow.

"-U.S. stocks declined Monday, denting June gains with four sessions in the month remaining, as pessimism rose about the outcome of a meeting of European leaders this week. The Dow Jones Industrial Average DJIA -1.09%  fell 138.12 points, or 1.1%, to 12,502.66, with Wal-Mart Stores Inc. WMT +1.31%   the sole component of its 30 to rise. The S&P 500 SPX -1.60%   lost 21.30 points, or 1.6%, to 1,313.72, with technology hit the hardest among its 10 sectors. The session marked the third down day in four for both indexes. The Nasdaq Composite COMP -1.95%  shed 56.26 points, or 2%, to 2,836.16."

"-Mainland Chinese and South Korean stocks tumbled to lead Asian markets lower Monday on unrelenting worries about the euro-zone debt crisis, with commodity shares losing ground across most of the region. China’s Shanghai Composite Index CN:000001 -1.63%  dropped 1.6% to complete a four-trading-day losing streak as the markets there reopened after a long weekend, while South Korea’s Kospi KR:SEU -1.19% ended 1.2% lower. Taiwan’s Taiex XX:Y9999 -0.77%  slid 0.8%, Japan’s Nikkei Stock AverageJP:100000018 -0.72%  lost 0.7%, and Australia’s S&P/ASX 200 index AU:XJO -0.50%  and Hong Kong’s Hang Seng Index HK:HSI -0.51%  each shed 0.5%."

"-August Soybeans finished up 42 1/4 at 1468 1/4, 10 3/4 off the high and 25 3/4 up from the low. November Soybeans closed up 50 1/4 at 1425 3/4. This was 27 1/4 up from the low and 11 1/4 off the high. August Soymeal closed up 9.5 at 429.2. This was 5.8 up from the low and 6.6 off the high. August Soybean Oil finished up 1.56 at 51.4, 0.36 off the high and 1.13 up from the low. November soybeans surged to 50 cents higher heading into the closing bell and the market managed to push to new contract highs. Soybean futures rose in Chicago after morning weather maps showed that crops in the lower and eastern Midwest will see no significant stress relief, at least through Wednesday of this week. Afternoon weather models show a cooler and wetter pattern for the southern Midwest, beginning next Monday. Confidence and accumulation for this idea is low at this point in time. Western Corn Belt regions, especially southern areas, look to turn very hot in the next two weeks with mid-90's and even 100 degree temperatures common in the week ahead. The dry conditions are making it difficult for farmers to double crop beans over harvested wheat. The U.S. Dollar is trading slightly higher while stocks are lower on the day, ahead of the European Summit later this week. November soybeans received additional strength after the USDA reported that private exporters sold 120,000 tonnes of new crop soybeans to China this morning. Weekly Net Export Inspections, released for the week ending June 21st, were reported below market estimates at 9.18 million bushels. Inspections need to average 12.8 million per week to reach the USDA projection for the marketing year. Traders expect the soybean "good to excellent" ratings to be revised lower in the afternoon Crop Progress Report."

FKLI- Floating At The High. 

Stock index closed with no changes yesterday after it rallied to year high at 1,611.50 level despite weaker performance on regional index and U.S Dow futures. Local market is now officially moving without depending on external source at the moment as it has been rallied while other market is tanking since last week. As a result, the FBM KLCI closed 0.05 higher to 1,603.12 and the June contract finished slightly lower about 3 points to 1,603 level. Technically, market remain Bullish at the moment as there is no sign for the market to retrace yet even though Bearish divergence shown on hourly chart above suggest that the index futures had been overbought for at least a week. Based on my assessment on current FKLI outlook, market has been struggling to create a new high and retrace the next minute off that new high. This condition may indicate that majority Buyers do not want to commit more (cautious) and Buy above that level at the moment and they rather cash out their Long positions around that high levels. Conclusively, traders are recommend to go Long if the index futures does retrace to today second pivot support level around 1,593 level. It might be a long wait for the market to retrace till that level but worth it judging from current Bullish market.

Daily Pivot Point
R2= 1620
R1= 1611
S1= 1598
S2= 1593

FCPO- Sudden Surge Due To Better Than Expected Recovery On Soy Products

CPO futures surged after an unexpected recovery made on Soy oil yesterday. Most of Short holders are put to stress when the market just open gap up about 85 points in the morning session yesterday. Decision has to be made whether to liquidate the position on market open, wait for the market retrace slightly or placing safe stops few points above previous high and wait for the market to retrace. Usually the right thing to do in this situation appear to be taking the third choice. Rational behind this was trader can take time to think through what has happen and the effect to their trade, next was to liquidate the unfavourable positions if the situation gone bad and some time the trader can also turn their position along with the break out. Unless it is a strong break out where the market just move according to its preceding trend, the worse thing to do when market has gapped and putting your positions in nightmare situation was to take the losses and turn your positions along the gapped. It is the worse you could make because it could turn out to be a weak / false break out and you could ended your positions whipsawed. Back to technical reading, the benchmark Sept is likely to return to Bullish outlook at the moment as it has breach above important resistance trend line set up last week. Pending for further recovery above the major resistance level around 3,060 level, market is likely hovering within 3,060 ~ 2,980 level, maybe at least for this week. In other words, 3,060 will serve as immediate resistance while 2,980 will set as immediate support level.

Daily Pivot Point
R2= 3074
R1= 3052
S1= 3015
S2= 3000

 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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