Monday, June 4, 2012

Market Overview 5th May 2012

Tuesday, 5th June 2012. The FBM KLCI losses its ground and succumb to weakness yesterday as most Asia regional market were traded lower. Other news to follow.

"- U.S. blue-chip stocks ended a choppy session with their fourth straight loss Monday, lagging the other benchmarks, as a worsening outlook for the global economy vied with hopes of central bank stimulus. The Dow Jones Industrial AverageDJIA -0.14% ended down 17.11 points, or 0.1%, at 12,101.46, its lowest since Dec. 19. The S&P 500 Index SPX +0.01%  ended up 0.14 point, or 0.01%, at 1,278.18, breaking three days of losses. On Friday, the index of large-cap stocks fell under its 200-moving average and also dropped 10% from a 52-week intraday high, in what some technical analysts consider correction territory. The Nasdaq Composite Index COMP +0.46%  also gained for the first time in four days, ending up 12.53 points, or 0.5%, at 2,760.01.

"-Asian markets slumped Monday as a weak U.S. jobs report added to a growing list of investor worries about a fragile global economy, sending Japanese stocks to their lowest in more than two decades, while Hong Kong shares erased year-to-date gains. The Hang Seng Index HK:HSI -2.01%  fell 2% during the session, wiping out its gains in the year to date, and giving the Hong Kong benchmark a net loss of 1.4% at Monday’s close. China’s Shanghai Composite index CN:000001 -2.73%  slumped 2.7%, South Korea’s KospiKR:SEU -2.80%  skidded 2.8%, Taiwan’s Taiex plunged 3% and Australia’s S&P/ASX 200 index AU:XJO -1.94%  lost 1.9% to 3,985, finishing below the 4,000 mark for the first time since November. In Tokyo, the benchmark Nikkei Stock Average JP:100000018 -1.71% sank 1.7%, while the broader Topix lost 1.9% to end the day at 695.51, its lowest closing level since at least 1985."

"- July Soybeans finished down 4 1/4 at 1340, 15 3/4 off the high and 8 1/2 up from the low. November Soybeans closed up 10 1/4 at 1268 1/4. This was 23 1/2 up from the low and 3 3/4 off the high. July Soymeal closed up 1.6 at 396.1. This was 1.3 up from the low and 7.9 off the high. July Soybean Oil finished down 0.28 at 48.31, 0.87 off the high and 0.5 up from the low. With most of the new news today focused on the potential tightening of new crop supply and a general fear that fund traders will be aggressively rolling longs out of old crop and to new crop helped to pressure July and support November soybeans for the session today. November soybeans traded to a new low for the move and to the lowest level since February 13th overnight but traded moderately higher on the day late in the session and was trading near 10 cents higher on the day. On the daily wire, the USDA reported a sale of 165,000 tonnes of US soybeans to China for the new crop season. There is uncertainty on the weather outlook as most of the Midwest looks to receive some rain in the next week but perhaps not enough to spur growth. There is a mixed view for next week after temperatures move to above normal on the weekend. Some traders see better rain coverage and others see only light coverage next week so some areas could be under some dryness stress into mid-June. Traders see the first crop conditions update for the year to show near 69% of the crop is rated good to excellent. A weak US dollar helped provide some outside market support to the market today. Weekly export inspections come in at 16.96 million bushels which was higher than expected and compares with 11.4 million bushels necessary each week to reach the USDA projection for the season. Traders see the possibility of a higher export forecast for the 2011/12 season for next week's USDA supply/demand update."

FKLI- Steep Gap Down Due To Regional Index

Stock index and index futures were traded significantly lower yesterday due to negative overnight performance on U.S stock index last week. The sell-off still continue on Asia trading session as the Dow futures and other European stock index were traded in negative zone. Concern over the sustainability of economy growth and recent manufacturing activities that slow down, most investors are switching their portfolio to more defensive stocks. Technically, the gap down below the immediate support level and follow by continuous Selling pressure have caused the positive momentum to halt. Market is still susceptible for another correction if there is less supportive factors such as recovery from U.S stock index soon. If regional market continue to dipped, our local market is likely hammered again today. For today, pivot support level is located around 1,542 while resistance is pegged at 1,557.

Daily Pivot Point
R2= 1562
R1= 1557
S1= 1547
S2=  1542

FCPO- Weakness Continue

CPO futures continue its losing streak again yesterday with massive Selling pressure from external factors such as the deteriorating prices on broader commodities prices worldwide. Prices for usable and edible commodities are taking the beating as price outlook continue to weaken due to global economy slow down concern. With so many signs pointing at further discount on current commodities prices, traders prefer to hold Short positions rather than Long positions overnight. Yesterday, palm oil future fell below 3,000 level for the first time this year, wiping all of the gain made before and strengthening Bears influence in the market. The Bears orchestrated the Selling spree systematically with lower high and lower lows formation formed noticeably in daily chart. In another words, current market direction is undoubtedly heading south as Bearish candle formations have formed in daily chart as well. Short set up should present if the market attempt to recover and then retrace from that high. The best Short set up would be waiting a lower high formation at least on 15 minutes time frame chart. That way, traders can place a protective stop above the lower high area while holding their Short positions after the price retrace from that recovery. For today, support is located around 2,932 while resistance is pegged at 2,977.

Daily Pivot Point
R2= 2996
R1= 2977
S1= 2932
S2= 2906
 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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