Wednesday, June 6, 2012

Market Overview 7th June 2012

Thursday, 7th June 2012. The FBM KLCI jumped to record another winning streak yesterday amid recent recovery on regional market and U.S market as well. Other news to follow.

"-U.S. stocks rallied Wednesday, with the Dow industrials and S&P 500 gaining the most for 2012, on hopes the world’s central bankers will move to bolster the global economy. Up the most since a 337-point rise on Dec. 20, 2011, the Dow Jones Industrial AverageDJIA +2.37%   rallied 286.84 points, or 2.4%, to 12,414.79. The S&P 500 Index SPX +2.30%   climbed 29.63 points, or 2.3%, to 1,315.13, with energy the best performing, The Nasdaq Composite COMP +2.40%   rose 66.61 points, or 2.4%, to 2,844.72."

"- Tokyo and Hong Kong shares stood out in a broadly positive day for Asian stock markets Wednesday, helped respectively by a weaker yen and hopes for Chinese policy-easing.

Japan’s Nikkei Stock Average JP:100000018 +1.81%  rallied 1.8%, and Hong Kong’s Hang Seng Index HK:HSI +1.43%  rose 1.1%, although the Shanghai Composite indexCN:000001 -0.10%  traded flat. Australia’s S&P/ASX 200 index AU:XJO +0.29%  picked up from a flat start to trade up 0.2%, boosted by the release of stronger-than-expected gross domestic product data.Read more on Australian GDP. South Korea was closed for a holiday, while key indexes in Taiwan, Singapore and New Zealand all traded solidly higher."

"-July Soybeans finished up 36 3/4 at 1386 1/4, 5 3/4 off the high and 33 1/2 up from the low. November Soybeans closed up 22 1/4 at 1299 1/4. This was 23 3/4 up from the low and 7 1/4 off the high. July Soymeal closed up 14.6 at 414.6. This was 14.7 up from the low and 1.9 off the high. July Soybean Oil finished up 0.75 at 49.25, 0.4 off the high and 0.65 up from the low. July soybeans were trading near 36 1/2 cents higher late in the day and off just 6 cents from the mid-session peak. A major shift in risk attitudes from global money managers, increased demand signs, a strong cash market and questionable weather for the next two weeks are factors which encouraged short-covering and new buying early in the session. Private exporters reported a sale of 120,000 tonnes of US soybeans to China for the 2011/12 season and this helped to support the July contract. Cash markets are already pushing higher in the past couple of days as exporters attempt to fill previous export orders with slow producer selling. Initial crop conditions are favorable for the US crop but mostly dry weather in May leaves topsoil conditions exceptionally dry and this increases the need for better rains next week and the following week to expect favorable early growth. Rain events late in May missed southern Illinois, southern Indiana, Missouri and Arkansas and these areas could see a significant drop in crop condition ratings if timely rains do not emerge. Short to very short topsoil conditions (upper 6 inches of soil) exist for 56% of Indiana, 54% of Illinois, 82% for Missouri and 74% of Arkansas as of June 3rd. These four states represented 31.7% of the US soybean crop production last year. Ideas that the market is oversold after recent losses added to the positive tone into the mid-session with a surge higher in the stock market and weakness in the dollar helping to support. Some traders see several rain events next week which could push rain totals to 1/2 to 1 1/2 inches and the high end estimates would ease dryness concerns which 1/2 inch or less in some areas may not be enough to avoid a quick return to stress "if" temperatures heat up the following week. Argentina producers will halt grain sales for the next week in protest of higher taxes."
FKLI- Traders Got Spooked Previously. 

Malaysia stock index recovered for the second session straight amid strong rebound from regional index. The strong move upwards that made the FBM KLCI rose about 9.07 points to 1,569.43 and June contract that surge about 15 points to 1,572.50 might be due to substantial positive momentum traded on the Dow futures during Asia trading session yesterday. Words was out that the U.S stock index recovered swiftly due to a sudden improvement on services sectors and more rallies are expected soon. When the index futures dipped swiftly on previous Monday and recovered the next session, it would be still muddy to interpret that the market is going to recover any further. But when the index futures open for trading on morning session yesterday, it was a strong sign for the market to rally further as it open gap up. What we though a fearful Sell-off suddenly turned to be a technical correction when the market manage to continue its recovery after it gap down on previous Monday this week. The higher lows formation has formed on daily and hourly chart suggest that the recovery for the index futures is here to stay as Buyers manage to maintain the dominant control in the market. For today, support is located around 1,564 while resistance is pegged at 1,584.
Daily Pivot Point
R2= 1584
R1= 1578
S1= 1564
S2= 1555

FCPO- Reluctant To Recover

Here we go again, a volatile week for commodities market again as traders weighting the possible outcome if the stock market does rebound together with commodities prices due to some positive economy data in the U.S. It is a vague example to relate stock market with commodities prices but in this cases, they are very much connected. The reason behind will be both of these market were hammered by bad economy data on the west and concern over the European Union to handle their financial crisis. And it is based on the sentiment of good economy data that will enable the market to recover back. The benchmark Aug recovered about RM37 to 3,003 after a volatile trading session with tight range trading session, hovering  around 3,026~2,993.
Technically, the benchmark Aug is attempting to recover for the past two sessions but the market is having big hurdles to sustain the gain above 3,000 level. Sellers will find it easier to just Sell it first and ask question later when the price shoot pass 3,010 level yesterday. Even though, higher low candle formation has formed on hourly chart but this was not a strong sign for further positive momentum as there was no follow thru Buying activities after the market gap up. When a market just stop to rally after any gap up, Buyers have stopped to accumulate and liquidate most of their Long positions and worse some of them even turn their positions to Short, forcing the market to retrace lower. Conclusively, we are going to need more convincing rally above yesterday high at 3,026~3,030 if the market suppose to recover any further this week.

Daily Pivot Point
R2= 3040
R1= 3021
S1= 2988
S2= 2974
 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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