Tuesday, July 10, 2012

Market Overview 11th July 2012

Wednesday, 11th July 2012. The FBM KLCI surge again to new high yesterday amid continuation accumulation activities on local fund despite uncertain regional market and slowing down economy activities on China. Other news to follow.

"- U.S. stocks fell for a fourth session Tuesday as the U.S. dollar advanced on uncertainty over Europe, and engine maker Cummins Inc. reduced its sales forecast, adding to concerns about second-quarter earnings. The Dow Jones Industrial AverageDJIA -0.65%  shed 83.17 points, or 0.7%, to 12,653.12, led by a 4.1% drop in Alcoa Inc. AA -4.11%   shares after the aluminum producer said late Monday it swung to a second-quarter loss.  The S&P 500 index SPX -0.81%   fell 10.99 points, or 0.8%, to 1,341.47, weighed by industrials and materials sectors. Both the Dow and S&P 500 have fallen for four straight sessions. The Nasdaq Composite COMP -1.00%   shed 29.44 points, or 1%, to 2,902.33, its third session in the red."

"-Asian stocks dropped Tuesday after Chinese trade data reaffirmed weakening domestic demand in the country, with investors taking little encouragement from news of Europe’s fresh lifeline to Spain. Japan’s Nikkei Stock Average JP:100000018 -0.44%  eased 0.4%, Hong Kong’s Hang Seng Index HK:HSI -0.16%  slipped 0.2% and China’s Shanghai Composite Index CN:000001 -0.29% dropped 0.3%. South Korea’s Kospi KR:SEU -0.36%  lost 0.4%, Australia’s S&P/ASX 200 IndexAU:XJO -0.49%  gave up 0.5% and Taiwan’s Taiex XX:Y9999 -0.80%  lost 0.8%."

"-August Soybeans finished down 16 1/4 at 1590 1/2, 20 3/4 off the high and 4 1/4 up from the low. November Soybeans closed down 9 1/4 at 1538 1/2. This was 7 1/2 up from the low and 17 off the high. August Soymeal closed down 4.3 at 469.7. This was 3.2 up from the low and 5.6 off the high. August Soybean Oil finished down 0.27 at 54.29, 0.56 off the high and 0.32 up from the low. November soybeans traded an inside day on the charts. Pressure early in the session was linked to profit taking but traders reentered the market on the pullback. The USDA will release their updated domestic and global ending stocks tomorrow. The market is expecting 2012/13 domestic ending stocks near 141 million bushels which is nearly 1 million bushels higher than the June estimate of 140 million bushels. The trade is also expecting 2012/13 global soybean stocks near 57 million tonnes, or 1.50 million tonnes lower than the June estimate. The lack of rain across the heart of the Midwest forecasted for this week after the extreme heat of last week has traders expecting sharply lower yield potential for the soybean crop. This has the market concerned about a global soybean shortage later this year. Traders are anticipating an increase in U.S. soybean demand in the coming year due to the lower crop production out of South America. Rain is expected to move into the parts of the Midwest into the middle of next week, but confidence is low in this forecast with most of the rain expected east of the Mississippi. Outside markets provided a negative tilt as the U.S. Dollar traded higher and crude oil lower."

FKLI- Time To Go Up.

Stock index and index futures surge to new high again yesterday and it is not just any new high, it is never before seen level since the exchange established. How could a small market (small compare to other major market) went up when other benchmark indices is going n where due to market uncertainties. Unfortunately, there is no straight answer to that question as correlation sometimes works and sometimes it does not work. And for most seasonal and experience traders, they would not bet anything on "something that works sometime." On yesterday close, the FBM KLCI went up about 3.98 points to 1,624.29 level due to strong Buying on small and big cap plantation stocks while July contract rose about 9.50 points to 1,629.50, a level unseen so far. Technically,upside potential on index futures remain high as market can still go up even though there was some Bearish divergence shown on smaller time frame chart. Moreover, strong reason behind this rally was the lack of Bearish candle formation formed so far, all we can see was typical lower highs and higher highs formation on most time frame. With no sign of weakness yet, traders are advised to hold their Longed positions and for those who missed out their entry, try to find the chances to go Long instead of Short.

Daily Pivot Point
R2= 1635.50
R1= 1632.50
S1= 1624
S2= 1618

FCPO- Uptrend Or Downtrend ? 

If you are wondering what is the answer to the questions on the title above, read on. On paper or theoretically, it is not that difficult to identify a trend because even a ten years old toddler can tell you accurately where is the market heading if you show them the chart, any time frame. They will tell you without any prejudice it is an uptrend if the candle made two or more successive highs or a downtrend if the candles made tow or more successive lows. But when it come to more informed trader, things are narrated different and chart are view in a very different perspective. Simplicity and plain truth is not cool anymore in the financial world, people prefer complexity and comprehensive system because that will make them feel safe and secure. Unfortunately, complexity and confusing financial systems or financial products were the caused for big banks, hedge fund company, and financial institution taking too much risk and went bankrupt. The point here is, stick to what you know and simple because that is how you can made it trading in and out daily in the  market. Complex market jargon and secret of trading are for amateur who seek the thrill of getting rich quick and there is never a get rich quick scheme in the market, only proper manage portfolio and discipline to follow your sets of rules.  
Technically, volatility will be the headlines for the CPO market to move after the bechmark Sept made some correction from its previous rally. It would not be an easy task to identify a promising trend in a short term time frame because market is swinging more than  thirty points up and down, on most session. But according to my initial assessment, it is safe to say market is hovering on sideway market. And the range has been identified as "break or stay inside the range." If the benchmark Sept manage to breach above the 3,180 resistance level, it will signified Bullish outlook as Buyers are aggressive enough to Buy above this level. Meanwhile if the market manage to break below the 3,090 support level, more downside is expected. Else if there was no price travel above the resistance level or below the support level, the price will "stay inside the range."

Daily Pivot Point
R2= 3182
R1= 3156
S1= 3103
S2= 3076
 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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