Market Overview 18th July 2012

Wednesday, 18th July 2012. The FBM KLCI rallied again to new ground again yesterday amid keen regional performance pending on more loosening monetary policy on China and U.S. Other news to follow.

"-U.S. stocks reclaimed Tuesday gains after Federal Reserve Chairman Ben Bernanke spoke and Wall Street’s gaze returned to solid results from Goldman Sachs Group Inc. and Coca-Cola Co. After sliding 82 points and rising as much as 102 points, the Dow Jones Industrial Average DJIA +0.62%  finished at 12,805.54, up 78.33 points, or 0.6% The S&P 500 Index SPX +0.74% advanced 10.03 points, or 0.7%, to 1,363.67, with health care, natural resources and telecommunications the best performers of its 10 sectors. The Nasdaq Composite Index COMP +0.45%  climbed 13.10 points, or 0.5%, to 2,910.04."


"-Hong Kong stocks led a strong advance for Asian markets Tuesday, as investors looked toward the U.S. Federal Reserve and the Chinese government for signs they will loosen their respective monetary policies further. The rally came with U.S. Federal Reserve Chairman Ben Bernanke due to start two days of testimony before the Congress later in the global trading day. The benchmark Hang Seng Index HK:HSI +1.75%  spiked 1.8% in Hong Kong, while mainland China’s Shanghai Composite CN:000001 +0.62% ended 0.6% higher a day after it ended at its lowest level in more than three years. Japan’s Nikkei Stock AverageJP:100000018 +0.35%  rose 0.4%, pushed higher by investors returning from a three-day weekend. Australia’s S&P/ASX 200 AU:XJO +0.87%  gained 0.9%, South Korea’s Kospi KR:SEU +0.23% added 0.2% and Taiwan’s Taiex XX:Y9999 +0.52%climbed 0.5%."


"-August Soybeans finished up 5 1/4 at 1639, 8 3/4 off the high and 22 1/4 up from the low. November Soybeans closed unchanged at 1590 1/2. This was 15 1/4 up from the low and 16 1/2 off the high. August Soymeal closed up 6.7 at 494.0. This was 10.5 up from the low and 0.7 off the high. August Soybean Oil finished down 0.51 at 54.14, 0.69 off the high and 0.24 up from the low. November soybeans traded mixed today, but closing nearly unchanged on the day. August soybean meal traded higher into the close while soybean oil settled lower. The weather outlook for most of the Midwest looks unfavorable the next two weeks. Limited rainfall is expected east of the Mississippi River and the western Corn Belt will remain dry. Rains in the southeast and delta should be beneficial to soybean growth. Blistering temperatures, mixed with terrible topsoil conditions will continue to stress soybeans west of the Mississippi River. The market is beginning to take down US soybean yield projections as soybean pollination advances during this stretch of record high heat. One closely followed crop scout pegged the US soybean yield at 39 bushels/acre, down 1 bushels/acre from previous forecast. Above normal temperatures this week should advance pollination and pod setting significantly, while at the same time increasing the stress on soybean crops. Outside markets were mixed today with stocks trading stronger and the US Dollar offered resistance to commodities after trading stronger on the day."

FKLI- Dont Look At Indicators- Misleading

The index futures done it again, it went up for the 5th sessions straight and hitting new high on close. It seems that the equities market is having a new blast of Bullish momentum and it is yet show any sign of stopping. At close, the stock index went up about 3.19 points to 1,639.15 while July contract surged about 10 points to 1,642.50, the high of the day was 1,646, a record high so far. If both of the instrument sustain it performance, we are likely looking at new found long term Bull run after it breach its previous major resistance around 1,610 level. Technically, index futures is poised maintain its positive course despite overbought and Bearish divergence reading almost on any time frame. Indicators will likely show weakening diverging sign when the market goes up, but this condition is normal to expect in a uptrend market. Price formation and trend line are always the better indicators to measure market psychology and possible direction because it will never show you overbought / oversold reading, and no divergence to look at. For today, pivot support is located around 1,635 while resistance is pegged at 1,648.   

Daily Pivot Point
R2= 1653.5
R1= 1648
S1=1635
S2= 1627

FCPO-Vicious Retracement, Recovery Hanging By A Threat

CPO futures choose to erase its previous Friday gained by closing at down yesterday. The benchmark Oct dipped back RM60 to 3,062, the day high and low was 3,130 and 3,061 respectively. Most of the weakness is driven by panic sell-off on Soya oil during early Asia trading session yesterday. Tracking almost identical to the Soya oil, palm oil futures begun its descend faster when it resume trading for second session. Now the medium term Bullish momentum could reverse its role if the benchmark Oct manage to breach below the support trend line around 3,020 level. In another words, all bets on Long will be off if the market went below this level. There are two possible direction and outcome for the market to move this week as describe on the hourly chart above. Pending on either side break out, the benchmark Oct should resume its recovery if the resistance trend line is breach above or retrace further if it breach below the support trend line. For today, market is expect to hover in sideline as there was little price progression on overnight Soya oil. Pivot support is located around 3,038 while resistance is pegged at 3,107.

Daily Pivot Point
R2= 3153
R1= 3107
S1=3038
S2= 3015
 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.