Friday, July 27, 2012

Market Overview 27th July 2012

Friday, 27th July 2012. The FBM KLCI went down suddenly as most investors lose confidence over the short term financial outlook. Other news to follow.

"- U.S. stock-index futures turned sharply higher Thursday as European Central Bank President Mario Draghi reportedly vowed the ECB would save the beleaguered euro. Stock futures extended gains after U.S. economic reports had jobless claims falling more than anticipated last week and June orders for durable goods exceeding expectations. Futures on the Dow Jones Industrial Average DJU2 -0.04% rose 140 points to 12,777. S&P 500 futures SPU2 -0.07% jumped 16.3 points to 1,351.2, while Nasdaq-100 futuresNDU2 +0.17% advanced 32 points to 2,575.5.

"- Most of the major Asian stock markets rose Thursday as investors looked for bargains after some large recent losses, with Japanese shares ending higher for the first time in five sessions. Better-than-expected earnings reports from Fanuc Ltd. and Nintendo Co. offset a disappointing outlook from Canon Inc. in Tokyo, while worries about the Chinese property sector outlook sent Shanghai stocks to their lowest finish more than three years. Japan’s Nikkei Stock Average JP:100000018 +0.92%  gained 0.9%, South Korea’s KospiKR:SEU +0.74%  climbed 0.7%, Australia’s S&P/ASX 200 Index AU:XJO +0.58%  put on 0.6% and Hong Kong’s Hang Seng Index HK:HSI +0.08% inched up 0.1%. Taiwan’s Taiex XX:Y9999 -0.12%  slipped 0.1%, and China’s Shanghai Composite Index CN:000001 -0.47% dropped 0.5% to 2,126.00, a level the benchmark hasn’t seen since March 2009."

"-August Soybeans finished down 38 1/2 at 1655 3/4, 41 1/4 off the high and 7 up from the low. November Soybeans closed down 48 at 1567 1/2. This was 6 up from the low and 47 1/2 off the high. August Soymeal closed down 11 at 518.8. This was 4.3 up from the low and 17.2 off the high. August Soybean Oil finished down 0.56 at 51.68, 0.67 off the high and 0.18 up from the low. August and November soybeans traded sharply lower into the close today after storm systems pushed across the Corn Belt last night and this morning. Technical sell signals pressured soybeans towards the low end of the range as funds continue their profit taking this week. The rain likely stabilized topsoil conditions in the Midwest and offered relief to soybean crops in certain areas. Another ridge is expected to build in the western Midwest next week bringing on another round of warm and dry conditions for the central Midwest. Net weekly export sales for the week ending July 19th, came in at 193,200 tonnes for the current marketing year and 517,300 for the next marketing year for a total of 710,500. Cumulative soybean sales stand at 105.0% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 101.3%. Current sales continue to outpace the USDA export forecast for the 2011/12 marketing year. Net meal sales came in at 150,500 tonnes for the current marketing year and 106,500 for the next marketing year for a total of 257,000. As of July 19, cumulative soybean meal sales stand at 95.0% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 88.4%. Sales of 40,000 tonnes are needed each week to reach the USDA forecast. Soybean oil sales came in at 7,200 tonnes for the current marketing year and -6,000 for the next marketing year for a total of 1,200. Cumulative soybean oil sales stand at 92.3% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 81.1%. Sales of 4,000 tonnes are needed each week to reach the USDA forecast. The strong export sales pace for soybeans, year to date, continues to be supportive to prices going forward."

FKLI- Recovery Quickly Reverse Its Role

This is the part where I say "oppss." Unfortunately, getting use to read chart and analyse it does not foretell you for sure what is going to happen the next day, what we are doing is just dealing with probabilities and probabilities will sometimes turn out unexpected outcome. Best tools and practice when you are trading in the market is always have a contingency plan or a safe stops, using stops is the best assurance to become a successful trader. Contrary to what is going to happen after a Bullish engulfing candle, the market swiftly retraced yesterday. It happen as the Bears are counter attacking, wiping out previous gain. At close, the FBM KLCI shed about 11.18 points to 1,623.91 level while July contract was traded down about 17 points to 1,622, the lowest in two weeks time. Volume for the spot month were traded higher at 12,718 while volume for the Aug contract rose to 9,711. Technically, market is likely going to retrace further if the spot month contract breach below immediate support level around 1,620. Furthermore, if that even materialize, the first lower high will be formed in daily chart and that is definitely signifies medium term Bullish momentum has come to end. For the mean time, based on today pivot support and resistance level, the index futures is likely hovering within 1,636~1,613.

Daily Pivot Point
R2= 1651
R1= 1636
S1= 1613
S2= 1604

FCPO- Weakness Continues

CPO futures return to negative territory as Soy oil unable to hold the gains made overnight. The benchmark Oct dipped about RM69 to 2,882 while the most active traded Soy oil lost about 0.36 cents to 51.89 cents per pound. Volume for the benchmark Oct was recorded lower to 16,128, signifying less intensity when Sellers push the market down. But that alone would not mean that the Sell-off is less significant compare to previous week, market is still susceptible for another correction even though yesterday volume was traded lower. Downside risk is likely increased as the benchmark Oct manage to breach below previous support level / previous low around 2,897 level. Looking at the hourly chart above, there was another lower lows candle formation occur yesterday, which signifies Sellers were in control when the market approaching its closing session. But for today, the benchmark Oct is going to recover as the downside for Soy oil prices is likely capped capped around 51.50~51.60 cents per pound. Conclusively, medium term down trend is still in motion with some expectation on mild technical rebound along the way.

Daily Pivot Point
R2= 2970
R1= 2926
S1= 2859
S2= 2836
 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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