Market Overview 30th July 2012

Monday, 30th July 2012. The FBM KLCI close unchanged on previous Friday, marking the first weekly retracement for the first time since mid of May. Other news to follow.

"U.S. stocks posted steep gains for a second day Friday, reclaiming a weekly advance as investors anticipated moves by the European Central Bank as well as the U.S. Federal Reserve.

Stocks hit session highs after Bloomberg News reported European Central Bank President Mario Draghi would hold talks with Bundesbank President Jens Weidmann in an attempt to remove the biggest obstacles to adopting new measures including bond purchases. The Dow Jones Industrial AverageDJIA +1.46%  ended up 187.73 points, or 1.5%, to 13,075.66, its first close above 13,000 since May 7 . The S&P 500 index SPX +1.91%  added 25.95 points, or 1.9%, to 1,385.97, extending gains into a second session. Health care and technology were the best performing of the index’s 10 major industry sectors, all of which advanced. It rose 1.7% for the week. The Nasdaq Composite COMP +2.24%  gained 64.84 points, or 2.2%, to 2,958.09."

"- Asian stock markets jumped Friday as a pledge from the European Central Bank to keep the euro zone intact and Samsung Electronics Co.’s record profit buoyed sentiment. South Korea’s Kospi KR:SEU +2.62% soared 2.6%, Hong Kong’s Hang Seng Index HK:HSI +2.02%  gained 2%, and Taiwan’s Taiex XX:Y9999 +2.21%  jumped 2.2%.

Japan’s Nikkei Stock AverageJP:100000018 +1.46% and Australia’s S&P/ASX 200 index AU:XJO +1.50%  each put on 1.5%, while China’s Shanghai Composite CN:000001 +0.13% ended up 0.1%."

"-August Soybeans finished up 28 at 1683 3/4, 11 off the high and 42 3/4 up from the low. November Soybeans closed up 34 1/2 at 1602. This was 51 1/4 up from the low and 10 off the high. August Soymeal closed up 8.4 at 527.2. This was 15.1 up from the low and 5.4 off the high. August Soybean Oil finished up 0.36 at 52.04, 0.18 off the high and 0.54 up from the low. November soybeans traded sharply higher into the closing bell as the market shifted focus back to the weather outlook for the month of August. Soybean meal and oil followed higher. A closely followed crop scout pegged the Iowa soybean yield at 39 bushels/acre and a satellite crop forecasting agency expects the US soybean yield to drop to 35.7 bushels per acre. Both estimates sent soybeans to new highs for the day. There was talk among traders over the 16-30 day forecast which many traders thought looked bullish for the soybean market with above normal heat and below normal moisture for a large percentage of the US Midwest. This has traders worried that yield potential will continue to drop over the coming weeks. Soybean bears are hopeful that better weather conditions in the eastern US may offset some yield loss in the west. This offered pressure to prices towards the close. Outside markets are offering support today with a lower US Dollar and higher crude oil prices."


FKLI- Likely A Healthy Retracement 

The FBM KLCI ended marginally higher but it does not hint the market correction phase is going to end that soon, as investors are likely to unload their Long holding for further profit taking. Stock index went up about 1.03 points to 1,624.94 level while Aug contract went up about 1.50 points to 1,624.50. Volume for August was traded significantly higher at 15,716 lots due to combined roll over activities. Most investors are still watching out how the earning seasons shape up in the west as their major companies earnings performance mostly missed out analyst expectation.  Technically, medium term upside remain intact as there was no violation on spot month below the white support trend line. Upside momentum would resume if the spot month contract manage to rally above 1,640 level this week. If this event materialize, we will looking at another higher lows formed on daily chart, strengthening current positive momentum. Else, traders are advised to watch out if the spot month contract manage to breach below 1,620 level (again) this week, because this is immediate support area. For today, support is located around 1.618 while resistance is pegged at 1,638.

Daily Pivot Point
R2= 1638
R1= 1631
S1=1618
S2= 1612


FCPO- Ranging, Awaiting Either Direction Breakout

CPO futures went up from the low as Soy oil manage to recover promisingly on Asia trading session. The benchmark Oct rose about RM45 to 2,927 while the most active traded Soy oil was went up about 0.27 cents to 51.97 cents per pound during Asia trading session on previous Friday, 6.13PM +8GMT. There were few surprises in previous Friday morning's USDA Grain Stocks and Acreage reports for corn, while Soy bean acres came in toward the high end of expectations and quarterly soybean stocks were larger than traders expected. Despite higher stock level for Soy bean, most of the benchmark contract were posting strong gains. After see-sawing for few sessions, the benchmark Oct is hovering on sideways movement at the moment. The range of these sideways area will be illustrated on the hourly chart above. Moving within the white trend line, market is expected to rally further if the benchmark Oct manage to breach above the 2,960 level while more downside is expected if the market went down below 2,880 level. These range will also act as short tern or immediate support and resistance level for this week. For today, pivot support level is located around 2,9877 while resistance is pegged at 2,955.

Daily Pivot Point
R2= 2955
R1= 2941
S1=2902
S2= 2877
 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.