Market Overview 13th Aug 2012

Monday, 13th Aug 2012. The FBM KLCI ended slightly higher on previous Friday amid some recovery made

"- U.S. stocks erased Friday losses to tally their fifth week of gains, sending the S&P 500 to a four-month high, with disappointing Chinese trade data advancing hopes for further moves to bolster the global economy. After a 70-point drop, the Dow Jones Industrial Average DJIA +0.32%   ended up 42.76 points, or 0.3%, at 13,207.95, led by Hewlett-Packard Co. HPQ +1.49% . It rose 0.9% for the week. At five straight weeks, the blue-chip average is in its longest winning streak since October.

The S&P 500 index SPX +0.22%  ended up 3.07 points, or 0.2%, to 1,405.87, with telecommunications the best performer and consumer staples off the most. The index ended at its highest level since April 3 and extended gains to a sixth straight session. The S&P has risen 10% from its June 1 closing of 1,278.04, reclaiming the 1,400 level in the past week. It rose 1.1% this week, also its fifth week of gains." The Nasdaq Composite COMP +0.07%  rose 2.22 points, or 0.1%, to 3,020.86 and ended up 1.8% for the week, its fourth straight week of gains.Volume, however, was low. New York Stock Exchange Composite volume was just over 2.7 billion, its lowest volume day in over a month. Nasdaq Composite volume was just over 1.5 billion, under the 2012 average of 1.74 billion."

"-Most Asian markets ended lower Friday as a slowdown in China’s July exports and imports dragged on sentiment and led investors to lock in profits before the weekend, with Li & Fung Ltd. and some other stocks also hurt by weak earnings reports. The broad declines reflected heightened worries about China’s economic growth outlook, after July data showed China’s trade surplus narrowed during the month as growth rates for both exports and imports fell below estimates. China’s Shanghai Composite IndexCN:000001 -0.24% snapped a five-day-winning streak to finish 0.2% lower, Japan’s Nikkei Stock AverageJP:100000018 -0.97%  fell 1%, while Australia’s S&P/ASX 200 IndexAU:XJO -0.72%  dropped 0.7% and Hong Kong’s Hang Seng Index HK:HSI -0.66% fell 0.7% each. South Korea’s Kospi KR:SEU +0.30% rose 0.3% and Taiwan’s Taiex XX:Y9999 +0.10% gained 0.1%."

"- Crude-oil futures retreated Friday after the International Energy Agency warned sluggish global growth could restrict demand and after China reported weaker-than-expected trade data.

Oil for September delivery CLU2 +0.03%  lost 49 cents, or 0.5%, to $92.87 a barrel on the New York Mercantile Exchange. On the week, however, oil advanced 1.6%."

"-August Soybeans finished up 15 at 1709 1/2, 29 off the high and 15 up from the low. November Soybeans closed up 12 1/2 at 1643 3/4. This was 22 3/4 up from the low and 24 1/4 off the high. August Soymeal closed up 5.8 at 544.5. This was 7.1 up from the low and 2.8 off the high. August Soybean Oil finished up 1.21 at 53.6, equal to the high and 0.84 up from the low. November soybeans traded sharply higher into the closing bell but settled off session highs. The higher trade is linked to a bullish USDA crop report this morning. In addition to this morning's USDA report, it was reported that private exporters sold 290,000 tonnes of US soybeans to China for the 2012/13 marketing year. The USDA pegged the average US soybean yield at 36.1 bushels/acre vs. market estimates of 37.8. The report also revised 2012/13 production lower to 2.692 billion bushels vs. trade expectations of 2.817. The market viewed the report as bullish but weather maps have turned more favorable next week which could help soybean conditions in the Corn Belt. A cooler and wetter pattern this week and next could relieve stress for much of the Midwest. Soybean growth remains 2-3 weeks ahead of schedule so traders still question whether or not the damage already done to the crop is reversible at this point. Outside markets were negative today with US Stocks weaker and crude oil trading lower."

FKLI- Still Trapping Within The Range. 

The stock index inches up last Friday, ended the week slightly higher while index futures tracking few points behind it. With earning outlook on U.S market beginning to shine, the U.S stock index manage to record gained for the 5th times. With most of them rising above psychological resistance level, the Dow index went passed 13k level, S&P was able to went above 1,400 level while the Nasdaq Composite rose above 3,000 level as well. These were the U.S stock index reading for above average performance throughout the whole year, but market analyst doubt that all these rally may not be sustain after the earning seasons ended. Climbing steadily for local stock index, the supportive sectors seem to coming from Plantation, Banking and services sectors. Progressive performance from these sectors are key to more robust growth on stock market. Technically, on medium term the spot month contract for index futures was still hovering on Bullish mode after it manage to create a lower high shown on daily chart above. Things are slightly different for short term outlook as direction for the spot month contract still moving on ranging market. We are looking for further upside confirmation if the spot month contract manage to went above 1,652 level while market is susceptible for more Downside / major correction if the spot month contract retrace below 1,618 level. For today, pivot support level is located around 1,638 while resistance is pegged at 1,646.

Daily Pivot Point
R2= 1646
R1= 1643
S1= 1638
S2= 1635

FCPO- Downside Likely  Paused Amid Low Supplies On Soya Oil And Increase Demand

CPO futures manage to rebound from previous Sell-off on last Friday. It was a close call  as the benchmark Oct mange to recover swiftly amid positive Aug export figures after it open on weekly low and most of all better than expect price recovery on Soy oil last Friday. The most active traded Soy oil surge about 1.25 cents to 53.84 cents per pound on previous Friday due to Soy bean production that dropped about 12% compared with last year. Meanwhile for the benchmark Oct, price manage to inches up about RM3 to 2,885. Even though it is a small recovery, it is enough to justify that the Downside risk is likely reduced as price manage to rally from the weekly low and closed positively. For today, the benchmark Oct is likely gap up due to Soy oil price surge on previous Friday. Temporary double bottom pattern is likely to form and if the Soy oil continue to climb steadily we can expect this double bottom pattern to provide us some decent recovery from here. Conclusively, long to medium term outlook still remain Bearish but for short term basis, market is likely to recover further. For today, pivot level for support is located around 2,852 while resistance is pegged at 2,914.


Daily Pivot Point
R2= 2914
R1= 2898
S1= 2852
S2= 2822

 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.