Tuesday, August 14, 2012

Market Overview 15th Aug 2012

Wednesday, 15th Aug 2012. The FBM KLCI ended in record high reading amid recent positive economy data on Europe. More news to follow.

"-U.S. stocks lost hold of their meager gains Tuesday as markets headed to a close following a report that Greece was looking for an extension to implement austerity programs.

The Dow Jones Industrial Average DJIA +0.02%  closed up 2.71 points, or less than 0.1%, to 13,172.14, after trading as much as 53 points higher earlier in the session. In the final half-hour of trading, the Dow was down as much as 27 points. On the other hand, the S&P 500 SPX -0.01% fell 0.18 points to close at 1,403.93, as consumer staples and discretionary stocks sought to keep the index afloat. It was down as many as 3.5 points in the final half-hour of trading. The Nasdaq Composite Index COMP -0.18%  declined 5.54 points, or 0.2%, to finish the day at 3,016.98."
"-Asian markets rose Tuesday as investors continued to hope global central banks will provide stimulus to support growth, with Hong Kong stocks extending gains in afternoon trading in response to better-than-expected economic data from Europe. South Korea’s Kospi KR:SEU +1.27%  climbed 1.3%, Japan’s Nikkei Stock AverageJP:100000018 +0.50%  rose 0.5%, Australia’s S&P/ASX 200 Index AU:XJO +0.21%  gained 0.2% and Taiwan’s Taiex XX:Y9999 +0.58%  advanced 0.6%. China’s Shanghai Composite Index CN:000001 +0.30% , which had tumbled 1.5% in the previous session, rebounded 0.3% on relief buying. Hong Kong’s Hang Seng Index HK:HSI +1.05%  finished 1.1%, aided by a positive start to European markets after Germany and France reported better-than-expected second-quarter economic growth."

"-August Soybeans finished up 23 3/4 at 1680, 10 off the high and 20 3/4 up from the low. November Soybeans closed down 2 3/4 at 1598. This was 11 up from the low and 15 off the high. August Soymeal closed up 4.5 at 530.8. This was 3.0 up from the low and 3.3 off the high. August Soybean Oil finished down 0.12 at 52.83, 0.19 off the high and 0.03 up from the low. November soybeans traded slightly lower into the close but managed to settle off session lows made this morning. Soybean oil traded lower on the day while soybean meal saw slight gains. Early losses were linked to a slightly cooler weather outlook for the Midwest and technical sell pressure. July NOPA crush was reported at 137.4 million bushels vs. 134.2 in June. The crush estimate was much better than trade expectations at 132.5 million bushels. Rising food prices in China have traders expecting more soybean imports in the near future. This has strengthened cash soybean levels along the Mississippi River and in export channels providing a lift to futures. A closely followed crop advisor revised his US average soybean yield to 36 bushels/acre vs. 38 in his last estimate. US soybean export sales for the 2012/13 (next) marketing year are already more than 50% of the current USDA estimate vs. the 5 year average of just 22%. The sharply lower production in South America continues to push export demand to the US market. Analysts believe this trend could last well into 2013 causing US supply to tighten further given the lower US production forecast."

FKLI- Resuming Upside Momentum. 

The market are resuming  positive momentum as stock index and index futures manage to hit their all time high yesterday. At close, the FBM KLCI rose about 6.58 points to 1,652.90 while the spot month contract went up about 2.50 points to 1,651.50 level, volume for the spot month index was traded thin. Even though the volume does not justify it is upside break out as there was no impulsive or aggressive volume recorded when the index futures hit all time high, it is enough to justify that the higher lows and higher high have successfully formed. In a nutshell, a successful formed higher lows and higher high usually marks a re-new upside momentum, especially the one that accompanied with new high. Usually the tendency of more new highs to be created is higher if the market manage to survive a few waves of mild corrections and then recover above its previous high, thus the formation of higher lows and higher high is formed. Stock index should be continue to hover on positive tone throughout this week. For today, pivot support for spot month contract is located around 1,648 while resistance is pegged at 1,656,

Daily Pivot Point
R2= 1656
R1= 1653
S1= 1648
S2= 1645

FCPO- Fail Upside Swing

The inability for the CPO futures to recover was probably due to excessive stocks level and sluggish demand. At the same time, previous Soy oil price surge effect was quickly nullified as well. Weak fundamental have much weighed down palm oil prices to recover for months and it will continue to do so as we do not see any hint for improve shipment for the upcoming export figures report. Dry weather will also improve harvesting output. All these will curb palm oil price to recover for the long run. Meanwhile, Soy oil prices is hammered by possible increase in harvest forecast due to recent rainfall in the west. Shifting to the technical side of the story, the outlook remain grim as there most of the recovery made  in the early session was quickly wipe off the next hour. Sellers are still aggressive in the long run as prices seem to be comfortable to fall. For this week, Selling spree is likely to materialize as the benchmark Oct has breach its two months low that use to serve as major support level. The palm oil export figures report on Aug 15th will be watched as further correction is likely to occur if the export figures continue to deteriorate. For today, pivot support level for the benchmark Oct is located around 2,806 while resistance is pegged at 2,872.

Daily Pivot Point
R2= 2886
R1= 2872
S1= 2832
S2= 2806

 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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