Wednesday, August 1, 2012

Market Overview 2nd August 2012

Thursday, 3rd August 2012. The FBM KLCI closed unchanged yesterday as regional market ended in miexed note ahead of ECB and Federal Reserve monetary decision later tonight.

"-U.S. stocks fell Wednesday after the Federal Reserve held pat on monetary policy and paved the way to further stimulus, with investors bracing for a gathering of European central bankers. The Dow Jones Industrial Average DJIA -0.29%  retreated 32.55 points, or 0.3%, to 12,976.13. The S&P 500 index SPX -0.30%  lost 4 points, or 0.3%, to 1,375.32, with energy the best performing and utilities the worst of its 10 major industry sectors. The Nasdaq Composite COMP -0.66%  fell 19.31 points, or 0.7%, to 2,920.21."

"- A number of Asian stock markets declined Wednesday after data showed manufacturing activity deteriorated in several countries in the region, with caution also setting in ahead of this week’s monetary policy decisions in the U.S. and Europe. Mainland Chinese stocks rebounded amid expectations that Beijing may further relax its policies, and after the country’s securities regulator encouraged listed firms to buy back shares. Japan’s Nikkei Stock AverageJP:100000018 -0.61%  fell 0.6%, Australia’s S&P/ASX 200 index AU:XJO -0.15% declined 0.2%, South Korea’s KospiKR:SEU -0.11%  slipped 0.1% and Taiwan’s Taiex XX:Y9999 -0.03%  ended marginally lower.

China’s Shanghai Composite IndexCN:000001 +0.94% , which finished at its lowest level since March 2009 in the previous session, climbed 0.9%, providing a lift to shares of mainland firms traded in Hong Kong. The Hang Seng Index HK:HSI +0.12% ended 0.1% higher."


"-August Soybeans finished down 38 3/4 at 1682 1/4, 53 3/4 off the high and 31 1/4 up from the low. November Soybeans closed down 12 at 1629. This was 33 1/4 up from the low and 31 off the high. August Soymeal closed down 7.5 at 537.2. This was 19.9 up from the low and 12.8 off the high. August Soybean Oil finished down 0.82 at 51.73, 1.25 off the high and 0.03 up from the low. The soybean complex closed well off session lows after climbing higher late in the session following the announcement by The Federal Reserve that they would leave interest rates unchanged. The August contract lost to the September and November contracts as bull spreads unwound. August soybean meal and soybean oil traded sharply lower on the day. Weather maps suggested a slightly wetter forecast for the next week but market confidence is low that the forecast will successfully develop. The forecast also called for slightly cooler temperatures in the central Midwest next week. Temperatures are expected to stay warm in the southwestern portion of the Corn Belt. Soybean volume has been slightly lower to the start the week and traders were looking to take profits ahead of the USDA report next week and the European Central Bank meeting tomorrow. The next two weeks remain critical to the soybean yield potential for the 2012/13 marketing year. Good support was seen towards the end of the trading session which suggests speculators and end users found good value at the sharply lower price levels, given the weather forecast over the next two weeks."

FKLI- Some Hurdles On The Top 

The stock index did not budge much from its previous close yesterday as investors prefer to stay at sideway awaiting major monetary announcement from European central bank and U.S federal reserve on 2nd August.   Most trader are awaiting for these news as it will directly effect how the economy will shape up if there is any major adjustment to the monetary policy. Technically, the index futures will require more recovery movement above 1,640 to confirm the candle formation of higher lows on daily chart. If the market fail to achieve this feat and retrace, swift correction is likely to occur if the market fell below the 1,620 level. If this event materialize, it could be different story all together as the candle formation would form the first set of lower high and lower low instead. For today, pivot point for support is located around 1,624.50 while resistance is pegged at 1,638.

Daily Pivot Point
R2= 1642.50
R1= 1638
S1= 1629
S2= 1624.50

FCPO- Unsustainable Gain On Soya Oil Dragged Down Palm Oil Futures. 

Commodities prices are getting all anxious on the major monetary policy decision on ECB and Federal Reserve later on 2nd August. The most active traded Soy oil was traded 0.07 cent lower to 52.72 cents per pound during Asia trading session yesterday, 6.12PM +8GMT, it was traded at 53.20 cents per pound on early morning session before it took the plunge. Mean while tracking the Soy oil performance, the benchmark Oct was traded RM35 lower to 2,941, the high and the low of the day was 3,000~2,924 respectively. Palm oil futures is likely tracking closely the price action on Soy oil when it dropped massively on the last hour before the closing bell. Technically, the medium term Bullish momentum mentioned on previous post due to upside break out is now jeopardize by recent swift correction which force the benchmark Oct to dipped down to 2,924 level yesterday. Traders are advised to watch out as there were two lower highs formed on hourly chart shown above. On the contrary, Bullish technical outlook still intact on daily chart even though there is a major retracement occur yesterday. For today, pivot support is located around 2,880 while resistance is pegged at 3,032.

Daily Pivot Point
R2= 3032
R1= 2988
S1= 2912
S2= 2880
 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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