Tuesday, August 7, 2012

Market Overview 8th Aug 2012

Wednesday, 8th Aug 2012. Hovering at the high for the moment the FBM KLCI snapped previous gains and retrace swiftly before the closing bell yesterday. Other news to follow.

'-U.S. stocks rose Tuesday, with the S&P 500 index closing above 1,400 and the Nasdaq Composite atop 3,000 for the first time since May, on the view the recovery would survive Europe’s financial crisis and other pitfalls. The benchmark indexes rose for a third session, with the Dow Jones Industrial Average DJIA +0.39%  climbing as many as 98 points before finishing 51.09 points higher, a gain of 0.4%, at 13,168.60. The S&P 500 index SPX +0.51%  added 7.12 points, or 0.5%, to 1,401.35, with energy pacing gains that had the index surpassing 1,400 for the first time since early May. The Nasdaq Composite COMP +0.87%   climbed 25.95 points, or 0.9%, to 3,015.86, its first finish above 3,000 since May 3."

"-Asian stocks climbed Tuesday, extending recent gains on mounting hopes that the European Central Bank may buy Spanish and Italian bonds to ease debt-related stresses in the euro zone.

After gaining 2% the previous day, the Japanese Nikkei Stock AverageJP:100000018 +0.88%  advanced 0.9% and Australia’s S&P/ASX 200 Index AU:XJO +0.44% gained 0.4%. Hong Kong’s Hang Seng Index HK:HSI +0.37%  rose 0.4%, as Esprit Holdings Ltd. surged after announcing the appointment of a new chief executive. The gains helped offset the impact from China Life Insurance Co.’s profit-warning and a slide in Standard Chartered PLC after a New York regulator accused the bank of hiding transactions related to Iran. Lagging behind, South Korea’s KospiKR:SEU +0.05% and Taiwan’s TaiexXX:Y9999 +0.13%  and China’s Shanghai Composite Index CN:000001 +0.13% each rose 0.1%."

"-- Crude-oil supplies declined 5.4 million barrels in the week ended Aug. 3, a trade group reported late Tuesday. The American Petroleum Institute also said inventories of gasoline rose 417,000 barrels, while stockpiles of distillates rose 2.4 million barrels. The API report comes a day before data from the Energy Information Administration. Analysts polled by Platts have expected a decline of 300,000 barrels for crude stockpiles, as well as a retreat of 2 million barrels for gasoline supplies and an increase of 1 million barrels for distillates inventories. September crudeCLU2 -0.35% rose to its highest in more than two months on Tuesday, settling at $93.67 a barrel."

"-August Soybeans finished down 2 1/4 at 1605 1/4, 22 1/4 off the high and 2 1/4 up from the low. November Soybeans closed down 18 1/2 at 1565 3/4. This was 3 3/4 up from the low and 39 3/4 off the high. August Soymeal closed down 5.9 at 512.3. This was 1.0 up from the low and 10.5 off the high. August Soybean Oil finished down 0.19 at 51.29, 0.71 off the high and 0.01 up from the low. Soybeans bounced midday but long liquidation was ultimately too much for bulls. November soybeans turned sharply lower near noon and ended the day near the session lows. Reports that China purchased 4 cargos of US Soybeans were pushed aside as profit taking was the featured trade today. A closely followed crop scout left his average US soybean yield unchanged at 38 bushels per acre citing relief from recent rainfall in the east. While last week's rainfall was beneficial to some areas of the Corn Belt, others remain dry. Temperatures are expected to moderate for most of this week but another round of 90-100 degree temperatures are expected next week for the central and southern Midwest. A chance of better rain for parts of the Corn Belt next week offered resistance. One market analyst suggests soybean stocks for major exporters in South America have fallen to 45.4 million tonnes, or a 22.5 million tonnes drop from a year earlier. This has raised questions as to if Brazil soybean crushers will need to import soybeans from neighboring countries to support their local livestock industry. The US Dollar traded slightly lower and crude oil was higher, adding slight support to the commodity complex midday. "
FKLI- Flight Or Plunge ? 

The equity index suddenly correct significantly right before the closing bell yesterday as local funds dumped BAT and profit taking on Tenaga and Petronas Chemicals pushed the FBM KLCI into the red. As a result, the stock index dipped about 8.31 points to settled at 1,631.12 while index futures for Aug contract closed unchanged at 1,640.50. Most of the investors are not convinced over the recovery that went on U.S market as the Dow Jones and Nasdaq have breach over 13,000 level and 3,000 respectively recently. Correlation on other major market might not be the significant reason for our market to move, but somehow most market will eventually correlate on longer term. Technically, its either flight or plunge scenario for the index futures as the market is still hesitating to recover even though it has breached above previous resistance level around 1,640. What does the spot month contract has done so far was merely testing the 1,640~1,645 level for these two days without the sight of making higher high. It seems that the market is still waiting for some sort of "push" or news to move massively. Overall, market is still hovering on Bullish momentum at the moment even though there is a lot of interference or retracement occur within the smaller time frame chart.  

Daily Pivot Point
R2= 1648
R1= 1644
S1= 1636
S2=1632

FCPO- Going To Be Weaker, Slowly. 

Market has been moving lower for the past few days even though it is travelling within the range. Buyers would not be able to overcome current down trending market as price always get pushed back down after the market gapped up in the morning session. Hardly can find any trending occasion on short term intraday time frame as market always move indecisively. But this is the moment where short term trader loved as they could find themselves nice entry and exit timing with just using a simple stochastic indicator. Any types of traders will have their own best time, and for those who are trading on long term time frame, you might want to hold your Short position longer as market is trending down and pay attention to support level for those who still holding their Long positions. With market travelling sideways for at least 4 trading days, this is an indication of forthcoming explosive break out, which is likely to be downside break out. To achieve this, the benchmark Aug need to breach below previous low or major support level around 2,880 level. A price that could breach its previous week low level would likely indicate re-new Selling pressure. Conclusively, be prepare as the "storm" is coming as market has to make new low / new high after travelling within the sideways market for some time.


Daily Pivot Point
R2= 2953
R1= 2930
S1= 2890
S2=2873

 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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