Market Overview 9th Aug 2012

Thursday, 9th Aug 2012. The FBM KLCI closed higher as bargain hunting kicks in after some positive export data reported for the June period. Other news to follow.

"- U.S. stocks on Wednesday barely managed to extend a winning run, with the Dow industrials and S&P 500 ending higher for a fourth day as Wall Street adopted a cautious tone. The Dow Jones Industrial AverageDJIA +0.05%  climbed 7.04 points, or less than 0.1%, to 13,175.64, with 19 of its 30 components gaining, led by Hewlett-Packard Co. HPQ +2.37% , up 2.4% after the company hiked its third-quarter earnings forecast. The S&P 500 index SPX +0.06%  rose 1 point to 1,402.22, with consumer staples the best performing and consumer discretionary the worst among its 10 sectors. The Nasdaq Composite Index COMP -0.15%  fell 4.61 points to 3,011.25."

"- Asia markets rose Wednesday, with the resource sector helping most regional benchmarks complete a three-day winning streak amid hopes for further U.S. monetary easing, though Chinese shares lagged on caution a day before key economic data. Japan’s Nikkei Stock Average JP:100000018 +0.88%  climbed 0.9%, South Korea’s KospiKR:SEU +0.87%  rose 0.9%, Australia’s S&P/ASX 200 Index AU:XJO +0.49%  advanced 0.5% and Taiwan’s Taiex XX:Y9999 +0.33%  gained 0.3%. Chinese stocks put in a less impressive performance, with Hong Kong’s Hang Seng IndexHK:HSI -0.04%  ending marginally lower, while the Shanghai Composite IndexCN:000001 +0.16%  edged up 0.2% to 2,160.99 after a choppy afternoon session."

"-Crude-oil futures ended lower on Wednesday, snapping a three-day winning streak and relinquishing gains posted after a larger-than-expected decline in inventories. It was a last-minute reversal for the commodity, which traded at its highest in more than two months for most of the session. Crude for September deliveryCLU2 -0.03%  retreated 32 cents, or 0.3%, to end at $93.35 a barrel on the New York Mercantile Exchange."

"-August Soybeans finished up 24 3/4 at 1630, 1/4 off the high and 28 up from the low. November Soybeans closed up 15 1/2 at 1581 1/4. This was 26 up from the low and 1 3/4 off the high. August Soymeal closed up 9.6 at 521.9. This was 10.6 up from the low and 0.6 off the high. August Soybean Oil finished up 0.29 at 51.58, equal to the high and 0.42 up from the low. November soybeans traded sharply higher into the close after trading lower early in the session. The USDA reported that private exporters sold 140,000 tonnes of US soybeans to an unknown destination for the 2012/13 marketing year this morning. The trade believes the sale was made to China. The weather outlook for the Midwest is unchanged from yesterday with temperatures moderating in the northern and eastern Midwest. The southern and southwestern Midwest will remain hot and temperatures could spike to 95-100 next week. Rain fell in parts of Nebraska and Iowa overnight which may have helped soybeans but a third of the Corn Belt will likely remain stressed heading into next week. Recent rainfall in northern Delta has also benefited double crop soybeans after a rough start. Scattered showers are expected for parts of the central and eastern Midwest to finish out this week. Outside markets were mostly mixed to negative early but turned more positive late in the day."

FKLI- Going Back Into Previous Range. 

Stock index regain its footing when it mange to recover after a late sell-off on previous Tuesday sessions. Resurrected from the ashes due to previous sell-off, BAT manage to recover yesterday. Overall, the mild rebound was contributed by BAT and Petronas counters. At close, the FBM KLCI went up about 4.80 points to 1,635.92 while on the contrary, spot month contract closed 5 points lower to 1,635. Good news was the stock index positive momentum is still intact but bad news as the story is quite different for index futures. Technically, there was a first sight of lower high formation on the spot month index futures when the market closed lower yesterday. Although it is still too early to tell whether the index futures will correct further from here, it is a early Bearish sign every trader must take note. What is more likely to happen on the index futures for this week would be trading within the 1,644~1,620 range for the moment. 

Daily Pivot Point
R2= 1642
R1=1638
S1= 1632
S2= 1630

FCPO- Breaking Down, New Low Created. 

CPO futures breaking the new low yesterday as market continue to trade lower throughout the session. Although it was a slow decline, the market continue retrace steadily right from its opening bell until the closing. Weak price outlook on Soy oil also contributed palm oil futures to continue heading down. The most active traded month on Soy oil went down to 51.50 cents per pound during Asia trading time, 6.00pm +8GMT yesterday. Even though it is a clear cut scenery that showed the benchmark Oct is hovering on Bearish mode ever since the market move into sideways range 4 sessions ago, there might be some mild recovery soon. Reason behind this could due to bargain hunting or accumulation activities due to oversold condition and mild profit taking when the Short holders cover their positions. But bear in mind that, the conditions mention just now would not materialize if the Soy oil continue to dip overnight. Market can just open gap down the next day if there was some sell-off on overnight Soy oil. Conclusively, down side risk would be magnified if the benchmark Oct breach below the major support level around 2,835. For today, immediate support is located around 2,863 followed by 2,835~2,830 while resistance is pegged at 2,920.  

Daily Pivot Point
R2= 2944
R1= 2920
S1= 2863
S2= 2830
 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.