Market Overview 11th Sept 2012

Tuesday, 11th Sept 2012. Stock index continue to weaken despite government intervention on boosting economy stability and growth on U.S and Europe. Other new to follow.

"-U.S. stocks ended near session lows on Monday after a late-session selloff marked by a flurry of headlines about Spain's debt crisis and a 3.8% drop in Intel Corp. INTC -3.84% . The Dow Jones Industrial Average DJIA -0.39% fell 52.35 points, or 0.4%, to 13,254.29. The S&P 500SPX -0.61% lost 8.84 points, or 0.6%, to 1,429.08. The Nasdaq Composite COMP -1.03%dropped 32.40 points, or 1.03%, to 3,104.02. Late in the session, Spanish Prime Minister Mariano Rajoy was quoted as saying Spain hasn't decided whether to request aid from the European Central Bank."

"- Most of the major Asian markets ended higher on Monday on expectations for policy stimulus from the U.S. and China, with shares of several regional firms exposed to Chinese growth among gainers. Hong Kong’s Hang Seng Index HK:HSI +0.13%  added 0.1%, Australia’s S&P/ASX 200 indexAU:XJO +0.18%  rose 0.2%, the Shanghai Composite Index CN:000001 +0.34%  gained 0.3% and Taiwan’s Taiex XX:Y9999 +0.78%  advanced 0.8%. Japan’s Nikkei Stock Average JP:100000018 -0.03%  ended fractionally lower, while South Korea’s Kospi KR:SEU -0.25%  slipped 0.3%."

"-Crude futures on Monday staged a last-minute comeback, ending modestly higher as traders weighed evidence of lagging demand for the commodity in China and the likelihood of potential stimulus in the United States. Investors also parsed out comments by Saudi Arabia’s oil minister that supply and demand fundamentals do not justify the current high price of oil. In the absence of key macroeconomic reports and ahead of the U.S. Federal Reserve’s meeting and the supplies report later in the week, there was “lack of commitment” from traders, according to Matt Smith, an analyst with Summit Energy. Crude futures for October delivery CLV2 -0.34%  advanced 12 cents, or 0.1%, to $96.54 a barrel on the New York Mercantile Exchange. Oil traded as low as $95.34 a barrel earlier."

"-November Soybeans finished down 17 3/4 at 1718 3/4, 25 1/2 off the high and 2 3/4 up from the low. January Soybeans closed down 17 1/2 at 1718 1/4. This was 1 1/2 up from the low and 24 3/4 off the high.

December Soymeal closed down 7.5 at 519.4. This was 0.9 up from the low and 9.9 off the high. December Soybean Oil finished down 0.1 at 56.56, 0.5 off the high and 0.34 up from the low. November soybeans traded sharply lower on the day and losses were extended to Soybean oil and soybean meal. Soybean futures saw a boost in early trade on a better than expected export forecast for Malaysian Palm Oil. However, gains were limited after the Malaysian Palm Oil Board estimated a 5.8% increase in August palm oil stocks from the month prior. Chinese August soy imports were reported at 4.42 million tonnes vs. 5.87 in July, which is a 6 month low. While the sharp decline in imports is considered slightly bearish, a pullback was likely expected at some point after reaching a 25 month high in July. Thoughts that the market is expecting a soybean yield near 35.7 bushels per acre and production near 2.66 billion bushels on this week's USDA report which is down about 35 million bushels from last month is supportive to price action. Export inspections for the week ending September 6th were pegged at 12.9 million bushels which was slightly below trade estimates of 13-17 million bushels. Inspections needed each week to meet the current USDA forecast for the 2012/13 crop year is 21.34 million bushels. Inspections offered limited direction to prices today as traders reposition ahead of Wednesday's crop report."

FKLI- No Sign Of Recovery Yet. 

Equity index continue its negative momentum and there is yet any promising sign of market rebound so far. The FBM KLCI continue to head south about 3.51 points to 1,621.04 level while spot month index futures went down about 7 points to 1,608, no new low were created from both of these instrument. Overall short term outlook on our equity index remain weak as there is no telling where is the tail of this correction, it could go another 50 points lower from here before it come to complete stop and resume uptrend. But this is just an  guess, more practical guess can be found on 1,600, which is a psychological support on located on spot month index futures. Things could get worse if the psychological support get broken because long term technical perspective will likely change from positive to negative if this event materialize. Trader are not advise to "catch the falling knife" if the market continue to drop the next day just because it oversold or it is cheap, or even because other major market or regional market is rising. Correlation will  be a "pain in the arse" guide to follow at the moment. For today, pivot point for support level is located around 1,602~1,600 while resistance is pegged at 1,616.

Daily Pivot Point
R2= 1624
R1= 1616
S1= 1602
S2= 1597


FCPO- First Sight Of Further Price Recovery

Even though palm oil futures ended slightly higher yesterday, it was enough to justify possible further recovery in the making. At close, after starting off lower in the morning session,the benchmark Nov went up about RM10 to settle higher at 2,937, day high and low was traded at 2,947~2,897 level. Soy oil for Oct contract was traded up marginally about 0.11 cents to 56.35 cents per pound at 6.51pm +8GMT. Yesterday higher closed was crucial to identify market support level which roughly located around 2,897 level and more important point here was to demonstrate how market is able to recover further from here. With negative technical outlook still remain on medium term perspective, what is going to change here was the palm oil futures short term direction. Market is now going to recover further soon based on the higher lows and higher high formation formed on 15 minutes chart. To put it in another words, Selling pressure was successfully nullified  when the market dropped down to 2,897 level and then recover up to 2,947 before the closing bell and there was no attempt to Sell-off the market after that. It is crucial to see which party close the day, and for this instances, it was the Bulls who dominate the closing yesterday. Pay attention to pivot resistance level as this recovery might turn out to be a short live one if Soy oil continue to close weaker tonight. Major support around 2,900~2,987 level will be the last defence for short term market recovery, all hope for recovery would be lost if the market dip down below this previous low.

Official Report:
Malaysia Sept. 1-10 Palm Oil Exports 453,302 Tons, up 27% -Intertek
Malaysia Sep 1-10 Palm Oil Exports 460,939 Tons, up 30% on Month -SGS

*Malaysia’s August Palm Oil Exports 1.43 Mln Tons; Up 10% on month -MPOB

*Malaysia Aug CPO Output 1.66M Tons; Down 1.7% on Month -MPOB

*Malaysia’s End-Aug Palm Oil Stocks 2.12 Mln Tons; Up 5.8% on month -MPOB

Daily Pivot Point
R2= 2977
R1=2957
S1= 2907
S2= 2877
 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.