Monday, September 17, 2012

Market Overview 18th Sept 2012 When The Dust Settle.

Tuesday, 18th Sept 2012. The FBM KLCI continue to surge for the second day straight on last Friday amid recent positive development on U.S quantitative easing. Bursa Derivative will close on this Monday 17th Sept 2012 for One Malaysia public holiday and resume for trading on Tuesday 18th Sept 2012. Other news to follow.

" U.S. stocks ended lower Monday for the first session in five as investors paused after a recent win streak lifted the indexes to multiyear highs. The Dow Jones Industrial Average DJIA -0.30%  fell 40.27 points, or 0.3%, at 13,553.10, The S&P 500 Index SPX -0.31%  slid 4.58 points, or 0.3%, at 1,461.19, with the natural-resource and financial sectors the greatest laggards and telecommunications and health care faring the best among its 10 sectors. The Nasdaq Composite COMP -0.17%  declined 5.28 points, or 0.2%, to 3,178.67."

"-Chinese stocks tumbled Monday as worries about anti-Japanese protests on the mainland, and concerns that Beijing was less likely to loosen its policies in the wake of the Federal Reserve’s monetary stimulus, damped investor sentiment. Most of the other major markets rose in the region, however, on lingering optimism a weaker dollar and a general improvement in risk appetite would spur fund inflows and support stocks.China’s Shanghai CompositeCN:000001 -2.14%  sank 2.1% its worst percentage loss since its 2.4% drop on July 9, while South Korea’s KospiKR:SEU -0.26%  fell 0.3%. Elsewhere in Asia, Australia’s S&P/ASX 200 Index AU:XJO +0.28% managed a 0.3% gain, Taiwan’s Taiex gained 0.3% and India’s Sensex advanced 0.6% in afternoon trade after the country’s central bank acted to ease liquidity. The Hang Seng Index HK:HSI +0.14%  rose 0.1%, with energy sector shares among those climbing."

"-Crude-oil futures ended 2.4% lower on Monday, turning sharply lower in the last moments of floor trading amid rumors of an oil-reserve release. Crude for October delivery CLV2 +0.40% was off $2.38 to settle at $96.62 a barrel on the New York Mercantile Exchange. Some traders also talked about a potential glitch with Nymex as prices fell more than $4 in about 20 minutes. Prices had spent most of the session mildly higher, with support from geopolitical concerns around the globe."

"-November Soybeans finished down 70 at 1669, 67 1/4 off the high and equal to the low. January Soybeans closed down 70 at 1670. This was equal to the low and 66 3/4 off the high. December Soymeal closed down 20 at 505.4. This was equal to the low and 19.1 off the high. December Soybean Oil finished down 1.98 at 55.39, 2.22 off the high and 0.27 up from the low. November soybeans closed down the daily limit or 70 cents today. January soybean meal also closed down the $20 per ton limit and soybean oil traded off limit but sharply lower on the day. Technical selling, profit taking, and new crop harvest pressure weighted on markets overnight and the downside momentum carried over to the afternoon session. A wetter forecast for areas of Northern and Central Brazil this week added to the weaker tone. Significant weakness in the Crude Oil market late in the session added to the lower trade and seemed to pressure the entire commodity complex. Some traders thought that the soybean market may be overbought and better than expected early yield reports likely forced some to take profits and head to the sideline. It was reported that US private exporters sold 210,000 tonnes of soybeans for this marketing year to an unknown destination this morning and many feel China was the buyer. Export inspections for the week ending September 13th were disappointing with only 9.96 million bushels reported vs. 12.93 the week prior. Inspections needed each week to reach the USDA estimate for this marketing year stand at 21.56 million bushels."

FKLI- Upside Likely Resume But More Price Action Is Needed. 

Bursa Derivative  was closed yesterday due to one Malaysia replacement holiday and will be resume its trading session today, Tuesday 18th Sept 2102. Equity index have a good rush to upside as regional market is getting the positive effect from U.S federal reserve decision to boost and strengthen their economy. The ripple effect from Federal Reserve to pump billions of Dollars in financial market does not stop on equity market only, but any market you can think of namely, agriculture, bonds and currencies. At close, the FBM KLCI rose about 14.55 points to 1,642.95 while spot month contract surge about 20 points to 1,638.50. Contrary, my assessment on equity index surged for the past two sessions would not due the announcement on Federal Reserve quantitative easing but rather the technical part of the market itself. On long term perspective, with its ability the recover from the low around 1,586 level to 1,643.50 level on previous Friday, this demonstrate that previous corrections were deem as a swift retracement in a uptrending market. Moreover, the ability for the market to surge above the most pivot resistance level on last Friday indicate that the Bulls will likely make a comeback. Medium term and short term technical direction are likely to turn from correction mode to recovery mode as there were another significant lower high formed on daily chart after last Friday surged. For today, the spot month contract pivot point for support level is located around 1,628 while resistance is pegged at 1,653.

Daily Pivot Point
R2= 1653
R1= 1645
S1= 1628
S2= 1619

FCPO- Sideways Before The Storm / Break Out. 

The new benchmark Dec ended last Friday session higher around RM31 to 2,993, the day high and low was 2,993 and 2.952 respectively. Volume traded for the new benchmark Dec was 10,007 lots. Market is expected to open lower today as Soy bean products had a bad correction overnight due to favourable weather that cultivate harvest in South America. A disappointing end to Friday's trading session for bulls has left soy beans vulnerable to profit taking and further downside. A slightly negative technical outlook along with early yield reports that have been surprisingly better than expected for some areas of the Corn Belt are adding to the negative tone recently. Soy bean open interest grew by 4,812 contracts last Friday and volume was recorded at 182,689 contracts. Volume has been substantial overnight on the sharply lower trade which is adding to the downside momentum. Back to palm oil futures, the new benchmark Dec is poised to have Sell-off frenzy on morning session due to current weak price outlook. Not only that, palm oil futures is likely heading downwards as the benchmark contract has approach the upper area or resistance level inside the range shown on hourly chart above. Bear in mind that we are still looking at short term sideways market before the benchmark contract could head to more trending movement if it could breach away from these range shown on chart above. Major support level will be located around 2,875~2870 today and further downside is imminent if there is any Sell-off below 2,870 level for the benchmark Dec. 

Daily Pivot Point
R2= 3018
R1= 3002
S1= 2961
S2= 2936
 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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