Market Overview 7th Sept 2012

Friday, 7th Sept 2012. The FBM KLCI plunged down after it hit new high early this week. Other news to follow.

"- U.S. stocks rallied to close at multi-year highs Thursday after European Central Bank President Mario Draghi followed up on his promise to protect the euro and outlined a large bond-buying plan. The Dow Jones Industrial Average DJIA +1.87%  surged 244.52 points, or 1.9%, to close at 13,292.00, its highest close since Dec. 28, 2007. The S&P 500 Index SPX +2.04%  rose 28.68 points, or 2%, to close at 1,432.12, the highest close since Jan. 3, 2008. Of the 10 sectors in the S&P 500, materials, financials and tech stocks led the gains. For the Dow and the S&P 500, Thursday was largest one-day percentage gain for both indexes since June 29. The Nasdaq Composite Index COMP +2.17%  jumped 66.54 points, or 2.2%, to 3,135.81, its highest close since Nov. 15, 2000."

"- Asia stocks ended higher Thursday, with investors looking ahead to a European Central Bank meeting later in the trading day, where officials are expected to put forward a broad strategy to tackle the region’s crisis. Australia’s S&P/ASX 200 Index AU:XJO +0.80%  gained 0.8%, South Korea’s KospiKR:SEU +0.38%  added 0.4%, and China’s Shanghai Composite CN:000001 +0.70%  rose 0.7%. Hong Kong’s Hang Seng Index HK:HSI +0.34%  closed 0.3% higher, rebounding after closing at a six-week low in the prior session, and Japan’s Nikkei Stock AverageJP:100000018 +0.0086%  ended little changed."

"- Oil and natural-gas stocks moved sharply higher Thursday, buoyed by crude oil’s brief leap past $97 a barrel and a 245-point rally for the Dow Jones Industrial Average. The broad-based equities rally followed European Central Bank President Mario Draghi’s statement that the region’s policy makers had agreed to buy as many government bonds as needed to bring under control Europe’s sovereign-debt crisis and rebuild confidence in the euro. October crude-oil futures CLV2 -0.85%  advanced 17 cents to end the day at $95.53 a barrel on the New York Mercantile Exchange.

"-November Soybeans finished down 1/2 at 1747, 6 3/4 off the high and 21 1/2 up from the low. January Soybeans closed down 1/2 at 1745 3/4. This was 21 1/2 up from the low and 5 1/2 off the high.

December Soymeal closed up 3.1 at 528.1. This was 8.6 up from the low and 1.7 off the high. December Soybean Oil finished down 0.59 at 57.38, 0.78 off the high and 0.24 up from the low. November soybeans struggled to find support throughout the day and settled slightly lower into the close. Soybeans found marginal support midday after the US Dollar turned lower and wheat surged to new session highs. However, a better than expected private estimate for the 2012/13 soybean yield and production triggered profit taking last night, and the pressure leaked over to today's session. Basis remains weak in domestic markets and steady to weaker in the Gulf of Mexico. Some traders are expecting farmers to sell new crop bushels right away due to the historically high futures levels. Underlying support continues to come from thoughts that current price levels have not rationed demand and on the assumption that while soybean plants look good from the road, recent crop tours have suggested that pod counts are very low."

FKLI- Plunge As Major Support Breached.

The equity index tumbled for another sessions big time amid panic Sell-off that saw prices on almost all blue chips stocks start to fell yesterday. At close, the FBM KLCI went down about 23.02 points to 1,617.99 while index futures for spot month contract loss about 23.50 points to 1,611.50, the day low was located at 1,606 level. Volume for the spot month was traded historically higher to 13,261, this is a record high figures ever saw in a outright month. Any single market has characteristic on its own and it is wise that the trader himself does not always relate or attempt to correlate it's upcoming behaviour based on other market, not even regionally. For the book, this will be the the spot month index futures highest drop in one session this year. Technically, the spot month index futures quickly reverse its role from positive to negative after just one session closing below 1,640 level. To make things worse, this is not any ordinary drop but rather something big is forming as it has breached below major support level around 1,618 level. For the mean time, market medium term direction has undoubtedly changed to negative or Bearish. Even though we are currently looking at more Bearish candle formation on the spot month contract, market could slowly repeating the same candle formation identical to previous May 2012. On the end of May, spot month index futures starting recover after some swift correction. 

Daily Pivot Point
R2= 1645
R1= 1628
S1= 1600
S2= 1588


FCPO- Break Away Gap Down On Daily Chart

Palm oil futures finished lower yesterday amid continues Selling pressure on Soy oil and concern over higher stock on the upcoming MPOB report. The benchmark Nov dip about RM42 to 2,948, the day high and low were 2,969~2,913 respectively. Volume for the benchmark month climbed significantly to 23,956 lots yesterday. Palm oil futures for the benchmark Nov starting off by gaping down on the opening and dipped down to 2,913 level, but soon after that, market manage to rebound and close RM35 above the low. Technically,based on daily chart the benchmark Nov might have formed a hammer candle pattern but unfortunately this hammer candle is too vague to mark the end of Bearish market nor to signifies any trend reversal for the moment. To put it in other perspective, this particular candle pattern explain that Sellers were able to outnumbered the Bulls and pushed the market down to the low but price manage to recover as Sellers beginning to take profit and cover their Short position, thus forcing the market to go up but not higher than the opening price. Further Bullish confirmation such as more price recovery above today's pivot point resistance level is required before we can identify that the Selling pressure has diminish. For today, pivot point for the benchmark Nov support level is located around 2,917 followed by 2,887 while resistance is pegged at 2,973.

Daily Pivot Point
R2= 2999
R1= 2973
S1= 2917
S2= 2887
 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.