Thursday, September 27, 2012

Rebounded Off From The Low, Bearish Mode Intact. 28th Sept 2012

Friday, 28th Sept 2012. Both stock index and commodities futures manage to snap previous Sell-off yesterday as market recover from oversold reading. Other news to follow.

"- U.S. stocks rose sharply Thursday, with the S&P 500 index rebounding after a five-session losing spell, after Spain detailed an austerity plan that focuses on spending cuts instead of tax increases and stronger-than-expected data on the U.S. jobs market. Dialing back from a 109-point advance, the Dow Jones Industrial Average DJIA +0.54%   ended up 72.46 points, or 0.5%, to 13,485.97, with 23 of its 30 components advancing. Snapping its longest loss streak since July, the S&P 500 SPX +0.96%   added 13.83 points, or 1%, to 1,447.15, with technology, energy and financials leading gains that included all but utilities of its 10 major sectors. Both the Dow and S&P 500 had their best session since the Federal Reserve two weeks ago said it would engage in a third round of quantitative easing, this time with monthly purchases of mortgage-backed securities. The Dow is up 4.7% for the nearly ended quarter; the S&P 500 is ahead 6.2%. The Nasdaq Composite COMP +1.39%   climbed 42.90 points, or 1.4%, to 3,136.60, leaving it up 6.9% for the third quarter, with one trading session remaining."

Trading futures involve taking high risk for higher return.

"- Chinese stocks surged on Thursday to lead in an upbeat session for Asian markets, amid reports the country’s central bank injected a record amount of liquidity into the banking system.
China’s Shanghai Composite CN:000001 +2.60%  soared 2.9% in afternoon trading, and Hong Kong’s Hang Seng Index HK:HSI +1.14%  gained 1.2%. Elsewhere in the region, Japan’s Nikkei Stock Average JP:100000018 +0.48% and Australia’s S&P/ASX 200 Index AU:XJO +0.52%  gained 0.5% each, while South Korea’s KospiKR:SEU +0.42%  rose 0.4%."

"- Crude-oil prices rose on Thursday, pushing past $91 a barrel on a rebound from eight-week lows in previous sessions, as traders’ fears resurfaced over Iran. Crude futures for November delivery CLX2 +0.50%  rose $1.87, or 2.1%, to settle at $91.85 a barrel on the New York Mercantile Exchange, oil’s highest finish in a week and first gain in three sessions."

"-November Soybeans finished down 2 1/4 at 1570 3/4, 13 1/4 off the high and 13 1/4 up from the low. January Soybeans closed down 3 at 1571 1/4. This was 12 1/2 up from the low and 13 3/4 off the high. December Soymeal closed down 3 at 473.9. This was 3.0 up from the low and 5.9 off the high. December Soybean Oil finished up 0.47 at 52.58, 0.26 off the high and 0.55 up from the low. November soybeans traded slightly lower on the day but traded both sides of the unchanged near midsession. Early weakness in soybeans was linked to profit taking ahead of tomorrow's USDA report as well as a weak technical outlook. Early support was seen in the market after the USDA reported that US exporters sold 110,000 tonnes of US soybeans to China for 2012/13 marketing year. Furthermore, net weekly export sales for soybeans came in at 799,500 tonnes for the current marketing year and none for the next marketing year. As of September 20th, cumulative soybean sales stand at 77.5% of the USDA forecast for 2012/2013 marketing year vs. a 5 year average of 41%. Sales of only 131,000 tonnes are needed each week to reach the USDA forecast. Total net soybean meal sales came in at 436,400 tonnes while total soybean oil sales came in at 16,100 tonnes. The US Dollar traded weaker for most of the day and outside markets bounced from yesterday's sharp selloff. Both of these factors helped limit losses early in the session."
FKLI- Hitting The Upper Range

Stock index and index futures manage to record another gains yesterday after the market recover from previous Sell-off. It is still early for the market to viciously correct from here, maybe we will have better picture if the index futures retrace and formed another lower high from daily chart. At close, the FBM KLCI went up about 8.54 points to 1,627.84, while spot month contract recovered about 15.50 points to 1,633.50, the day high and low was 1,636 and 1,615 respectively. Majority of the volume was contribute by Sept and Oct spread as traders are rolling over their positions before the expiry date. Even though the index futures manage to recover yesterday, it has hit the upper range or the resistance trend line shown as daily chart above. Traders may have tougher time to push the market higher today as the market is still travelling in a ranging condition and the spot month contract have hit the resistance trend line, which is is located around 1,633 level. Bear in mind the stock index is likely peak out as mentioned in previous post with no new high form after numerous attempt early this month. Downside risk will expand if there is any retracement today. For today, pivot support level for the Oct contract is located around 1,622 while  resistance is pegged at 1,644.  

Daily Pivot Point
R2= 1653
R1= 1644
S1= 1622
S2=1609

FCPO- Bounced Off From The Low, Temporary Recover. 

CPO futures closed slightly lower yesterday after the benchmark Dec manage to recover up to 2,634 level. Even though the benchmark Dec has recovered from the low of 2,569 yesterday, further upside for palm oil futures remain gloomy as weak fundamental shroud most chances for major recovery. Upside potential is limited for Soy oil too as supplies build up and slower demand from China recently. Palm oil inventories will continue to expand seasonally for the coming months and this reason alone will spur further weakness over time. Technically, the benchmark Dec still does not safe from further price correction even though it recovered after hitting its 24th Sept previous low. However, this technical recovery may last longer if the benchmark Dec manage to beach the immediate resistance level around 2,700, shown on the hourly chart above. Else, palm oil futures is likely having another vicious Selling spree if the benchmark contract made another new low around 2,568 level today. So far, no promising sign for medium term recovery yet as market kept on creating lower highs candle formation which signifies Bearish price action. For today, pivot support level for the benchmark Dec is located around 2,572 while resistance is pegged at 2,637.

Daily Pivot Point
R2= 2668
R1= 2637
S1= 2572
S2= 2538
 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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