Tuesday, September 25, 2012

Stock Index Peak Out, Commodities Under Pressure 26th Sept 2012

Wednesday, 26th Sept 2012. Stock index is heading for some indecisive sessions this week as investors are unsure about current market sentiment that had mixed up pretty bad. Other news to follow.

"-The S&P 500 suffered its worst day since June on Tuesday, pulled lower by Caterpillar Inc (CAT.N) after it cut its profit outlook, the latest high-profile company to warn about profit growth. The Dow Jones industrial average .DJI was down 101.37 points, or 0.75 percent, at 13,457.55. The Standard & Poor's 500 Index .SPX was down 15.30 points, or 1.05 percent, at 1,441.59, its fourth day of losses. The Nasdaq Composite Index .IXIC was down 43.06 points, or 1.36 percent, at 3,117.73."

One of my education seminar in Bursa Derivative back in 2011
"- Renewed concerns about global growth soured market sentiment in Asia on Tuesday, notably weighing on commodity, construction and shipping firms. South Korea’s Kospi KR:SEU -0.60%  fell 0.6%, Australia’s S&P/ASX 200 indexAU:XJO -0.29% lost 0.3%, and the Shanghai Composite Index CN:000001 -0.19%  retreated 0.4%, languishing at multi-year lows. Hong Kong’s Hang Seng Index HK:HSI +0.02%  edged down 0.1%, while Japan’s Nikkei Stock Average JP:100000018 +0.25%  ended the day up 0.3%, after moving between gains and losses through the session."

"- Oil futures closed with a loss Tuesday, turning lower after the dollar strengthened and a U.S. central banker sharply criticized the Federal Reserve’s decision to launch a third round of monetary easing, and said the central bank may raise short-term interest rates sooner than expected. Crude for November delivery CLX2 -0.47%  declined 56 cents, or 0.6%, to settle at $91.37 a barrel on the New York Mercantile Exchange. That was oil’s lowest settlement since Aug. 2."

"-November Soybeans finished up 1 1/2 at 1611 1/2, 14 off the high and 7 1/4 up from the low. January Soybeans closed up 3 1/4 at 1614 1/4. This was 7 1/2 up from the low and 12 1/2 off the high. December Soymeal closed up 3.9 at 488.1. This was 5.3 up from the low and 2.9 off the high. December Soybean Oil finished down 0.64 at 53.53, 0.79 off the high and 0.07 up from the low. November soybeans traded slightly higher at the close and finished 7 1/4 cents off the session lows. The soybean market saw support on news that suggested Brazil's exports have been exhausted until early planted soybeans are harvested in the 1st quarter of 2013. This has been suggested by many analysts over the last couple of months and that would explain why the US cumulative sales pace for this crop year is already 75% of the current USDA estimate. Additional reports suggest that China's soybean output could fall by 10% in 2012 to 13 million tonnes vs. the current USDA estimate of 12.60 million tonnes. The demand outlook for soybeans remains strong and this could keep underlying support in the soybean market. However, reports of better than expected soybean yields across the US Corn Belt have been a drag on prices in the short term. Some in the trade are beginning to pencil in a US soybean yield near 37 bushels per acre which could trigger additional profit taking by funds that are positioned to the long side of the market. Volume was thin in today as trader's position ahead of this Friday's Quarterly Stocks Report."

FKLI- It Is Time For Bulls To Rest

There is no doubt that the market is slowing down regionally and the government are actively playing their role to keep the economy active. A fine example will be U.S, with series of quantitative easing that target to boost economy growth from demand driven spending. With some other steps taken by other nations to at least keep on par or boosting their economy activity, the market itself have come to a stage called fatigue. Further growth will be recorded in diminishing pace. Market and economy work like a wheel, it will start to head higher, hit the top of the wheel and then move lower and eventually reach the bottom of the wheel. Although it is too early to tell the FBM KLCI and index futures will fell massively from here, early technical signs such as lower low and lower high formed for the first time after four months in daily chart above is some indication we cannot take lightly. Market is having tough time to breach it's all time high after few attempts and it seem peak out at the moment. It is time for the Bulls to pack up their stuffs and leave as the stock index has rallied steadily since Oct last year without any major correction above 100 points. For short term perspective, market is likely hovering on sideways mode while Bearish on medium term. For today, pivot point for spot month contract support level is located around 1,604 while resistance is pegged at 1,624..

Daily Pivot Point
R2= 1632
R1= 1624
S1= 1604

FCPO- Recovery In Progress, For Temporary.  

CPO futures halt from further Sell-off yesterday as traders perceive that the market might have oversold yesterday. Closing at the high of the day, the benchmark Dec finished RM23 higher to 2,669, the day high and low was 2,676 and 2,607 respectively. Volume was traded lower to 21,399 lots compare to 27,094 lots on previous Tuesday. We still have a lot work to expect if the market should recover massively from here. For a start, traders can forget about palm oil export figure as have to rise unexpectedly higher for this coming month end report which is less likely to happen. Next, the Soy bean and oil futures outlook have to recover steadily at least for this week to stabilize prices. Else if none of those event materialize, further weakness will poised to continue for palm oil futures. Technically, medium term Bearish momentum remain intact on the benchmark Dec as long as the immediate resistance around 2,700 level shown on hourly chart above is not breach. For short term or intraday trading, traders are advised to seize the opportunity to go Long as market is preparing to recover from current oversold level. For today, pivot point for the benchmark Dec on support is located around 2,625 while resistance is pegged at 2,694.

Daily Pivot Point
R2= 2719
R1= 2694
S1= 2625
 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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