Thursday, October 11, 2012

Palm Oil Futures Short Term Recovering 12th Oct 2012

Friday, 12th Oct 2012. Malaysia commodities futures rally for the second session straight yesterday amid strong recovery from Soya oil. Other news to follow.

"- U.S. stock indexes closed largely unchanged on Thursday, with the S&P 500 index just managing to halt a losing streak, as cheer about a decline in jobless claims dissipated. Extending losses into a fourth session, the Dow Jones Industrial Average DJIA -0.14%  fell 18.58 points, or 0.1%, to 13,326.39. Just managing to halt losses at four sessions, the S&P 500 SPX +0.02%  rose a fraction to end at 1,432.84, with energy pacing the gains and telecommunications the worst performer among the index’s 10 industry groups.  Down for a fifth session in its longest string of losses in three months, the Nasdaq Composite COMP -0.08%  lost 2.37 points, or 0.1%, to 3,049.41.

"- Asian markets suffered broad losses Thursday as a downgrade of Spain’s credit ratings and disappointing earnings outlook from some U.S. corporations dragged on investor risk appetite.

Chinese banks rallied, pushing the Hong Kong equity markets higher, after a large state-owned shareholder bought shares in the country’s top four lenders and said it would further increase its stake. Japan’s Nikkei Stock Average JP:100000018 -0.58%  slipped 0.6%, extending the previous session’s 2% drop and ending at a level the benchmark hasn’t seen since late July. Taiwan’s Taiex XX:Y9999 -1.85%  skidded 1.9%, China’s Shanghai CompositeCN:000001 -0.81% lost 0.8% and Australia’s S&P/ASX 200 index AU:XJO -0.16% slipped 0.2%, while Hong Kong’s Hang Seng Index HK:HSI +0.38% shook off early losses to end 0.4% higher. South Korea’s Kospi KR:SEU -0.78% ended 0.8% lower in a volatile session, after the Bank of Korea cut its policy interest rate by a quarter-point to 2.75%, as widely expected. The rate cut was in response to softness in the domestic economy amid a weakened global outlook. "

"-Crude-oil futures rose Thursday, with a fall in the U.S. dollar DXY -0.04% aiding the dollar-denominated commodity. Crude for November delivery CLX2 +0.40% rose 82 cents, or 0.9%, to $92.07 a barrel on the New York Mercantile Exchange. The contract came off session highs after the Energy Information Administration reported a slightly higher-than-expected increase in U.S. oil supplies for last week."

"-November Soybeans finished up 25 1/4 at 1548 1/2, 19 1/2 off the high and 27 1/4 up from the low. January Soybeans closed up 24 3/4 at 1548 1/2. This was 26 3/4 up from the low and 18 1/4 off the high. December Soymeal closed up 9.6 at 472.2. This was 10.4 up from the low and 7.3 off the high. December Soybean Oil finished up 0.7 at 51.33, 0.96 off the high and 0.74 up from the low. November soybeans traded sharply higher throughout the day and the positive trade followed a USDA report that was considered slightly bullish against traded expectations. The USDA pegged US soybean production at 2.86 billion bushels which was 101 million bushels above trade expectations and compares with the September estimate of 2.634. The initial increase in production was considered bearish but the report also showed an increase in domestic crush demand by 40 million bushels and exports by 210 million bushels to offset the increase in overall supply. This left ending stocks at 130 million bushels vs. traded expectations of 130 million bushels. The average US soybean yield rose to 37.8 bushels per acre vs. trade estimates of 37. Long term support in soybeans comes from consistent demand from China and an explosive export sales pace so far this year. China soybean imports were increased to 61 million tonnes vs. 59.50 in September."
FCPO- Short Term Recovery Likely, Still Weak On Longer Term

Traders are packing up their Short positions at the moment as market gained for the second session straight yesterday. Much of the support came from Soya oil which rose more than expected during Asia trading session. So far, the benchmark Dec has recovered about 12.6% from previous low around 2,230, and it closed RM66 higher to 2,523 level. If anyone can relate why the market rebounded steadily after the Sell-off, it would be oversold or overdone on previous correction, or "maybe it is not that bad at all." Bottom line, it does not matter on what could be the right reason behind these recovery, traders just need to alert and re-act to the market when it starting to turn to opposite direction. When you do that, it is not catching the high or the low of the market, but to act when the price breach above or below certain resistance or support level. And together with price action I usually accompanied in most of my trading decision, a good trade entry and exit points will not be far away. Technically, it was a clear cut indication that the market is hovering on recovering mode judging on higher lows and higher highs formed on hourly and 15 minutes time frame chart. Traders are reminded that this is just short term time frame, market direction for short term time frame can change very quickly within minutes. Why I kept emphasizing that it was a recovery rather than a uptrend or Bullish reversal on longer term time frame, two reason. Reason number one, it took longer for the market to recover 1% than it fell at the same rate using lesser time. And up until now, market is still struggle to recover about 12.6% after rallying for a week, versus a 12% fall from 2,517 to 2,230 on just three session which happened on 1st Oct to 3rd Oct. Reason number two, active productions that will contribute to high stocks, weakening demand towards the end of the year and Bearish price action in daily chart some how limit the recovery for coming week. For today, pivot support for the benchmark Dec is located around 2,468 while resistance is pegged at 2,551.

Daily Pivot Point
R2=2579
R1=2496
S1= 2468
S2= 2413
 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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