Ranging Price Action on Equity Index and Commodities Futures 10th Oct 2012

Wednesday, 10th Oct 2012. After recovering some ground both index futures and commodities futures positive momentum had come to a pause, not a crossroad yet. Other news to follow.

"- U.S. stocks fell sharply Tuesday to close near session lows, extending losses as investors braced for earnings and the International Monetary Fund cut global growth outlooks. The Dow Jones Industrial Average DJIA -0.81%  shed 110.12 points, or 0.8%, to close at 13,473.53, near its intraday low of 13,473.31. The decline marks the Dow’s second decline in as many days. The S&P 500 index SPX -0.99%  fell 14.40 points, or 1%, to close at 1,441.48, with energy the sole sector to remain in positive terrain among its 10 major industries as oil prices jumped on heightened tensions in the Middle East.

On the New York Mercantile Exchange, crude futures for November deliveryCLX2 -0.65%  rallied $3.06 to $92.39 a barrel. The Nasdaq Composite COMP -1.52% shed 47.33 points, or 1.5%, to 3,065.02."

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"- Mainland Chinese stocks jumped Tuesday, helping to buoy Hong Kong shares, as hopes for policy support from Beijing were strengthened after the People’s Bank of China injected a large dose of liquidity to ease tight conditions. Australian stocks climbed to a fresh 14-month high, as commodity producers rallied amid concerns about supply disruptions due to labor unrest in South Africa, while Japanese stocks declined as trading resumed after Monday’s holiday. The Shanghai Composite CN:000001 +1.97%  ended the day 2% higher at 2,115.23, while Hong Kong’s Hang Seng Index HK:HSI +0.54%  rose 0.5% to 20,937.28."

"- Crude-oil futures on Tuesday snapped a two-session losing streak, ending at the highest in a little more than a week as bargain hunters bought up oil and supply concerns reemerged. Oil for November deliveryCLX2 -0.62% advanced $3.06, or 3.4%, to settle at $92.39 a barrel on the New York Mercantile Exchange. Other key energy futures also ended higher, with November gasoline RBX2 -0.16% up 2.3% to end at $2.96 a gallon."

"-November Soybeans finished down 1 at 1550, 24 off the high and 3 up from the low. January Soybeans closed up 1 1/4 at 1549 1/4. This was 5 1/4 up from the low and 22 1/4 off the high.

December Soymeal closed down 1.6 at 471.0. This was 0.6 up from the low and 7.7 off the high. December Soybean Oil finished up 0.32 at 51.25, 0.73 off the high and 0.32 up from the low. November soybeans traded lower into the close and nearly 25 cents off its highs of the day. Soybean meal ended the day lower but soybean oil was able to hold onto gains and finish higher on the day. Early support was linked to rumors that China bought US soybean cargos off the PNW coast overnight but no reported sales have hit the market yet. Soybean basis was steady to slightly firm in certain areas of the Midwest as harvest moves along and most feel soybean harvest will be reported at 61% complete this afternoon. Additional support is coming from a robust US export program and export inspections for the week ending October 4th were reported at 45.6 million bushels vs. 41.7 last week. Only 20.8 million bushels are needed each week to reach this year's USDA forecast. The export pace is running 11% of the current USDA estimate vs. the 5 year average of 6%. A brief period of sell pressure hit the market midday after Brazil's government reported that its current Brazil soybean production estimate for 2012/13 is 82.8 million tonnes which would be the largest crop on record. Outside markets were mixed on the day with crude oil trading higher, US stocks lower, and the US Dollar was sharply higher which limited gains in the soybean market."

FKLI- Some Resistance At The Top

Stock index had again made some impressive gains on the beginning of Oct this week. The FBM KLCI surged and made a new high at 1,668 level, marking the new historical high since the establishing of Bursa securities exchange. The impulsive rally came mostly from local fund Buying activities on various blue chips stocks last week. For spot month index futures, positive momentum is likely extended soon as the Oct contract manage to breach its previous high above 1,660 level. In another perspective, the ability for the spot month index futures to breached above 1,660 level previous also formed another important positive indication on daily chart, named higher high. What we are looking now is just some adjustment made or profit taking after the market reached new high last Thursday. For today, the spot month contract is expected to travel within first level pivot support and resistance area, pivot support for Oct contract is located around 1,655 while resistance is pegged at 1,667.

Daily Pivot Point
R2=1675
R1=1667
S1=1655
S2=1650

FCPO- Surviving Previous Friday Bearish Indication

CPO futures manage to wipe previous Friday weakness by closing in positive territory yesterday. Palm oil futures was able to fend off weak sentiment probably due to strong recovery made on Soya oil, during yesterday Asia trading session. At close, the benchmark Dec surge about RMxx to xx, marking a strong come back and snapping previous continuous Sell-off. Soya oil was traded higher about xx to xx, supporting other edible oil for recovery as well. Even with the recovery of palm oil futures for the past four sessions, palm oil over supplies concern remain overwhelmingly bad. If the popular market quote "Buy the rumour, Sell the fact" is true, market is expected to re-act neutrally if the upcoming palm oil stocks data appear to be in-line with the expectation figures, which is around 2.3 millions ~ 2.5 millions tons. Else if the palm oil stocks surged more than expected, more Selling pressure will mount on palm oil futures. Vice versa if the stocks reduced lower than expectation. Technically, the benchmark Dec is likely hovering on recovery mode on short term basis judging on higher lows and higher highs price action formed on hourly chart shown above. But on higher time frame, even after 9% recovery made yesterday, medium term technical outlook remain Bearish as there is no noticeable higher low and higher high made yet. Hence, prepare to expect a 5%~12% technical rebound from the previous low located around 2,230 level if the palm oil fundamental data announce within expectation. For today, pivot support area for the benchmark Dec is located around 2,401 while resistance is pegged at 2,464.

Daily Pivot Point
R2=2491
R1=2464
S1=2401
S2=2365
 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.