Wednesday, November 28, 2012

First Sign Of Recovery On FKLI 29th Nov 2012

Thursday, 29th Nov 2012. First light for the market to recover on stock index and index futures as both of the market manage to closed higher yesterday. Other news to follow.

"- U.S. stocks rose sharply on Wednesday, lifting the S&P 500 back into the green for the week, after comments by President Barack Obama and House Speaker John Boehner bolstered thinking a budget deal would be reached. After an 112-point slide, the Dow Jones Industrial Average DJIA +0.83%  rose as much as 110 points, and finished 106.98 points higher, or 0.8%, at 12,985.11.

The S&P 500 index S +1.24%  gained 10.99 points, or 0.8%, to 1,409.93, with consumer discretionary faring best among its 10 major sectors, all of which gained. The Nasdaq Composite COMP +0.81% advanced 23.99 points, or 0.8%, to 2,991.78."

"- Asian markets skidded Wednesday as investors fretted about the possible tax hikes and spending cuts facing the U.S., with Tokyo stocks dropping from seven-month highs and shares in Shanghai plumbing depths near four-year lows.The Nikkei Stock AverageJP:100000018 -1.22%  lost 1.2% in Tokyo for its first decline in five sessions, South Korea’s Kospi KR:SEU -0.65%gave up 0.7%, Australia’s S&P/ASX 200 index AU:XJO -0.21%  declined 0.2% and the Hang Seng IndexHK:HSI -0.62%  fell 0.6% in Hong Kong. Taiwan’s Taiex inched up 0.1%, while China’s Shanghai Composite indexCN:000001 -0.89% lost 0.9%, dropping further to levels it hasn’t seen since January 2009."

"- Oil futures fell Wednesday, extending their losing streak to a third straight session as fiscal-cliff and Greek-debt woes helped feed demand concerns, but prices finished off their lows of the day following an unexpected decline in last week’s U.S. crude supplies. Crude-oil futures for January delivery CLF3 +0.17%  fell 69 cents, or 0.8%, to settle at $86.49 a barrel on the New York Mercantile Exchange. Earlier, they touched a low of $85.36."
"-January Soybeans finished down 3 at 1446 1/4, 10 1/2 off the high and 6 1/4 up from the low. March Soybeans closed down 2 1/2 at 1435. This was 7 up from the low and 10 1/2 off the high.
December Soymeal closed up 0.6 at 439.9. This was 1.6 up from the low and 3.0 off the high. December Soybean Oil finished down 0.01 at 50.11, 0.09 off the high and 0.45 up from the low. January soybeans traded slightly lower to finish the day. Oil saw modest losses while meal finished lower on market on close sell pressure. The soybean market traded mostly negative throughout the day after failing to see follow through momentum overnight to the upside. Losses were limited due to strength in the corn and wheat market and also after the USDA reported that US exporters sold 290,000 tonnes of soybeans to China for the current marketing year. The demand picture continues to be robust but the overall weather outlook for South America remains mostly favorable which is adding resistance. Central and northern Brazil continue to see steady precipitation which has improved conditions while Southern Brazil is trending drier but is expected to see an uptick in rainfall. Argentina will see another shot of precipitation at the end of this week followed by a drier weather pattern. Basis in the Gulf of Mexico was steady to slightly weaker nearby but still well above historical levels. Concern that low water levels on the Mississippi River south of St. Louis may slow supply to the Gulf of Mexico is adding support to cash markets."

FKLI- Temporary Rebound

Oh no, not yet, at least not that fast. What I am referring to was frantic rebound after the market went down straight for three weeks. Even though the market recovered off the low yesterday, it does not mean that the current Bearish price outlook has been completely diminish. What we can expect from the market for the rest of the week will be temporary rebound from the low of 1,590 yesterday. If the spot month would retrace below 1,585 level, it could be different story all together today. Major support around 1,585 level was the final defence for the market to recover as any point below here will spur more Selling pressure. Fortunately, that support manage to hold for the moment when the spot month index manage to recover up to 1,607.50 level after it hit the low of 1,590 level yesterday. Nonetheless, the recovery of this temporary rebound is likely capped around 1,624 level or  61.8% from Fibonacci retracement ratio. For medium term Short set up, traders are advised to wait for the spot month index to finish its temporary rebound first and initiate their Short position only after the index futures retraced down from that recovery. These event can be identified from a lower high candle formation by looking at hourly time frame. For today, pivot support for the Dec contract is located around 1,585 level while resistance is pegged at 1,623 level.

Daily Pivot Point
R2= 1623
R1= 1616.5
S1= 1597
S2= 1585

FCPO- Conflicting Candle Formation / Signal

Its a daunting task to have an accurate on the market outlook in any time frame when there is conflicting signal or candle formation occur. What we are looking at was a classic situation of conflicting signal in hourly time frame, there was both higher low which signifies Bullish momentum and lower high which suggest market is losing its steam from recovery. The best approach to remedy this would be switching to lower chart time frame to get better reading what is likely to happen on medium term perspective based on faster time frame. This time frame could provide traders detailed chronological perspective about where does the price is likely to go next. For example, traders could find short term candle formation within this faster time frame, a lower high and lower low candle formation formed on 5 minutes foretell that the market is likely to head down way earlier than the same candle formation formed on hourly time frame. In other words, traders can benefit whole lot by zoom in at look at the candle formation on faster time frame rather than wait for the market to breach either the previous low or previous high to initiate their positions. Within the 15 minutes chart, there was another lower high and one lower low formed yesterday, this information proved useful as the benchmark Feb does gap down on afternoon session after the lower low formed in the morning session. For this few sessions, major Support is located around 2,380, enormous Selling pressure will surface if the benchmark Feb breached below this level. Other wise, market is likely recover slowly if this Support level remain intact.

Daily Pivot Point
R2= 2431
R1= 2411
S1= 2377
S2= 2363

 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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