Sunday, November 25, 2012

FKLI Heading To Major Support 26th Nov 2012

Monday, 26th Nov 2012. FKLI heading into monthly major Support level, more weakness awaits if the index futures breach below this level. Other news to follow.

"-U.S. stocks rallied Friday, buoyed by encouraging economic data from Germany and China, as American consumers headed to retail stores to take advantage of Black Friday promotions.

The Dow Jones Industrial Average DJIA +1.35%  climbed 172.79 points, or 1.4%, to end at 13,009.68, with all 30 of its components in positive territory for the day. For the week, the Dow rose 3.4% — its best week since the week ending June 8. The S&P 500 index SPX +1.30%  gained 18.12 points, or 1.3%, to 1,409.15, with information technology the top gainer and utilities the sole decliner among 10 major industry groups. For the week, the S&P 500 gained 3.6% — its largest weekly percentage gain since June 8. The technology-heavy Nasdaq Composite COMP +1.38%  advanced 40.30 points, or 1.4%, to end at 2,966.85, leaving it up 4% for the week."

"- Most Asian markets rallied Friday, buoyed by signs of an improvement in global manufacturing, with mainland Chinese stocks rebounding from a drop the previous day and Taiwanese shares soaring on reports of buying by government funds. After a tentative start in the absence of cues from the U.S. and from Japan, Asia’s largest country by stock market capitalization, regional markets climbed on buying aided by data showing an improvement in manufacturing from China and the euro-zone. Hong Kong’s Hang Seng IndexHK:HSI +0.79%  ended 0.8% higher after a lower start, China’s Shanghai CompositeCN:000001 +0.58%  climbed 0.6% and South Korea’s Kospi KR:SEU +0.62% added 0.6%, while Singapore’s Straits Times Index SG:STI +0.09%  inched up 0.1% by late afternoon, staying on course for a five-day winning streak. Australia was one of the few markets to move in the opposite direction, with the S&P/ASX 200 AU:XJO -0.0023%  slipping fractionally, as some resource stocks came under profit-taking pressure after recent gains and ahead of the weekend. Taiwan’s Taiex XX:Y9999 +3.10%  was the region’s best performer, jumping 3.1% to erase the losses recorded earlier in the week, with purchases by government funds behind the advance, according to a Dow Jones Newswires report."
"- Crude futures turned higher on Friday as the dollar weakened, raising the price of oil and other dollar-denominated commodities, and as gains for the stock market also lent support.
Oil for January delivery CLF3 +1.01%  gained 90 cents, or 1%, to settle at $88.28 a barrel on the New York Mercantile Exchange. On the week, crude rose 1.6%, its best since the one ended Oct. 12."
"-January Soybeans finished unchanged at 1418 3/4, 8 1/4 off the high and 4 1/4 up from the low. March Soybeans closed unchanged at 1403. This was 4 up from the low and 8 1/4 off the high.
December Soymeal closed up 0.7 at 428.6. This was 2.2 up from the low and 6.1 off the high. December Soybean Oil finished up 0.51 at 49.04, 0.11 off the high and 0.29 up from the low. January soybeans traded sharply higher on the day on positive export data, a lower dollar, and fears that South American weather may disrupt supply pipelines. Positive economic data out of China and Europe pushed the dollar sharply lower which triggered rallies in metals and stocks today. This helped the grain and soybean market open in positive territory. Additional support was linked to positive export demand data for soybeans, meal, and oil last week. Net weekly export sales for soybeans came in at 543,600 tonnes for the current marketing year and none for the next marketing year. This was in line with market estimates and supportive to the trade throughout the day. As of November 15th, cumulative soybean sales stand at 74% of the USDA forecast for the current marketing year vs. a 5 year average of 59%. Sales of 231,000 tonnes are needed each week to reach the USDA forecast. Net meal sales totaled 197,900 tonnes which was also in line with market expectations and cumulative meal sales stand at 59% of the USDA forecast for current marketing year vs. a 5 year average of 41%. Sales of only 65,000 tonnes are needed each week to reach the USDA forecast. Net oil sales totaled 124,100 tonnes and the USDA reported that US exporters sold 20,000 tonnes of oil to and unknown destination for the 2012/13 crop year. As of November 15th, cumulative soybean oil sales stand at 83% of the USDA forecast for the current marketing year vs. a 5 year average of 30%. Sales of only 2,000 tonnes are needed each week to reach the USDA forecast."

FKLI- Approaching Major Support

There was still no sign of recovery after the index futures fell for almost three weeks till now, thanks to the economy uncertainties and upcoming general election tension which might take place early next year. These Sell-off might not seem to be a regular profit taking activities because it has weaken for far too long and too much. We are likely looking at major medium term correction if the market manage to breach below major support level located around 1,585~1,580 level based on previous monthly low. On previous Friday, the stock index ended 4.23 points lower to 1,614.32 while index futures went down about 5 points to 1,608.50 level. Most of the traders might be wondering whether the market will continue to fall below significant support level. There was no definitive answer to this question for sure, but "why not ?"  Why not let the market fall further if there is another major support taken out this week. If the market manage to breach below monthly previous low / Support level at 1,585, there is high possibility that the stock index would continue to Sell-off after that level. Bear in mind that when a market turn into Bearish mode, index futures will be deep in discount when it breached that major Support. Short position can still be initiate even when the index futures is 10 points discount against the stock index. For today, spot month pivot point for support level is located around 1,601 while resistance is pegged at 1,616.

Daily Pivot Point
R2= 1616
R1= 1612
S1= 1604
S2=1601

FCPO- Struggling To Hold On Gains


Palm oil futures went down amid market participants are expecting slower demand that might increase the stockpiles figure above 2.6 millions tons coming this year end. At close, the benchmark Feb finished RM17 lower to 2,393 level, the day high and low was traded within 2,411~2,380 level. Volume for the third month was recorded higher to 19,142 lots as traders prefer to closed off their positions prior to weekend. After closing for two days Thanks giving holiday, CME Globex will resume its trading session today. Weak fundamental has done it's job to curb palm oil futures from recovering after it rose up to 2,485 level early  last week. Even though the benchmark month has dropped back recently, it is still early to say "this is it", nor it is going to be a swift Sell-off down to hill based on weak fundamental alone. Technically, there might be further recovery if the benchmark Feb able to breach today's pivot resistance level at 2,410. Better still, it could create a Higher Low or swing low if it manage to recover above second resistance level at 2,426. Else, more weakness is expected to take place if the benchmark Feb breach below pivot Support level at 2,380~2,379 level today.

P/s: Made some correction on 26th Nov 2012 market outlook.

Daily Pivot Point
R2= 2426
R1= 2410
S1= 2379
S2= 2364
 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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