Monday, November 5, 2012

Travelling Lower, Beware 6th Nov 2012

Tuesday, 6th Nov 2012. Both stock index and commodities futures on Bursa Malaysia went down substantially lower due to economy uncertainties for the upcoming year end. Other news to follow.

"- U.S. stocks finished with modest gains on Monday, with investors reluctant to make major moves a day ahead of the U.S. presidential election. The Dow Jones Industrial Average DJIA +0.15% gained 19.28 points, or 0.2%, to end at 13,112.44, led higher by Hewlett-Packard Co. HPQ +1.82%  and Caterpillar Inc. CAT +1.14% The S&P 500 Index SPX +0.22%  added 3.06 points, or 0.2%, to 1,417.26, with materials and energy the best performing among its 10 major sectors, and with utilities the worst-performing sector. The Nasdaq Composite Index COMP +0.59%  climbed 17.53 points, or 0.6%, to 2,999.66."

"- Asia stocks ended mostly lower Monday, with South Korean car makers and resource stocks trading in Hong Kong among the top decliners as caution reigned ahead of the U.S. presidential election. “Markets are in an uncertain mode, given the nearing close-call U.S. elections, and this is not conducive to gains,” said Dariusz.Kowalczyk, an emerging markets strategist at Credit Agricole. Hong Kong’s Hang Seng Index HK:HSI -0.47%  slipped 0.5%, while Japan’s Nikkei Stock Average JP:100000018 -0.48% lost 0.5%. South Korea’s Kospi KR:SEU -0.55%  fell 0.6%, China’s Shanghai Composite IndexCN:000001 -0.14%  slipped 0.1% and Taiwan’s Taiex XX:Y9999 -0.35%  slid 0.4%, while Australia’s S&P/ASX 200 index AU:XJO +0.37% climbed 0.3%."

"- Crude-oil futures edged higher Monday as last week’s steep drop brought in bargain hunters, but trading remained tentative ahead of Tuesday’s U.S. elections. Crude for December delivery CLZ2 +0.02%  added 79 cents to end at $85.65 a barrel on the New York Mercantile Exchange.

Prices fell nearly 3% on Friday."
"-November Soybeans finished down 22 3/4 at 1504 1/4, 20 3/4 off the high and 3/4 up from the low. January Soybeans closed down 23 1/2 at 1503 1/4. This was 1 1/4 up from the low and 21 off the high.
December Soymeal closed down 6.9 at 469.0. This was 0.6 up from the low and 8.4 off the high. December Soybean Oil finished down 0.94 at 48.32, 0.9 off the high and 0.07 up from the low. January soybeans registered double digit losses today as bulls took profits ahead of a USDA report that many expect will show an increase in the US average soybean yield and production. Additional pressure was linked to a less than stellar outside market performance ahead of the Presidential election tomorrow. Traders noted that commercial and end user buying was active on the setback today as the US continues to export soybeans at a staggering pace. Export inspections for the week ending November 1st were reported at 59.4 million bushels vs. 63.3 last week. Only 17 million bushels are needed each week to reach this crop years USDA export estimate. Cumulative export inspections are 33% of the current USDA export goal vs. the 5 year average of 19%. The weaker tone in futures today was also linked to a more favorable weather forecast for South America this week. Drier conditions are expected for Southern Brazil and Argentina while Northern Brazil is expected to see better rainfall. Both weather events could help summer planting progress and could be considered a short term negative to prices if they develop."

FKLI- Swift Correction That Will Shake The Very Foundation On Any Uptrend

Market made some correction since previous Friday and some might agree that it was a swift Sell-off which wipe out most of the gain made over two weeks ago. With such strong strength displayed by Bears to over power the Bulls, it seems that short term outlook of the market have been weaken substantially. Now the question is how we are going to identify the trend likely hood for the next few days this week or I called medium term outlook. Every market has its own major support and resistance, and once this area is breached, the preceding momentum accompany it will appear stronger and swifter especially if it is a new break out. Looking at the index futures for Nov contract, it is easier for the market to head down further if the Support level around 1,640 level has taken down. More Selling pressure are likely to accumulate if the Nov contract breached below this Support level. Previous Friday Sell-off that formed at least two weeks Bearish Marubozu candle was a clear testament that indicate the Bears are not fooling around. For today, pivot support for Nov contract is located around 1,640 while resistance is pegged at 1,653.

Daily Pivot Point
R2=1658.5
R1= 1653
S1= 1643
S2= 1638.5

FCPO- Gap Down, Resuming Preceding Down Trend. 

Market tend to give up gain easily especially when it is rallying to recover from previous Sell-off. The reason behind this incident might due to accumulated momentum during a Sell-off period was greatly hide away when the market attempt to recover after certain Sell-off. For instance, a recovery made after some serious Sell-off  is like a freight train moving uphill, and it is moving slower compare to when the freight train is coming down from that hill. That is how easy it is for traders to switch their positions from Long to Short once there is a major break out from an important Support level. An informed traders are like any traders out there, just what make them different are their keen sense of memory, most of them agreed that market will move swiftly and actively when it resume to their preceding trend. Once you realize that, these trend traders always Buy at the high, and Sell at the Low, contradict to most of the traders out there are doing the other way round. Mathematically, most of us agree that only small portion of the traders group that re-act oppositely to the majority traders were the winners. That is why trend traders always make the most annually at any given market, any. Technically, medium term technical outlook has reverse it's role from positive to negative and the confirmation was achieved when the benchmark Jan breached below immediate Support area around 2,490 yesterday by gaping down to 2,447 on yesterday opening session. At close, the benchmark Jan close RM85 or 3.41% lower to 2,411 level, the day high and low was 2,447~2,381 respectively. As you can see, the Bears never look back and hammered the market straight down to 2,381 before it settle at 2,411. Without doubt, further weakness is expected to occur for palm oil futures this week judging from lower high and lower low candle formation as shown on hourly chart above.

Daily Pivot Point
R2=2479
R1= 2445
S1= 2379
S2= 2347
 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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