Monday, January 7, 2013

Bulls Taking Some Breather 7th Jan 2013

Monday, 7th Jan  2013. Moving back into range trading, palm oil futures is susceptible for correction soon as market participants are expecting slower demand on export figures. Other news to follow.

"- U.S. stocks rose on Friday and posted strong weekly gains, with the S&P 500 index closing at a five-year high, after Congress passed crucial budget legislation and data showed the economy is continuing to add jobs at a moderate pace. The S&P 500 SPX +0.49%  climbed 7.10 points, or 0.5%, to 1,466.47, its highest closing level since Dec. 31, 2007. The benchmark rose 4.6% for the week, its largest one-week percentage gain since the week ending Dec. 2, 2011. The technology-heavy Nasdaq Composite index COMP +0.04%  gained 1.09 points, or 0.04%, to 3,101.66. The Dow Jones Industrial Average DJIA +0.33%  rose 43.85 points, or 0.3%, to 13,435.21, with only six of its 30 components in negative territory."


"- Japanese stocks soared Friday in a post-holiday catch-up rally that was aided again by a weaker yen, while most other Asian markets fell on concerns U.S. central bankers were considering an end to their bond-buying program. The Nikkei Stock Average JP:100000018 +2.82%  jumped 2.8% to 10,688.11, ending at a level not seen since early March of 2011. The rally came as trading began in Tokyo for the first time in this calendar year, and after U.S. lawmakers signed an agreement to avert the worst of the fiscal cliff. But other markets that had already enjoyed fiscal-cliff relief rallies pared their recent gains. Australia’s S&P/ASX 200 AU:XJO -0.36% , South Korea’s Kospi KR:SEU -0.37%  and Taiwan’s Taiex XX:Y9999 -0.39%  each lost 0.4%, while Hong Kong’s Hang Seng Index HK:HSI -0.29%  fell 0.3% after recent gains. The Shanghai Composite IndexCN:000001 +0.35%  ended 0.4% higher, unable to rally as hard as stocks in Japan, as investors held out hopes for Beijing to enact large, market-friendly pro-growth measures."
"- Oil futures finished with a slight gain Friday, finding support from a hefty drop in last week's U.S. crude supplies. February crude oil CLG3 +0.29%rose 17 cents, or 0.2%, to settle at $93.09 a barrel on the New York Mercantile Exchange."
"-January Soybeans finished down 14 at 1389, 25 off the high and 11 up from the low. March Soybeans closed down 21 at 1365 1/2. This was 9 1/2 up from the low and 31 3/4 off the high. January Soymeal closed down 7.4 at 398.2. This was 3.7 up from the low and 10.8 off the high.
January Soybean Oil finished down 0.79 at 49.42, 0.93 off the high and 0.02 up from the low. March soybeans traded down double digits into the closing bell on thoughts that demand may begin shifting to South America soon as their harvest picks up speed. Weather has been mostly favorable for South America with the exception of northeastern Brazil which needs some rainfall soon. Export sale were in line with market estimates but the pace of sales has fallen off due to cancellations from unknown destinations and China. Net weekly export sales came in at 434,900 tonnes for the current marketing year and 61,400 for the next marketing year for a total of 496,300 tonnes. As of December 27th, cumulative sales stand at 84% of the USDA forecast vs. a 5 year average of 69%. Sales of 162,000 tonnes are needed each week to reach the USDA forecast. Net meal sales came in at 53,800 tonnes for the current marketing year and as of December 27th, cumulative meal sales stand at 78% of the USDA forecast vs. a 5 year average of 49%. Sales of 41,000 tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 31,300 tonnes for the current marketing year and as of December 27th, cumulative oil sales stand at 81% of the USDA forecast vs. a 5 year average of 39%. Sales of 4,000 tonnes are needed each week to reach the USDA forecast."

FCPO- Stubborn Range. 

The benchmark March closed lower about RM7 to 2,467 on previous Friday after it move within 2,495 ~2,462 range. What is likely to happen does not mean it is going to materialize for sure in the future. From initial assessment, the higher lows and higher high formed on previous Thursday are likely signifies that Buying interest is still strong enough to create a new weekly high at that time. But even we have most of the hint pointed that the market would go higher the next day opening, it would not necessary happen for sure even with higher closing on the Soy oil as well. The point is, there is nothing will happen for sure until it has already occur. All the trader can do is manipulate his/her risk and reward in the market and that is about it. I.e: trader A found that the market is coming down on the opening and his previous Long position will be close down with break even point. You have two choice, one is follow your gut feel and hope for the market to rise higher or the second choice would be putting a break even stop and follow your plan to Short the market if it breach certain support level or forming any Bearish price action. If you would have follow your first choice, chances are you may get to close off you positions at higher price but the market only need one single occasion to force you out of the market for good. Worse case, the market could have fell RM80 from there and closing at the day low. So what happen next ? If you are still hoping, you would be stuck again with your previous Long positions overnight and not knowing what fate awaits you the next opening bell. Traders who took the second choice is consider as making the right decision even at the hardest point of time, this is also how a discipline trader is trained. A discipline trader always act accordingly with their trading plan, especially when everything looks worse. Back to the palm oil futures benchmark month, price is likely pulling back into sideways to downside bias on short term perspective. This is because there is a lower high candle formation formed on smaller time frame such as 15 minutes and 30 minutes chart. Although daily chart still suggest that current Bullish candle formation is still valid, traders could switch into smaller time frame chart to quickly identify short term market sentiment. 

Daily Pivot Point
R2=2507
R1=2487
S1=2454
S2=2441
 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.

0 comments:

Post a Comment