Monday, April 8, 2013

High Volatility Prior To Polls Results 8th April 2013

Monday, 8th April 2013. Active trading session and high volatility are likely expected prior to Malaysia actual polls results. Other news to follow.

"- U.S. stocks fell on Friday, with the S&P 500 index sustaining its worst weekly hit this year, after the government said the far fewer Americans found jobs in March than analysts had estimated. After falling 171 points, the Dow Jones Industrial Average DJIA -0.28% recovered the lions share of its losses to end at 14,565.25, down 0.3% for the session and 0.1% for the week. Down 1% for the week, its largest weekly loss since December, the S&P 500 indexSPX -0.43% declined 6.7 points, or 0.4%, to 1,553.28, with technology companies hardest hit and utilities the best performing of its 10 major sectors. The Nasdaq Composite COMP -0.66% lost 21.12 points, or 0.7%, to 3,203.85, with the technology-heavy index off 2% for the week, its biggest weekly drop since the week ended Nov. 9, 2012."

"- Hong Kong stocks on Friday suffered their worst drop in more than eight months as worries about the impact from a new strain of avian flu in China hurt sentiment, slamming airline shares in particular. Hong Kong’s Hang Seng Index HK:HSI -2.73%  slid 2.7%, its worst percentage decline since late July, following reports of deaths linked to a new strain of avian flu. Airline stocks in Europe were also hit by the news.  Elsewhere in the region, South Korea’s Kospi KR:SEU +0.22%  dropped 1.6% and Australia’s S&P/ASX 200 AU:XJO +0.39%  fell 0.5%.

Japan’s Nikkei Stock Average JP:NIK +2.80%  climbed sharply higher for a third straight day, ending the day 1.6% higher for a weekly gain of 3.5%."
"- Oil futures closed below $93 a barrel Friday, to tally a weekly loss of 4.7% following weak nonfarm payrolls data. The primary driver for oil is the "concern that the U.S. is slowing, with a consequent decrease in demand for oil," said Ken Crawford, a senior portfolio manager at St. Louis-based Argent Capital Management. May crude CLK3 +0.09% fell 56 cents, or 0.6%, to settle at $92.70 a barrel on the New York Mercantile Exchange. "

"-May Soybeans finished down 10 1/2 at 1361 1/2, 12 off the high and 7 up from the low. July Soybeans closed down 9 1/4 at 1342 1/2. This was 6 up from the low and 10 1/2 off the high.
May Soymeal closed down 5.4 at 391.7. This was 1.4 up from the low and 5.9 off the high.
May Soybean Oil finished up 0.4 at 48.95, equal to the high and 0.65 up from the low. May soybeans traded lower on the day and put in a fresh low for the move this morning. Spot basis on the River and Gulf were steady to finish the week with bids holding near the weekly highs as traders stem bushels for nearby shipments. Forward delivery business was quiet to end the week and processors in the west remain aggressive bidders as they attempt to keep crush supply pipelines healthy. Chinese authorities stated overnight that the death toll from the new strain of bird flu from the H7N9 virus rose to 6 people. News sources suggested that authorities in Shanghai also began to cull chickens from poultry dealers. The investigations are ongoing but the uncertainty of the situation and its overall impact on the hog and poultry sectors continue to add a risk off vibe to the oilseed markets into the weekend. Dalian markets were closed for holiday but will return next week. The souring technical outlook for the oilseed market added pressure as well."

FKLI- Tension Rises Prior To Poll Date

Witnessing the recent fluctuation on index futures, you can clearly tell that previous Wednesday extreme volatility was due to major news announcement on parliament dissolution. Back to previous Friday, the FBM KLCI, which was trapped in the negative zone almost the whole trading of Friday, managed to end slightly higher on last-minute fund buying of Maybank.  The firmer performance towards the close also helped allay market concerns about a sharp fall in the KLCI after the announcement of the dissolution of Parliament on Wednesday.  Blue chips pared loss from earlier trades, with the KLCI edging up 0.19 point or 0.01% to close at 1,688.65. Trading volume was 974.35 million shares valued at RM1.97bil. Advancing counters beat decliners 480 versus 252 while 291 were unchanged, reflecting the firmer market sentiment. Based on my initial assessment, I doubted that long lower shadow formed on previous Wednesday got to do with most technical factor. Maybe there was, but it would not justifiable for the index futures to move such way. So much has gone wrong even for both side of the trade on previous Wednesday when the market swing erratically, forcing both Long side and Short side to cover their positions within that session. On bigger picture, major resistance is still remain around 1,705 level while the April contract is running on medium term recovery phase  immediate support is expected to locate around  1,676~1,673 for the moment.

Daily Pivot Point
R2= 1703.50
R1= 1695
S1= 1676
S2= 16666


FCPO- Heading Downwards On Weaker Demand And Bearish Soy Outlook

Bulls are struggling to stay afloat recently with price kept on coming down due to sluggish demand and slightly higher inventories concern. Apart from that, much Bearish tension came from palm oil rival Soy oil as well. Soy prices have been heading south due to active production concern and recent influx of supplies reported on USDA last Thursday. News over the Bird Flue plague that strike on Hong Kong is also capable to disturb Chinese demand on the moment. Recent news regarding improve demand (about 7.5%) and reduced stockpiles might explain the swift rally occur on late session last week. Technically, the Jun contract Bearish price action is noticeably spotted as there were more and more lower highs and lower lows formation formed on lower time frame (i.e: 15 minutes to hourly chart). The incident where price recovery occur on late afternoon session last Thursday and Friday were the futile attempt from the Bulls to revive the market. Much of their effort is wasted when the market open substantially lower the next, fully offset previous day high closing value. In other words, although we are expecting high volatility on the last hour before the closing end, palm oil futures is rated Bearish on both medium and short term basis judging on current Bearish candle formations. For today, pivot support for Jun contract is located around 2,331 while resistance is pegged at 2,385.


Daily Pivot Point
R2= 2385
R1= 2370
S1= 2343
S2= 2331

 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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