Wednesday, May 15, 2013

Unsustainable Rallies As Long Term Outlook Remain Bearish On FCPO 15th May 2013

Wednesday, 15th May 2013. FCPO recent rallies has been deny by the Bears when the July contract starting to retrace from the high since previous Monday this week, signifying fading strength of Bulls. Other news to follow.

"- U.S. stocks on Tuesday rallied to another record-breaking close as Wall Street embraced the view of a still-improving economy. Advancing for an 18th consecutive Tuesday, the DowDJIA +0.82% added 123.57 points to 15,215.25, with all but four of its 30 components advancing. Also finishing at a record close, the S&P 500 index SPX +1.01%  added 16.57 points to 1,650.34, with financial shares faring best among its 10 major industry groups.

 The Nasdaq Composite COMP +0.69%  gained 23.82 points to 3,462.61."

"-Mainland Chinese stocks fell Tuesday to lead most major Asian markets lower amid worries Beijing may not ease policy to immediately address an economic slowdown.
Japanese equities retreated a day after the after Nikkei Stock Average ended at its highest level in more than five years as the yen strengthened to drop, while South Korean shares advanced on bargain buying in beaten-down automobile firms. The Shanghai Composite CN:000001 -1.11%  ended 1.1% lower during the session. The drop comes a day after April data on industrial output and retail sales was broadly interpreted as a slow start to the second quarter for the Chinese economy. Elsewhere in the region, Hong Kong’s Hang Seng Index HK:HSI -0.26% dropped 0.3% and Japan’s Nikkei JP:NIK +1.92%  let early gains slip by to end 0.2% lower. The benchmark had on Monday ended at its highest close since December 2007. Meanwhile, South Korea’s KospiKR:SEU -0.02% jumped 1% after underperforming other Asian markets recently, while Australia’s S&P/ASX 200AU:XJO +0.29%  added 0.2%."
"-  Oil futures saw a fourth straight session of , as a report from the International Energy Agency detailed a to the global oil market from a surge in North American production. also weighed on dollar-denominated prices for crude, which closed below $95 for the first time since May 2. June crude CLM3 +0.12% fell 96 cents, or 1%, to settle at $94.21 a barrel on the New York Mercantile Exchange."

"-May Soybeans finished up 3 1/2 at 1524 1/2, 20 1/2 off the high and 9 3/4 up from the low. July Soybeans closed down 4 1/2 at 1414 3/4. This was 9 3/4 up from the low and 11 1/4 off the high.
July Soymeal closed down 3.3 at 411.8. This was 1.6 up from the low and 5.9 off the high. July Soybean Oil finished up 0.15 at 49.76, 0.07 off the high and 0.45 up from the low.  The soybean market traded lower for most of the session, with the exception of the May contract that was up double digits this morning. The US Dollar made a fresh 10 month high today as investors and traders see a more stable outlook for the US economy which could mean the Fed induced quantitative easing programs may come to an end soon. This helped to pressure markets like crude oil and gold but soybeans managed to find a bid late in the day on tight cash markets and profit taking in the July/November spread. Traders are looking ahead to the NOPA crush report this week as it will provide direction as to the crush pace going forward and demand in the last month. The basis in the Gulf was lower midday on light export demand. The basis weakness moved up the river and bids around St. Louis softened according to physical traders. Soybean export shipments have slowed considerably over the last couple of months as China and other world buyers shift demand to South America. Meal demand continues to be strong out of the US which is helping to keep crush margins steady amid record basis levels in the interior of the US."

FCPO- We Need More Positive Data And News

I have wrote bold write up from time to time and although some may sound entirely out of market tune or ridiculous, all of them are just part of the trading journey every traders gone through daily. I had both good and bad days and I do not think this cycle would stop unless I quit trading. The point is, there are x amount of possibility to make a loss or profit when you pull any trades, you cannot get away from these probability. No trade is too good to pass on nor it is too bad to take, you just have to pull the trigger when your trading system or criteria ask you to, the worst you can do is second guessing yourself. Back to FCPO, market has been running into a huge consolidation phase if you zoom out and look at daily chart. ATR has dropped into bottom territory for the past seven months as the market travelled within 2,614~2,209 since Oct 2012. It is normal to expect high ATR range in the Bearish market due to high volatility but not lower than normal reading, which telling you the market is actually consolidating in the long run. On smaller time frame, market will tend to adjust it self if it move too high or too low. And that is what we are looking at right now, market went up to 2,340 previous high at 12th April 2013 and have to retreat due to overbought reading. Settle RM8 lower to 2,301 level, it will do two things from here, making higher low or path more way for further recovery if it could rally above 2,321 level today, or retrace further (Down trending) if the July contract went down below 2,285 level.

Daily Pivot Point
R2= 2342
R1= 2321
S1= 2285
S2= 2270
 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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