Wednesday, July 3, 2013

Downside Potential Magnified On Commodities Futures 3rd July 2013

Wednesday, 3rd July 2013. More downside potential awaits FCPO while FKLI signalling temporary retracement. Other news to follow.

"-U.S. stocks ended lower Tuesday, losing steam gained from reports showing solid growth for car sales and factory orders as investors anticipated the jobs report at the end of the week.

The Dow Jones Industrial Average DJIA -0.28% closed down 42.55 points, or 0.3%, at 14,932.41, with shares of General Electric Co. GE -1.89%  and Boeing Co. BA -1.71%  the day’s worst performers. The Dow industrials had traded as high as 74 points earlier in the session. The S&P 500 SPX -0.05%  slipped 0.88 point to close at 1,614.08, with industrials and materials lagging the most. The index was up as much as 9 points earlier. The Nasdaq Composite COMP -0.03%  fell 1.09 points to finish at 3,433.40, even though Apple Inc. AAPL +2.27%  shares finished the day up 2.3%. Earlier, the index was up as high as 19 points."
"- Benchmark U.S. crude-oil futures breached the $100-a-barrel level in electronic trade late Tuesday, buoyed by a bullish weekly inventory report and political developments in Egypt. August crude CLQ3 +1.67% rose to a 52-week high of $100.64 a barrel, up from the close at $99.60 on the New York Mercantile Exchange. "
"-August Soybeans finished down 2 3/4 at 1433 1/2, 11 1/2 off the high and 3 1/4 up from the low. November Soybeans closed down 3/4 at 1242 1/2. This was 7 1/2 up from the low and 10 off the high.
August Soymeal closed unchanged at 432.9. This was 1.9 up from the low and 5.7 off the high. August Soybean Oil finished up 0.01 at 46.83, 0.17 off the high and 0.33 up from the low. The soybean market traded mixed today with moderate gains seen in the July contract while August and November soybeans traded slightly lower throughout the session. Weather patterns remain favorable for crop development this week but the trade is monitoring a high pressure ridge located to the west that could push more threatening temperatures into states like the Dakotas, NE, and KS by the 17th of July. The confidence in the forecast remains low but the trade is likely to remain highly sensitive to any type of drying pattern. The nearby CIF market was modestly weaker due to a slowdown in export interest but interior processor bids and meal premiums continue to be offered at strong levels. A well-followed oilseed analyst suggested today that the EU is likely to increase imports of soybeans for processing due to the delays in shipping meal out of South America. Brazilian truckers announced that they would begin a 3 day strike today although traders noted that no significant delays to loading vessels would be seen unless the strike continues into next week. The Brazilian Real lost ground to the US Dollar today and traded down near 2.24. The softer trade in the Real could help spur on fresh farmer sales in Brazil and improve their export outlook going forward."



FKLI- Inches Up Gradually Approaching Major Resistance Level. 

Index futures is making its way to previous major resistance around 1,800 level, after it manage to rebound promisingly from 1,720 previous weekly support level. When the market reach its lowest weekly or even monthly low, traders would have weak sentiment hard coded in their mind and when the market is reaching its previous weekly high, outlook will always be better than expected. These kind of perception will always stay in any trader mind and it was a lethal mistake to stay informed. What you might have missing out was looking at market previous low / support and previous high / resistance. The 1,720 happens to be a strong weekly support when the index futures manage to bounced off from that level early Tuesday, last week. That also explain how to index futures could recovered substantially after it recovered from that level. Now, it is gradually approaching its weekly previous high / resistance. Only time will tell would history repeat itself again. Two scenario to expect when the market approaching this major resistance. Scenario one, the market retrace right after it approach 1,790~ 1,800, this prompt for a Short set up. Scenario two, the market did not retrace, but break out above 1,800 level, this call for a Long set up, but for this particular traders are advised to wait for some retracement as market would come to exhaustion after the break out. For the time being, some retracement is expected judging from yesterday weaker closing value that made the index futures closed with a first Bearish candle / hammer. Today, pivot support for July contract is located around 1,763 while resistance is pegged at 1,780.  

Daily Pivot Point
R2= 1786
R1= 1780
S1= 1769
S2= 1763


FCPO- Downside Remain.

Palm oil futures made another lower low again yesterday after the benchmark Sept kept on testing its three session low around 2,341~2,340 level. The Sept contract break down below 2,340 level and keep on retracing down to 2,324 level, the lowest in five weeks at least. Over stock piles was the main concern for the price to retrace further for the moment as demand could not pick up with the pace plus increasing productions worsen the condition. Technically, there is still no sign for the market to recover substantially or Bullish reversal sign for current descending momentum. Market is still travelling with downside velocity and any attempt to for the market to recover would spur more chances to Short when the rally is fading. More lower high and lower low have formed, making a Bearish statement across almost all time frame in the chart. For today, pivot support for the Sept contract is located around 2,303 while resistance is pegged at 2,359.

Daily Pivot Point
R2= 2379
R1= 2359
S1= 2321
S2= 2303
 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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