Impending Weakness On FCPO 6th Aug 2013

Tuesday, 6th Aug 2013. Take two high and compare if the subsequent high was lower. If it does you will have what it call the sign of further weakness. Other news to follow.

"- U.S. stocks mostly fell on Monday, with benchmark index pulling away from record highs, as Wall Street considered a report indicating better-than-expected growth in the service sector and a Fed official’s remarks that the central bank is closer to curbing its asset purchases.  Recouping from what began as a 73.53-point fall from Friday’s record finish, the Dow Jones Industrial Average DJIA -0.30%  lost 46.23 points, or 0.3%, to 15,612.13. United Technologies Corp. UTX -1.05%   paced the losses that included two thirds of the index’s 30 components. The S&P 500 index SPX -0.15% shed 2.53 points, or 0.2%, to 1,707.14. Utilities and industrials paced sector declines, while technology and consumer staples performed the best among the index’s 10 major industry groups."

"- Japanese stocks retreated Monday as several financial and technology firms pulled back from strong recent advances, while mainland Chinese shares edged higher after data showing an improvement in services-sector activity in the country.

The Nikkei Stock Average JP:NIK -1.33%  fell 1.4% in Tokyo, after rallying in the previous two sessions, while Australia’s S&P/ASX 200 AU:XJO -0.14%  slipped 0.1% and South Korea’s Kospi KR:SEU -0.65%  eased 0.4%. The Shanghai Composite Index CN:SHCOMP +1.04%  gained 1%, while Hong Kong’s Hang Seng Index HK:HSI +0.14%  inched up 0.1%."

"-Oil futures lost a little ground on Monday, as traders digested news about Libya resuming some oil production as well as better-than-expected data on the U.S. services sector. Crude oil for September delivery CLU3 -0.15% pulled back 38 cents, or 0.4%, to settle at $106.56 a barrel on the New York Mercantile Exchange."

"-August Soybeans finished down 1 1/4 at 1329 3/4, 6 1/4 off the high and 11 1/4 up from the low. November Soybeans closed up 1 3/4 at 1183 1/4. This was 12 3/4 up from the low and 5 1/2 off the high.

August Soymeal closed down 9.5 at 402.6. This was 1.9 up from the low and 10.1 off the high. August Soybean Oil finished up 0.34 at 42.72, 0.07 off the high and 0.65 up from the low. Weather leans negative for market direction but scouts continue to note that soybean growth in the northwestern portion of the growing region is behind schedule and warmer temperatures would be helpful. Overnight temperatures for much of this region will be in the mid-50s at times this week. A private grains analyst released estimates for what they thought the USDA would report on their August 12th supply and demand report. The US soybean crop was seen at 3.266 billion bushels, down from their prior estimate and compared to the USDA forecast of 3.42 billion bushels. The yield was estimated at 42.7 bushels per acre down from 43.9 previously and below the USDA forecast of 44.5. Keep in mind, total usage for 13/14 according to the USDA is estimated at 3.264 billion bushels which suggest there could be major balance sheet revisions on the way. Wires reported late Friday that the Chinese would release 500,000 tonnes of soybeans out of reserves but sources noted that it was still cheaper to import supplies from Brazil. Fund traders still hold a sizeable net long position in the soybean and meal market even after cutting each by over half last week. A favorable weather outlook could force additional long liquidation ahead of the August 12th USDA report. Crop condition ratings will be released this afternoon and some see G/E ratings at steady to 1% higher. Conditions were estimated at 63% G/E last week and 9% P/VP. Export interest continues to slow and inspections for the week ending August 1st were reported at 1.4 million bushels, steady from week ago levels and there are 4 reporting weeks left in the marketing year. Shipments needed each week to hit the USDA export estimate are at 6.9 million bushels, up from 5.9 the week prior. The cumulative shipment pace is at 97.7% of the USDA forecast vs. the 5-year average of 94.5%." 

FCPO- Lower High Formed

Most of the readers here or traders would know that lower high and lower low are the potent signal for further weakness as Buyers are unable to push the price higher above previous high. This is a sign that, no new commitment for the Buyers to convince more new Buyers to come and Buy above that high. A lower high is a obvious sign that showed lesser commitment by the Buyers to support the market when the price retrace down after it approach previous high. And lower low is a confirmation signal that showed most Buyers have turn their side to Sellers by getting into the opposite positions they previously have. What you can see from the hourly chart is a early call for the market to retrace further judging from the Bearish price formation. On contrary for today, the benchmark Oct is likely open higher due to substantial recovery on overnight Soy oil. The most active traded Aug contract for Soy oil recovered about 0.34 cents to 42.72 cents per pound. According to Reuters survey, MPOB data report might be grim news to the market as palm oil production is likely to increase about 10% due to favorable weather, while stocks decrease about 3% to 1.6 million tons and export up about 3%. Price would be hammer down as supplies is going to go up gradually due to 10% increase in production. For today, pivot support for the benchmark Oct is located around 2,226 while resistance is pegged at 2,273.

Daily Pivot Point
R2= 2273
R1= 2255
S1= 2226
S2= 2215
 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.