Thursday, February 20, 2014

FCPO: First Sign Of Retracement ?

Thursday, 20th Feb 2014. Time flies when you are having fun and the date is coming to an end for February month. More development on palm oil futures, the price for May contract is showing sign of further retracement for the first time after it closed at the low yesterday. Other news to follow.

"- U.S. stocks closed lower on Wednesday after the minutes from the Federal Reserve’s policy setting meeting revealed little consensus about when short-term rates would begin to rise.

A larger-than-expected drop in home construction in January also weighed on sentiment. The S&P 500 index SPX -0.65%  broke a three-day winning streak, closing 12.01 points, or 0.7%, lower at 1,828.75. At session highs, the benchmark index was within a hair’s breadth from its all-time high reached on Jan 15. The Dow Jones Industrial AverageDJIA -0.56% also had a volatile session, at one point adding as much as 95 points. But the blue-chip index ended the session 89.84 points, or 0.6%, lower at 16,040.56. The Nasdaq Composite COMP -0.82% snapped its eight-day winning streak, dropping 34.83 points, or 0.8%, to 4,237.95."
"- Asian markets mostly edged higher on Wednesday, though Japanese stocks retreated after a sharp gain in the previous session. The Nikkei JP:NIK -1.06%   ended down 0.5% at 14766.53, pulling back from a sharp 3.1% rise in the previous session that was sparked by a surprise move by the Bank of Japan. Stocks in Tokyo had enjoyed their best daily performance since August on Tuesday after the central bank took steps to encourage bank lending, raising expectations of looser monetary policy in the future. Also in Tokyo, the yen strengthened during Asia trade, another sign that the positive sentiment created by the Bank of Japan didn’t survive into a second session. The dollarUSDJPY -0.20%   was last trading at ¥102.09, after gaining 0.4% on Tuesday, compared with ¥102.35 late Tuesday in New York."
"-Natural-gas futures rallied 11% Wednesday to their highest settlement in more than five years as the latest U.S. weather forecasts called for more severe cold, fueling worries about already tight supplies. Oil futures, meanwhile, topped $103 a barrel to reach a four-month high, also finding support from the cold weather, which buoyed expectations of demand for oil products. March natural gas NGH14 -1.58%  surged 60 cents, or 11%, to settle at $6.149 per million British thermal units on the New York Mercantile Exchange. Prices, tracking the most-active contracts, marked their highest settlement since December 2008, FactSet data show. Year to date, futures prices for the heating fuel have gained around 46%. Oil futures also climbed on the back of the cold weather forecasts, with heating oil leading the percentage gains. March crude oil CLH4 +0.01%  climbed 88 cents, or 0.9%, to end at $103.31 a barrel on Nymex, after trading as high as $103.80. The settlement was the highest for a most-active contract since October of last year."

FCPO- Bulls Might Take A Breather

I hope you enjoyed staying "toe to toe" or riding along this upside since two weeks ago and believe me everything that goes up must come down eventually. We just do not know the time and date for that. Market moves is a wave pattern, it can surge and flow down at the same time within a day and if you are trading longer term or holding overnight, you should be prepare certain draw down amount if the positions are taking losses. Now this scenario will applicable for those who Longed the benchmark May contract when it breached above 2,700 level or above 60 days high. Sort of turtle's trade but no entirely, those who Long at that level must prepare to take certain paper losses when the market did pull back from the high. How much would be entirely based on certain percentage from the equity, i.e: five percents would be a standard practice. Now that was the game plan for longer term trader, for intraday trader, most of us would just go with the flow or the surge of the market. If the market is ripe for profit taking in a uptrend, we go Short and vice versa to go Long when it hit intraday support level. But all this action is only possible when that trader run their trade without prejudice and stick religiously to their plan. Overall outlook, the benchmark May might be showing early sign of pull back when it closed just 10 points above the low of yesterday. For today, we are expecting the benchmark May to open neutral, follow by retracing further down but not anything below 2,680 level and recover mostly of the time for afternoon session. The May contract is also, able to create another new high even though overnight Soy oil did not close any higher. Pivot support for May contract is located around 2,698 while resistance is pegged at 2,748.

Daily Pivot Point
R2= 2748
R1= 2730
S1= 2698
S2= 2684
 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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