Tuesday, March 18, 2014

FCPO: Sluggish Export Halt Rally 18th March 2014

Tuesday, 18th March 2014. The palm oil futures for new benchmark June contract went down for another session yesterday amid weaker than expected report on export figures.

"- U.S. stocks finished Monday with strong gains as investors shrugged off the narrow scope of EU and U.S. sanctions following the vote in Crimea in favor of leaving Ukraine. Investors instead focused on better-than-expected economic data, including industrial production and manufacturing activity in the New York region. Technology and industrials sector stocks led the gains on the benchmark index. The S&P 500 SPX +0.96% ended the day 17.70 points, or 1%, higher at 1,858.83, finishing above a technical level of 1,850. The index turned positive year-to-date. The Dow Jones Industrial Average DJIA +1.13% gained 181.55 points, or 1.1%, to 16,247.22, rising for the first time in 6 sessions. All 30 members of the blue-chip index rose on Monday. TheNasdaq Composite COMP +0.81% finished the day 34.55 points, or 0.8%, higher at 4,279.95. "

"-Stocks in Japan and Hong Kong slipped as investors nervously awaited for the West’s response to Crimea’s vote to break away from Ukraine and join Russia, which has drawn international condemnation. Stock markets across Asia Pacific were mixed after the referendum Sunday in Crimea, the latest development in the volatile region, amid rising worries over another possible military incursion into Ukraine by Russia. Tensions there have weighed on global markets in recent weeks. Japan’s Nikkei lost 0.4%, while Australia’s benchmark S&P ASX 200 shed 0.2% and South Korea’s Kospi gained less than 0.2%. In China, the Hang Seng Index in Hong Kong lost 0.4% and the Shanghai Composite was flat."

"- Gold futures settled lower on Monday, putting an end to a five-session streak of gains as a rally in U.S. equities drew investors away from the precious metal. Economic sanctions by the U.S. and European Union aimed at a small group of Russian and Ukrainian officials were seen as minimal, also dulling the need for the perceived safety of gold. Gold for April delivery GCJ4 -0.57%  fell $6.10, or 0.4%, to settle at $1,372.90 an ounce on the Comex division of the New York Mercantile Exchange, giving back most of Friday’s 0.5% gain. May silver SIK4 -0.40%  closed down 14 cents, or 0.6%, to $21.275 an ounce."

FCPO- Slowing Down Rally 


Weaker than expected palm oil export reported for 1-15th March vs Feb was likely the culprit behind recent price retracement. The new benchmark June has fall about 6.1% from the 2,916 peak last week. Although it is normal for any uptrend market to retracement about 10%, only time can tell how much this retracement would take us to. There is no practical number for us to expect this retracement to stop and start rally, not even the notorious Fibonacci retracement ratios. Fib ratios have so many level that it would eventually hit any of those level to rebound, simply does not provide any of you any clue where the retracement would stop. Instead of using complex level and ratios to predict, drawing diagonal line such as resistance or support trend line is far better option and provide you clear cut indication market has reverse its role, at least a potential reversal. Long term palm oil futures technical outlook remain positive but we are sitting on temporary retracement due to weak data. Things like these would dampen price from rallying straight, giving much opportunity for other traders who missed out to go Long. It is a normal condition for any uptrend market to have occasion retracement or profit taking, this condition is less likely jeopardize current uptrend session that has been breaking multi-months highs. For today, the benchmark June contract is likely open lower due to weaker closing price on Soy oil that went down amid temporary reduced demand from China and India.

Daily Pivot Point
R2= 2766
R1=2758
 S1= 2730
S2= 2720
 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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