Tuesday, April 1, 2014

FCPO: No Sign Of Price Recovery Yet 1st April 2014

Tuesday, 1st April 2014. Palm oil futures for June contract retrace for another session yesterday amid weak report on palm oil export for March vs Feb 2014. Other news to follow.

"- The U.S. stock market closed higher on Monday, while quarterly performance for the main indexes was mixed. The benchmark S&P 500 showed resilience this quarter despite geopolitical uncertainties and the curtailing of monetary stimulus. The S&P 500 SPX +0.79%  ended the day 8.41 points, or 0.5%, higher at 1,872.34, and recorded a 0.7% gain for the month. The benchmark index extended its quarterly winning streak, gaining 1.3% over the past three months.

The Dow Jones Industrial Average DJIA +0.83%  jumped 134.60 points, or 0.8%, to 16,457.66 and is 0.8% higher on the month. However, the blue-chip index lost 0.7% over the past quarter. The Nasdaq Composite COMP +1.04% finished the day up 43.24 points, or 1%, at 4,198.99. The tech-heavy index is down 2.5% for the month, its worst performance since October 2012. It still managed to eke out a 0.5% quarterly gain."
"-Asian stocks were mostly higher on Monday, at the end of a quarter that was characterized by poor performances in China and Japan and reviving fortunes in Southeast Asia. The declines in the region’s two largest economies, with Japanese stocks on track for their worst quarter in nearly two years, marked a reversal of a key investment trend from late last year when investors shifted away from Southeast Asian markets to North Asian countries that they expected to benefit from a pickup in the global economy. But investors have shied away from Japan and China, with the Nikkei Share Average down 9.4% so far this year and the Shanghai Composite Index 3.7% lower. Sentiment has been soured in Tokyo by the potential economic impact of a hike in the local consumption tax, which will take effect on Tuesday. China however, has been bogged down by persistently poor economic data, as well as rising fears of debt defaults in the corporate sector."
"- Oil futures settled modestly lower on Monday as disappointing data on Chicago-area businesses contributed to a pullback in prices from a nearly three-week high, but hopes for stimulus measures from China provided support, helping the commodity score a quarterly rise.
Crude oil for May delivery CLK4 -0.20%  fell 9 cents, or 0.1%, to settle at $101.58 a barrel on the New York Mercantile Exchange. Based on the most-active contracts, crude futures fell 1% for the month, but gained of 3.2% for the quarter and year to date, according to FactSet data."

FCPO- Still Weak Ahead

I hope market does pay head to April fool news but it does not, unfortunately. I was wishing for a better than expected export data, record low inventory and slow production would come out this April, but that would remain a wish. Palm oil futures is still travelling South, no sing of life to recover yet. And if you notice, it was few popular analyst or speaker who spoke of palm oil futures hitting RM3,000 level on the month of June 2014. Well, they might be right saying just that based on seasonal cycle, if the market is hitting June the benchmark month for palm oil futures would be September. Couple with festive season around that corner, it would not be a surprise price will have some positive reason to recover. But for now, those analyst went silence as palm oil futures continue to tank lower and lower each passing day. Many would assume or take this as retrace with previous uptrend still intact because benchmark June just correct 10% from the 2,916 peak. Of course we can expect 8% to 12% retracement on any typical uptrend but is there any "typical" trend we can spot over these years ? Every price movement in the market is unique, it may repeat or appear similar in some degree but 70% of any trend is different. With the velocity and time it needed to go up and retrace, you would not say it is the same trend but the technique and strategy you would use profiting from these move, would not be much different. For this week, we are still expecting the benchmark June to retrace further as there is no sign for the price to recover. All candle formations formed so far in lower time frame and higher time frame such as daily chart have been lower lows and lower highs. Both of these candle formations clearly indicate prolong weakness, at least until we see any Bullish candle formation such as higher low plus higher high. Today, pivot support for benchmark June is located around 2,619 followed by 2,602 while resistance is pegged at 2,660 followed 2,684.

Daily Pivot Point
R2= 2684
R1= 2660
S1= 2619
S2= 2602
 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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