Thursday, May 22, 2014

FCPO: Prepare For Minor Rebound, Just Minor. 22nd May 2014

Thursday, 22nd May 2014. The benchmark August retreated for another session yesterday amid slower growth in export data announced on 20th May 2013. More news to follow.

"-U.S. stocks rebounded on Wednesday from the previous day’s losses and ended the session with solid gains, led by advances in the consumer discretionary and energy sectors.

The main benchmarks extended gains after the release of the minutes from the Federal Open Market Committee meeting, which showed officials considering options on exiting from ultra-loose monetary policy and a decision to remain flexible. The S&P 500 index SPX +0.81% closed 15.20 points, or 0.8%, higher at 1,888.03. The Dow Jones Industrial AverageDJIA +0.97%  gained 158.75 points, or 1%, to 16,533.06, the best percentage gain in 5 weeks. The Nasdaq CompositeCOMP +0.85%  ended the day up 34.65 points, or 0.9%, at 4,131.54."
"-Asia stocks closed mixed on Wednesday, with Japan down after the Bank of Japan kept its monetary policy on hold. The Nikkei Average JP:NIK +0.81%   settled 0.2% lower, and the Topix Index JP:I0000 +0.64%  dropped 0.3%. The yen USDJPY +0.02%   advanced against the greenback, trading at ¥100.92 from ¥101.258 in the prior session. Earlier, the Bank of Japan maintained its monetary easing programs and said Japan’s economy continued to recover moderately. South Korea KR:SEU +0.22%   and New Zealand markets also lost ground, down 0.2% and 0.5%, respectively. However, the Shanghai Composite Index CN:SHCOMP +0.84%   finished 0.8% higher, and Australia’s S&P/ASX 200 AU:XJO +0.68%   moved up 0.1%. The Australian dollarAUDUSD -0.30%   weakened, down to 92.32 U.S. cents from 92.37 U.S. cents on Tuesday. Hong Kong’s benchmark Hang Seng Index HK:HSI +0.46%  was up a modest 1.8 points at 22,836.52."
"- Oil futures topped $104 a barrel on Wednesday to settle at their highest level in a month after a U.S. government report showed a drop in weekly crude inventories that was much bigger than the market expected. In its first full session as a front-month contract, July crude CLN4 -0.14%  rose $1.74, or 1.7%, to settle at $104.07 a barrel on the New York Mercantile Exchange. Prices were trading around $103.39 before the government supply data were released. Based on the most-active contracts, prices haven’t closed at a level this high since April 21, FactSet data show."

FCPO- Every Moderate Sell Off Would Pause And Recover Eventually. 

Palm oil futures dropped down to 2,492 yesterday, breaching the psychological support at 2,500 level amid growing concern over export recovery. Cargo surveyors reported palm oil export for May did growth slower than expected with just 18% for the 20th May, compare to 26% growth on 15th May 2014. These numbers indirectly tell us that it would not be a good outlook for palm oil inventory as slow export does not do much to reduce stocks piling up. For shorter term perspective, palm oil futures is likely recover slightly today judging on Soy oil futures that went up to 40.42 cents per pound yesterday night. I know it is a vague to take Soy oil price recovery and factor in for today early session direction, but do not forget that this rival product does have 30% to 40% correlation factor to palm oil at any given time. For longer term perspective, palm oil futures is still heading south with lower high and lower low candle formation formed in hourly chart shown above. There is no telling when we can see promising recovery from the benchmark Aug yet. For this week, support is located around 2,486 while immediate resistance is located at 2,550 followed by 2,580 level. Conservative trader may want to disregard the price recovery and focus on trading with the Bearish trend, which going Short when the benchmark Aug stop and reverse when it hit 2,550 level. That is the level you would want to load up your Short for the moment. For today, pivot support is located around 2,489, resistance is pegged at 2,540.

Daily Pivot Point
R2= 2540
R1= 2522
S1= 2489
S2= 2474
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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