Thursday, October 16, 2014

FCPO: Recent Support Range Broken, Bears Are Mauling 16th Oct 2014

Thursday, 16th Oct 2014. Palm oil futures went down and this time, it mean new business to South. Other news to follow.

"- Interconnected worries over deflation, a potential rerun of the eurozone debt crisis and some surprisingly rotten U.S. economic data shocked investors on Wednesday, triggering a whipsaw session that saw stocks plunging only to trim losses before the final bell. It was panic mode in the early going and again in the afternoon. The DowDJIA, -1.06%  dropped by around 460 points and were on track for the biggest one-day percentage drop in three years before a late rebound. In the end, the index finished down 173.45 points, or 1.1%, at 16,141.74.The S&P 500 SPX, -0.81% temporarily erased its gain for the year but also trimmed losses by the end of the session. The small-cap Russell 2000 RUT, +1.02%  , which has been under heavy pressure this month, led the late rebound, finishing the day with a 1% gain.

The S&P 500 recorded a decline of more than 9% from its intraday peak reached on Sept. 19 to its trough on Wednesday."
"-Stocks in Asia were mostly higher Wednesday, with markets in Japan and Indonesia rebounding to lead the way as Chinese inflation data gave investors hope for fresh stimulus for the world’s second-largest economy. The Nikkei Stock Average NIK, -2.44%  finished up 1% at 15,073.52, while Indonesia’s Jakarta Composite Index JAKIDX, +0.82%  gained 0.8% to 4,962.94, and Australia’s S&P ASX 200 XJO, -1.14% gained 0.7% to 5,245.60. Investors appeared to hunt for bargains after the market suffered heavy losses earlier this week, fueled by worries over the pace of global economic growth and anticipated tightening of U.S. monetary policy. In Japan, the Nikkei rose from a two-month low and broke a five-session losing streak as investors bought exporters benefiting from dollar strength. The dollarUSDJPY, +0.08% traded at ¥107.21, versus ¥107.06 late Tuesday in New York."
"- Crude-oil inventories rose by 10.2 million barrels in the week ended Oct. 10, the American Petroleum Institute said late Wednesday, according to reports. Gasoline supplies declined by 3.1 million barrels, and inventories of distillates were down by 200,000 barrels. The API report comes a day ahead of more closely watched data from the Energy Information Administration due Thursday. Analysts polled by Platts expect the EIA to report a supply increase of 2.5 million barrels. Both reports were delayed by a day due to Monday's Columbus Day holiday. "


FCPO- The Game Is On, Negative Slope Trend Is Coming. 


Palm oil futures broke down below medium term major support level at around 2,136 level yesterday for the first time, signalling further retracement this month. The new benchmark Jan 2015 contract will take over the active month soon, but the rest of the story will remain the same. The current story for palm oil futures would be, retreating Bulls giving way to Bears. This round, Bears are likely acquired an edge by taking out the medium support level around 2,136 lately. And couple with double digit negative export figures plus recent lower Soy oil futures, this downward pressure is likely turn into a good old correction. On the technical side, we are expecting previous support level become resistance level around 2,136 level if the market open lower and continue to breach new low below 2,110 today. As always, there would not be a straight line retracement but rather a few recovery along the way of this short term correction. The benchmark Jan 2015 is looking to open slightly lower today judging on current Soy oil futures is hovering around 32.10~32.20 level, which is 0.30 cents lower compare to yesterday 6.00pm GMT. For today, pivot support is locating around 2,087 while resistance is pegged at 2,162.

P/s: Most analyst is blaming Soy oil and other commodities weakness on crude oil, they are related but not entirely correlated. We all know what happen to a trader when you trade with correlation.

Daily Pivot Point
R2= 2189
R1= 2162
S1= 2111
S2= 2087
 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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