Tuesday, October 14, 2014

FCPO: Sideways On The Way To Recovery 14th Oct 2014

Tuesday, 14th Oct 2014. Palm oil futures went down again since past few session consecutively amid weakness on Soy oil and recent news about negative export figures. Other news to follow.

"-The U.S. stock market ended Monday’s volatile session sharply lower as selling intensified at the last hour. Volatile trading came on the heels of last week’s deep losses that had been triggered by global economic growth concerns. Monday’s trading marked the fifth consecutive day of 1% moves for the S&P 500 and triple-digit moves for the Dow Jones Industrial Average. Key technical levels were in focus, especially as there was no data on the economic calendar and bond markets were closed for Columbus Day holiday. The S&P 500 SPX, -1.65%  closed down 31.39 points, or 1.6%, to 1,874.74. The benchmark index has pulled back more than 6% from its peak reached on Sept. 18. All of the main benchmarks are trading below their 200-day moving averages. Falling below the 200-day moving average level, and in the case of the S&P 500, below the 1,900 level, is considered significant as many analysts see the breach as a sign of further declines. Vote here: Does this stock slump have further to go? The Dow Jones Industrial Average DJIA, -1.35%  dropped 223 points, or 1.3%, to 16,321.07. The blue-chip index turned negative for the year on Friday and is now down 1.5% year-to-date. The Nasdaq Composite COMP, -1.46%  dropped 62.58 points, or 1.5%, to 4,213.66. The Russell 2000 RUT, -0.38%   gave up solid gains of early morning and closed down 4.3 points, or 0.4%, at 1,049.17."

"-Hong Kong stocks erased earlier losses and closed higher on Monday, as China’s trade data for September beat expectations. The Hang Seng Index HSI, +0.24%  opened lower on a negative U.S. lead from the end of last week, but ended the session higher by 0.2%."

"CPO Futures Higher on Strong Export Performance
Kuala Lumpur: Crude palm oil (CPO) futures prices on Bursa Malaysia Derivatives closed higher yesterday, thanks to September’s strong export performance. According to Cargo Surveyor Intertek Testing Services, exports of Malaysian palm oil products during the month rose by 16.3 per cent from a month earlier to 1.5 million tonnes. Phillip Futures Sdn Bhd derivative product specialist, David Ng, said India was aggressively purchasing palm oil and the current price was deemed attractive to restock ahead of key festivals like Deepavali. At the close, October 2014 added RM27 to RM2,232 a tonne, and January 2015 increased RM23 to RM2,233 a tonne. November 2014 and December 2014 decreased by RM32 and RM25 to RM2,227 a tonne and RM2,217 a tonne, respectively. Volume advanced to 43,225 lots from 26,489 lots recorded on Monday while open interest increased to 305,698 contracts from 286,208 contracts on Monday. On the physical market, October South was up RM20 at RM2,240 a tonne. Bernama"

FCPO- Sideways In Play 

Palm oil futures is testing previous session day high and low or what it is call as 35 points to 80 points sideways market. Most of the trend trader or medium term trader might find it impossible to maneuver this condition, not because they are not capable of but because of their trend following system does not allow it. Imagine Buying at the day high and price dip about 30 points to 50 points the next session or vice versa are common situation every trend trader face currently. Despite how the market behave, we need to keep trusting and trade within the scope of our trading system or trading plan. Every trading system has it strength and weakness, and it need time to work. These are the major range we are talking about, 2,224 ~ 2,137 area. The benchmark Dec has to breach above or below these range in order to break out from current ranging market. Even if these range is taken out, the benchmark Dec might not head straight along with the break out movement, instead price might linger around the break out area for few sessions until everything settle down and start moving again. Traders patient and time will be tested the most coming to the end of four quarter. On external side, palm oil export for the first 10th Oct vs Sept was down about 18%, bad news coming back so soon.

Daily Pivot Point
R2= 2209
R1= 2187
S1= 2147
S2= 2129
 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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