Thursday, November 27, 2014

FCPO: Going Somewhere ? 27th Nov 2014

Thursday, 27th Nov 2014. Palm oil futures made a tricky U turn for the past two session after it break below 2,196~2,193 support level. Other news to follow.

"-The S&P 500 and Dow Jones Industrial Average ended slightly higher on Wednesday, scoring their 47th and 30th record closes this year, respectively. Trading on Wall Street was thin with many participants taking off early for the Thanksgiving holiday. Markets will reopen on Friday for a shortened session ending at 1 p.m. The S&P 500 SPX, +0.28%  closed 5.74 points, or 0.3%, higher at 2,072.77. The Dow Jones Industrial Average DJIA, +0.07%  added 12.81 points, or 0.1%, to 17,827.75."

"- Japan stocks nudged lower on Wednesday, snapping a three-day winning streak, as the yen crept higher against the greenback. The Nikkei Average NIK, -0.27%  dipped 0.1%, while the broader Topix I0000, +0.03%  edged 0.2% lower. Meanwhile, the yen USDJPY, -0.15%  traded little changed versus where it was a day earlier, around ¥117.85."

"- Oil futures remained lower Wednesday after the Energy Information Administration said U.S. crude inventories unexpectedly rose last week. The agency said stockpiles rose by 1.9 million barrels. Analysts surveyed by The Wall Street Journal had forecast stocks to fall by 100,000. Ahead of the data, January WTI oil CLF5, -0.85% slumped to a new four-year low after closing Tuesday at its lowest level since September 2010. Oil remains down 9 cents, or 0.1%, at $74.01 a barrel."

FCPO- No Clear Direction

There was no clear cut direction for the moment trading in FCPO market. None, not even a 100 points rally or retracement. The downside about trend trading would be its slow to re-act as most trend following system only went in to the market when a trend is already established few session ago. But ironically, that slowness of re-action is trend following is crucial to filter out most fake outs trend before that rally or retracement can confirm as a uptrend or down trend. If you think this would in time turn out to be an advantage or a better system, think again. Every trend trader will have certain entry and exit rules depends on their system, and if market only move within a certain points range, that trend trader will be scratching his head as most of the position will turn out to be a stop losses, break even or worst whipsawed. No system can be perfect, it is the trader job to implement risk management that will work along with the system, maybe the profit and losses expectation will deviate from the system testing environment but that is something we need to deal with and not to discard it. Back to palm oil outlook, palm oil benchmark Feb is making U turn recovery after it break below 2,196~2,193 major support level, this level was also a break down after a significant congestion area. I bet most of the break out trader would Short around that level too. If you look at the hourly chart, there is no conviction or promising sign for this recovery either. The Feb contract need to breach above 2,150 level and keep going for another 40 points to shine out as a strong rally this year. Other than that, the Feb contract is likely to hover within 2,180~2,286 level  until the end of year.

Daily Pivot Point
R2= 2266
R1= 2252
S1= 2215
S2= 2192
 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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