Market Overview 1st Dec 2011

Thursday, 1st Dec. The FBM KLCI jumped to at least 4 weeks high yesterday with most of the heavy weighted shares rose unanimously despite other regional benchmark which closed lower. Other news to follow.

"- U.S. stocks rallied Wednesday, with the Dow industrials chalking up their best day in more than 2 ½ years, as the Federal Reserve and five other central banks moved to help banks hit by Europe’s debt crisis. Following up on October’s 9.5% rise with a 0.8% gain for November, the Dow Jones Industrial Average DJIA +4.24%  surged 490.05 points, or 4.2%, to 12,045.68, its first finish above 12,000 in two weeks and biggest jump since March 23, 2009. Capping its largest three-day percentage climb since March 12, 2009, the S&P 500 Index SPX +4.33%  added 51.77 points, or 4.3%, to 1,246.96, its best day since Aug. 11 and leaving the index off 0.5% for the month. Marking its largest jump since Aug. 23, the Nasdaq Composite COMP +4.17%  advanced 104.83 points, or 4.2%, to 2,620.34, down 2.4% from the end of October."

"- Asian stocks ended mostly lower Wednesday, with miners and banks losing ground on the last trading day of a weak month, as uncertainly over Europe flared back up. Hong Kong’s Hang Seng Index HK:HSI -1.46%  lost 1.5%, while China’s Shanghai Composite index CN:000001 -3.27%  dropped 3.3%. Japan’s Nikkei Stock Average JP:NIK -0.51%  and South Korea’s Kospi KR:0100 -0.49%  each declined 0.5%, though Australia’s S&P/ASX 200 index AU:XJO +0.43%  managed to shed losses, finishing 0.4% higher."

"-Crude-oil futures ended at their best in two weeks and north of $100 a barrel on Wednesday on hopes for improved liquidity in the international financial system after central banks around the world took coordinated action to lower borrowing costs. Crude oil for January delivery CL2F +0.15%  rose 57 cents, or 0.6%, to settle at $100.36 a barrel on the New York Mercantile Exchange."

"-US soybean futures end higher, fueled by broad speculative buying as macroeconomic fears ease for the moment following the central-bank coordination aimed at improving liquidity for European banks. Sharp declines in the US dollar served as the catalyst for soy's gains as traders are optimistic the weaker dollar will spur export demand. However, futures ended well off intraday highs, paring gains amid lingering fears of slower-than-expected demand. CBOT January soy ends up 6 1/4c at $11.31 1/4 a bushel. Soy product futures bounced in step with advances in soybeans. The supportive influence of external financial markets buoyed prices, with soymeal garnering additional support from traders covering shorts at the end of the month after Tuesday's declines, analysts say. CBOT Jan soymeal ended up $4.20 at $292.20/short ton, and Jan soyoil ended up 0.07c at 49.50 cents/lb.

FKLI- Rallies Swiftly After Previous Correction

Cash composite has just took off to at least 4 weeks high right before the market closed for the day. It was a slightly overextended rallies for the FBM KLCI and index futures yesterday when both of the instrument rose more than 2% in the late afternoon session. It is more profitable to find out the higher possibilities right before the market took off rather to figure out why such strong rallies occur. It is a trader's focus to look out where is the lowest risk to enter the market and get off the ride when the risk is building up of their position. Example, you have some Longed positions sitting on a nice gain in an uptrend market, volatility will eventually build up if the market rose to few weeks high, that is where you should consider getting out of your positions. At close, the Dec contract rose 31.50 points to 2.18% to 1,477.50. Technically, the index futures for Dec contract positive momentum have took off to a new high after the market steadily formed higher lows and higher high formation on hourly chart. For today, it might pause for a moment judging from yesterday overbought condition. The Dec contract retracement is expected to stop around today's pivot support level shown below.

Daily Pivot Point
R2= 1502
R1= 1490
S1= 1453
S2= 1428

FCPO-  Too Strange To Call This Is A Technical / Healthy Correction

 CPO futures weakness travel to a new low today amid Bearish expectation on palm oil demand on the coming month. At close, the benchmark Feb went down lower about RM44 to 3,018, it went to the low of 3,011 level right before the closing bell, signifying last minute Long covering before the market settled. Up until now, the benchmark Feb has fallen about 250 points or 7.6% from the 3,270 level, a swift revenge from Bears. It will be strange to say that palm oil prices outlook still look healthy at the moment as previously I mentioned that expect this so called "technical" correction is nothing worry about. Obviously that was not the case, the benchmark Feb has dropped to a level that we can barely called it was a healthy correction. Weather condition that expected to reduced palm oil supplies does not help at all as palm oil prices continue to drop further since last week.  For this near term, market is still susceptible to fall further judging from the lower highs and lower lows candles formed on hourly chart (shown above). To make matters worse, there is yet any major support level other than the psychological support level at 3,000 plus negative export data announced yesterday. The bad thing about psychological level in any market is it tend to serve as a catalyst once this level is broken. Example, market is expected to fall further if the Psychological support level is breach.
Full month Nov vs Oct Export Data:
Malaysia November Palm Oil Exports Drop 8.7% To 1.54 Mln Tons -SGS.  Malaysia November Palm Oil Exports 1.53 Mln Tons, Down 9% -Intertek

Daily Pivot Point
R2= 3116
R1= 3067
S1= 2990
S2= 2962
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.