Market Overview 19th Dec 2011

 Monday, 19th Dec. The FBM KLCI ended slightly higher on previous Friday amid strong rallies on Asian regional index but worreis over European officials to curb their financial troubles from getting out of control are still in doubt. Other news to follow.

"- U.S. stocks on Friday finished with weekly losses after a rating agency warning on Europe pulled the plug on what began as an upbeat session on a confidence vote in Italy. After a 99-point rise, the Dow Jones Industrial Average DJIA -0.02%   declined 2.42 points, or less than 0.1%, to 11,866.39, the blue-chip index closing with a weekly drop of 2.6%. Down 2.8% on the week, the S&P 500 SPX +0.32%  rose 3.89 points, or 0.3% Friday, to 1,219.65, with energy up the most and utilities hardest hit among its 10 industry groups. The Nasdaq Composite COMP +0.56%   added 14.32 points, or 0.6%, to 2,555.33, leaving it down 3.5% from the week-ago close."

"-Most Asian markets advanced on Friday as strong U.S. economic data aided relief-buying after a string of recent losses, although trading was thin on concerns about the euro zone crisis and ahead of the weekend. China’s Shanghai Composite CN:000001 +2.01%  snapped out of a six-day losing streak to climb 2% to 2,224.84 and Hong Kong’s Hang Seng Index HK:HSI +1.43% gained 1.4% to 18,285.39. Japan’s Nikkei Stock Average JP:NIK +0.25%  ended 0.3% higher at 8,401.72, Australia’s S&P/ASX 200 index AU:XJO +0.47%  climbed 0.5% to 4,159.20, South Korea’s Kospi KR:0100 +1.15%  added 1.2% to 1,839.96 and Taiwan’s Taiex climbed 0.3% to 6,789.09."

"-Crude-oil futures fell Friday, capping a week of steep losses as investors stayed away from oil ahead of the weekend and its potential for uncertainty about the euro zone. Crude for January delivery CL2F -0.10%  declined 34 cents, or 0.4%, to $93.53 a barrel on the New York Mercantile Exchange. Oil traded as low as $92.52 and as high as $94.79 a barrel. For the week, oil fell 5.9%."

"-US soy futures extend their rally to end the week, climbing on worries about South America's crop and short-covering. Weather forecasts continue to show troubling dryness in South America soy-growing areas, which could limit the crop there and in turn steer more export business to the US. The market's bounce from Wednesday's close at $11 prompted traders to cover short positions, analysts add. Outside markets, while not supportive, weren't weighing on prices as they did early in the week, when Europe worries flared up. CBOT Jan. soybeans end up 18 1/4c, or 1.6%, at $11.30 a bushel.  March soyoil ends up 0.57c to 49.43 cents/lb, while March soymeal ends up $7.20 to $293.50 per short ton."

FKLI- First Break Out From The Triangle.

The FBM KLCI manage to rallies last Friday but not good enough to ended the week in positive territory. Although we are going through some important fundamental data (fourth quarter or yearly economy data) towards the end of year 2011, the stock market in general are still overshadowed by the European debt woes. It will be a busy week for U.S market as there are a few important announcement of their economy data, I.e: U.S housing starts, existing and new homes sales, third quarter GDP plus unemployment claims. Traders are advised not to over leverage and hold too much positions overnight as local stock index are susceptible to gap play the next session. Technically, the index futures has break out from the short term triangle mentioned last week, and if there is no major negative news regionally, this rallies are likely to sustain. Unfortunately,  it is still early to tell how well this positive momentum should retain as there was less volume and open positions recorded when the break out occur on last Friday. Any major selling pressure are likely to distort this uptrend. For today, support is expected around 1,462 level while resistance is pegged at 1,478.

Daily Pivot Point
R2= 1478
R1= 1473
S1= 1462
S2= 1456

 FCPO- Downside Risk Remain

CPO futures ended slightly higher previous Friday but ended the week in negative territory along with Soya oil weak price outlook. Palm oil futures are currently having strenuous selling pressure due to active supplies and inventories. For this near term, a measure of speculative positions across 11 products from wheat to coffee to cattle fell 3.6 percent to 258,071 futures and options in the week ended Dec. 6, Commodity Futures Trading Commission data show. That is the lowest since September 2009. According to CFTC's commitment of traders, speculators boosted their bearish soybean bets to 10,193 contracts last two weeks, the most negative since October 2006. Investors are also net-short in cocoa, wheat, soybean meal and
soybean oil, as well as copper and natural gas. Apart from that, World wheat stockpiles will total 208.52 million tons by June, 2.9 percent more than forecast a month earlier and the highest in more than a decade, the USDA said Dec. 9. Soybean reserves will be 1.5 percent bigger than last month’s estimate, and corn supplies will be 4.6 percent higher. Technically, the benchmark March Bearish momentum is likely to continue judging on series of lower high formation on hourly chart so far. Further Bearish momentum is expected if the benchmark Mar could breach previous low @ 3,170 which serve as major support at the moment. If this event materialize, the next support level will be place at 2,954~2,950. For today, market is expected to recover slightly due to Soya oil overnight price that ends up 0.57c to 49.43 cents/lb last Friday. Palm oil benchmark March is located around 3,030 level. 

Daily Pivot Point
R2= 3030
R1= 3007
S1= 2969
S2= 2954
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.