Market Overview 10th May 2012

Wednesday, 9th May 2012. The FBM KLCI inches up for the second straight time as it recovering from previous Monday sell-off. Other news to follow.

"- U.S. stocks declined Wednesday, leaving the Dow industrials in the red for a sixth session, as investors fretted about political uncertainty in Greece and the funding of Spanish banks. After a 183-point slide, the Dow Jones Industrial Average DJIA -0.75%  ended at 12,835.06, off 97.03 points, or 0.8%. The losing streak is the longest for the blue chips since an eight-day stretch that ended Aug. 2, 2011. The Dow has shaved 444.26 points, or 3.3%, during its most recent down run. The S&P 500 index SPX -0.67%  shed 9.14 points, or 0.7%, to 1,354.58, with industrials falling hardest among its 10 sectors. The Nasdaq Composite indexCOMP -0.39%  dropped 11.56 points, or 0.4%, to 2,934.71.


"-July Soybeans finished down 8 at 1430 1/4, 11 1/2 off the high and 17 up from the low.  July Soybean Oil finished down 0.45 at 52.82, 0.73 off the high and 0.02 up from the low. July soybeans closed moderately lower on the session but the market saw a very strong recovery from the early lows. Funds were noted as massive sellers; especially early today. Eurozone debt concerns were a key negative force for the market early today as a sharp break in global equity markets and a surge higher in the US dollar helped spark a continued long liquidation selling trend early today. The selling left July soybeans down as much as 99 1/4 cents in just six trading sessions. Outside markets turned much less negative into the mid-session which helped support the very strong recovery off of the lows into the mid-session with July down just a few cents on the day. Soybean oil was slightly higher on the day into the mid-session but closed sharply lower while meal saw the lows early and closed slightly lower on the session but near the highs of the day. For the report, traders see Argentina production down to near 42 million tonnes from 45 million last month and Brazil production near 64.5 million tonnes from 66 million last month. As a result, world ending stocks for the 2011/12 season are expected to drop to near 53.3 million tonnes from 55.52 million last month. Stocks for the new crop season are expected to recovery to near 59.3 million tonnes. US ending stocks for the 11/12 season are seen near 215 million bushels as compared with 250 million posted in the April update. For 2012/13 season, traders see ending stocks near 165 million bushels but with a range of near 90 to as high as 250 million bushels. For the weekly export sales, traders see soybean sales near 1.32 million tonnes as compared with 1.732 million last week."

FKLI- Recovery In Progress. 

Stock index and index futures finished substantially higher yesterday as regional ended mostly positive with slight recovery except China composite index and Hang Seng index. At closed, the FBM KLCI ended 5.73 points higher to 1,590.60 while May contract rose about 7.50 points to 1,585.50, ending at the day high. On technical perspective, market is poised to recover as the May contract manage to create another higher lows from yesterday recovery. This signifies that there is enough Buyer to revive the positive prospect for market recovery even after the market has gap down on previous Monday. On a Bullish market, accumulation is best conduct when the market start recover from a panic sell-off or negative shock happen due to external factors. For today, tight range trading is expected to be the trading theme as market is likely exhausted from previous two days rallies. Daily pivot support is located around 1,572 while resistance is pegged at 1,582.

Daily Pivot Point
R2= 1587
R1=1582
S1= 1575
S2= 1572

FCPO- Bearish Mode Remain Intact. 

CPO futures denied Buyers effort for further price recovery in the late afternoon when prices chose to end the day lower. The benchmark July finished RM9 lower to 3,351, exactly at the day low yesterday. With less supporting hint for the market to recover at the moment, Soya oil rose about 0.29 cents to 53.87 cents per pound during Asia trading session, 6.30pm +8GMT. In a nutshell, market is still susceptible for further correction as there is no promising sign for market recovery yet. Market is forming more signs of weakness judging from lower highs formation shown on hourly chart above. Current Bearish outlook in palm oil futures appear generic that it look very much similar in most down trend market. This can be identify from a heavy sell-off follow by a congested market, break down from that congested market soon after that and then another sell-off took place again. In other words, those are technical price pull back or Short covering (taking profit) when the market attempt to recover in a down trending period. For today, support is located around 3,283 while resistance is pegged at 3,359.

Daily Pivot Point
R2= 3384
R1=3359
S1= 3321
S2= 3283
 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.