Market Overview 19th July 2012

Thursday, 19th July 2012. The FBM KLCI maintain its course on heading north consecutively yesterday with strong accumulation on broad blue chips stocks. Other news to follow.


"- U.S. stocks gained for a second day Wednesday, turbocharged by a rally in tech stocks and Federal Reserve Chairman Ben Bernanke’s comments, and undeterred by a slightly weaker Beige Book. The Dow Jones Industrial AverageDJIA +0.81% closed up 103.16 points, or 0.8%, to 12,908.70. The index touched an intraday high of 12,921.94 earlier in the session. Freeman has an end-of-year target for the S&P 500 index SPX +0.67% of 1,400 to 1,450.

The S&P 500 gained 9.11 points, or 0.7%, to close at 1,372.78, led by a 1.9% rally in tech shares. The index earlier touched an intraday high of 1,375.26. Financials and consumer staples were the only two of 10 sectors lower. The tech-heavy Nasdaq Composite COMP +1.12%  also rose, rallying 32.56 points, or 1.1%, to close at 2,942.60, standing near its intraday high of 2,951.30."

"- Most Asian stock markets declined on Wednesday, with miners giving up ground across the region as investors switched from hopes for monetary stimulus to worries about growth.

Japan’s Nikkei Stock Average JP:100000018 -0.32%  turned back from early gains to end down 0.3%, South Korea’s Kospi KR:SEU -1.48% KR:SEU -1.48% lost 1.5%, and Australia’s S&P/ASX 200 index AU:XJO -0.42%  gave up 0.4%. Hong Kong’s Hang Seng Index HK:HSI -1.11%   and Taiwan’s Taiex each slid 1.1%. China’s Shanghai Composite Index CN:000001 +0.37% ended 0.4% higher on the back of late buying, aided by expectations for policy easing."


"-August Soybeans finished up 44 1/2 at 1683 1/2, 2 off the high and 57 1/2 up from the low. November Soybeans closed up 29 1/2 at 1620. This was 44 up from the low and 2 off the high. August Soymeal closed up 20 at 514.0. This was 22.4 up from the low and equal to the high. August Soybean Oil finished down 0.13 at 54.01, 0.33 off the high and 0.71 up from the low. August and November soybeans traded sharply higher into the close. August soybean meal traded $20 higher while August soybean oil lost 30 cents. The weather outlook for most of the Midwest looks detrimental to US soybean yields the next two weeks. The southeast and delta could see showers this week and restricted rainfall may fall in parts of Northern Illinois and Indiana by this weekend. Rainfall amounts are expected to be light but will benefit soybean crops. Temperatures are expected to reach 95-105 degrees in Kansas, Missouri, South Dakota, Iowa, and Nebraska this week; increasing stress on row crops. Cash soybean markets were firm today, causing the August soybean contract to gain on forward months. The trade is expecting soybean yields to fall near 40 bushels/acre with some estimates near 37 bushels/acre. The sharply higher trade in soybeans reflects the fear of extremely tight soybean supplies mixed with increased demand over the next couple months."

FKLI- No Sign Of Stopping, Yet. 

There is no telling where should this particular rally end and it is no point to figure that out before it happen either. Almost all successful traders are being re-active to the market, they would not move an inch before the market tell them to. A crude example, trend followers only exit their Long positions in a uptrend market only if the market fulfil the criteria of a Bearish market or when an uptrend reverse its role to downtrend or sometime when the market hits their profit target. At yesterday, the FBM KLCI went up about 5.85 points to 1,645 level while July contract rose about 3 points to 1,645.50, it rose to all time high at 1,647. With no sign of retracement yet, Long holders are advise to hold their position until there is some Bearish price action formed at least on hourly chart. Bearish candle formation can be seen as a lower high and lower low swing from previous high. Price formations are better indicator to represent current market sentiment because it took the aspect of price itself and not the computation of formula formed from any indicators. For today, pivot support is located around 1,640 while resistance is pegged at 1,652.

Daily Pivot Point
R2= 1652
R1= 1648
S1= 1640
S2= 1635

FCPO- Sell-off Likely On Weak Palm Oil Demand And Sudden Correction Of Soya Oil. 

CPO futures fell for the second day amid less follow thru Buying activities on edible oil futures. Both palm oil and Soya oil futures came under siege by Bears when the market suddenly losses its Bullish momentum after it gap up on previous Monday this week. Market quickly reverse its role from Bullish to Bearish when most of the daily pivot support are breached. On yesterday close, the benchmark Oct dipped 2.22% or RM68 for the second session straight, settle lower at 2,994 level which happen to be just 4 point above day low. Previous gained that made the benchmark Oct gapped up to 3,161 level was all wipe out yesterday. There are a few connection that resulted such Bearish market, one of them was the weak export figures and another one was due to sudden correction on Soya oil price. Technically, the correction came rather quick and swift as there was less technical rebound along the way. Further correction is expected to materialize today judging as market was able to breached below the support trend line highlighted on hourly chart above. It seems that price formation for medium term has formed a lower high on hourly chart shown above. For today, support is likely located around 2,967 while resistance is pegged around 3,044.

Daily Pivot Point
R2= 3094
R1= 3044
S1= 2967
S2= 2940
 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.