Market Overview 3rd July 2012

Monday, 3rd July 2012. The FBM KLCI only manage to closed slightly higher yesterday despite better than expected surge occur on U.S equity market previous  Friday. Other news to follow. 


"-The Dow industrials saw a slight decline Monday after data showed that American manufacturing activity dropped into contraction territory in June for the first time in three years, but the Nasdaq Composite and S&P 500 index finished modestly higher. The Dow Jones Industrial AverageDJIA -0.07%  fell 8.7 points, or 0.1%, to close at 12,871.39. That’s hardly a dent to Friday’s nearly 278-point rally in the wake of an agreement by European Union leaders on fresh measures to tackle the euro-zone debt crisis. The S&P 500 Index SPX +0.25%  ended 3.4 points, or 0.25%, higher at 1,365.51, with telecom stocks leading the advance among the benchmark’s 10 component sectors. The Nasdaq Composite Index COMP +0.55%  closed up 16.2 points, or 0.6%, at 2,951.23, after a low of 2,925.71.

"- Most Asian markets eked out small gains Monday to start a new quarter on a mildly positive note, with downbeat Chinese manufacturing data tempering lingering optimism over last week’s agreement in Europe to stem the region’s debt crisis. Australia’s S&P/ASX 200 index AU:XJO +0.94%  helped lead regional gains with a 0.9% advance and Taiwan’s Taiex gained 0.7%, while China’s Shanghai Composite IndexCN:000001 +0.03%  ended marginally higher. Japan’s Nikkei Stock Average JP:100000018 -0.04%  gave up early gains to post a fractional decline, while South Korea’s Kospi KR:SEU -0.13% shed 0.1%. Hong Kong’s share market was closed for a holiday on Monday."

"-August Soybeans finished up 12 1/2 at 1494 1/4, 15 1/2 off the high and 9 1/4 up from the low. November Soybeans closed up 10 1/4 at 1438. This was 7 1/2 up from the low and 17 3/4 off the high. August Soymeal closed up 7 at 436.5. This was 4.0 up from the low and 4.3 off the high. August Soybean Oil finished down 0.03 at 52.36, 0.74 off the high and 0.43 up from the low. November soybeans traded 10 cents higher into the close but well off the session high of 14.55 3/4. August soybean oil traded 9 cents higher while soybean meal rallied $5 on the day. The 5-day outlook for very hot and dry weather for the Midwest and northern Delta region helped to support the market to new contracts high. Soybean traders took profits midday after updated weather maps showed a better chance for rainfall in the eastern Soybean Belt over the next 10 days. The 11 to 15 day map looks wetter for the Central and South Western Midwest, although confidence is low in this forecast. High humidity and warm temperatures will increase the chance for pop-up thunderstorms around the soybean Belt. Northern Indiana, Wisconsin, and Ohio could benefit from this chance of rainfall. The USDA announced a sale of 1.9 million tonnes of US soybeans to unknown destination. Traders believe this will be China and it is the fifth largest one-day sale on record. Export inspections came in at 13.89 million bushels which was up from 9.182 million last week and up from 12.8 million necessary each week to reach the USDA projection for the year. Outside markets were slightly negative with the U.S. Dollar trading slight higher and energies weaker on the day. Soybeans shook off the negative tilt as traders anticipate a sharp drop in crops rated good to excellent of 3-4% in tonight's weekly update."

FKLI- Market Went Back To Silent Mode

Stock index and index futures ended mixed yesterday despite some good overnight performance from U.S equities market on previous Friday. Investors might not so excited about the recent European summit decision to strengthen their banking sectors aimed to tackle debt default. This incident may indicate that, the market is not looking for some positive correlation on some other indices to breached its all time high. What matter more is how Bullish was the local blue chips stocks could be for the upcoming pre-election that might happen this or next early year. If that is a vague caused for the market to go up, how about Ramadhan festive season that is drawing near. Technically, the market is still doubt on which direction to head to judging on short term perspective. But if you look closely, there is another higher lows and higher high made on the hourly chart, signifying improved positive price action throughout yesterday trading session. Meanwhile on medium term, market is still hovering on Bullish momentum with some mild retracement expected along the way. For today, support is located around 1,596 while resistance is pegged at 1,609.

Daily Pivot Point
R2= 1615
R1= 1609
S1= 1600
S2= 1596

FCPO- Weekly Resistance Breached

CPO futures gap up and continue to rally yesterday amid recent positive price outlook for commodities market. Soy oil is reaping most of the positive effect from recent rallies on U.S equities market after the European leader came up some counter measures to avoid debt default. As a result, the benchmark Sept rose franticly about RM68 or 2.25% to 3,088 level, breaching at least fours weeks high. The most active traded Soy oil was traded 0.25 cents higher to 52.64 cent per pound during Asia time yesterday, 6.10pm +8GMT. Cargo surveyors such as SGS and ITS reported palm oil export grow about 9%~5% to 1.46~1.45 mln tons on June vs May 2012. Overall outlook for demand is about to improve further judging on the upcoming Muslim festive season. Technically, market is likely continue to recover / rallies based on yesterday price action. The evidence from massive Buying force yesterday that breached above previous weekly resistance level was a strong commitment by Bulls to indicate a genuine upside break out. Bear in mind that although this is a strong upside break out, market is still susceptible for some intraday mild correction before resuming its positive momentum. For today, support is located around 3,059 while resistance is pegged at 3,118.


Daily Pivot Point
R2= 3118
R1= 3103
S1= 3059
S2= 3030


 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.