Market Overview 6th Aug 2012

Monday, 6th Aug. Stock index closed unchanged on previous Friday as most investors awaits for further economy data from U.S market. Other news to follow.

"-Investors will come into next week with some wind at their backs following upbeat July jobs data and renewed hopes about efforts to aid Europe’s debt-troubled nations. On Friday, the U.S. Labor Department said the economy created 163,000 non-farm jobs in July, which exceeded expectations. The nation’s unemployment rate edged up to 8.3%.  Those jobs numbers were one of the main reasons for Friday’s strong market performance. The Dow Jones Industrial Average DJIA +1.69%  rose 217 points, or 1.7%, to 13,096, while the Nasdaq Composite Index COMP +2.00%  closed with a gain of 58 points, or 2%, to 2,968 and the S&P 500 Index SPX +1.90%  rose almost 26 points, or nearly 2%, to 1,391."


"-Most Asian markets tumbled Friday, joining a global chorus disappointed with the European Central Bank’s inaction, while weak earnings from Sharp Corp. and Sony Corp. rattled investors in Tokyo. Japan’s Nikkei Stock Average JP:100000018 -1.13% , South Korea’s Kospi KR:SEU -1.11% and Australia’s S&P/ASX 200 Index AU:XJO -1.12%  each lost 1.1%. Hong Kong’s Hang Seng Index HK:HSI -0.12%  slipped 0.1% and Taiwan’s TaiexXX:Y9999 -0.69% shed 0.7%. The Shanghai Composite IndexCN:000001 +1.02% ended 1% higher, as a reduction in stock trading fees and the central bank’s comment that it will make stabilizing economic growth a bigger priority fueled hopes more stimulus was on the way."

"-Crude-oil futures rallied nearly 5% Friday, spurred by optimism following a positive U.S. jobs report and as Wall Street traded sharply higher and the dollar lost some ground. Crude for September deliveryCLU2 +4.89% rose $4.27, or 4.9%, to settle at $91.40 a barrel on the New York Mercantile Exchange.

"-August Soybeans finished up 3 1/4 at 1656 1/4, 13 1/4 off the high and 17 up from the low. November Soybeans closed up 12 1/4 at 1628 3/4. This was 26 1/2 up from the low and 9 3/4 off the high. August Soymeal closed up 7.9 at 531.6. This was 12.6 up from the low and 0.9 off the high. August Soybean Oil finished up 0.5 at 52.04, 0.26 off the high and 0.63 up from the low. November Soybeans traded higher on the day but settled just off session highs. Soybean meal and oil also traded higher on the day. Outside markets were supportive today with the US Dollar trading sharply lower and US Stocks moderately higher after a better than expected employment report. Crude Oil was also adding support to the soybean market with gains near $4 on the day after tensions rise in Syria. A closely followed grain analyst estimated 2012/13 average soybean yield near 37.2 bushels/acre which is down from 38.5 bushels/acre. They also projected soybean production at 2.791 billion bushels which is in line with market expectations. The next two weeks remain the most critical period of growth for the soybean crop and weather patterns remain unfavorable. Afternoon weather maps show a slightly better chance for rainfall next week in the eastern Corn Belt and southeastern US. The precipitation should help soybean development and close to an inch is expected for some areas. Other areas of the Midwest, specifically the west central and southwestern Midwest will remain warm and dry adding stress to crops. The higher trade is also linked to short covering by traders as the market prepares for next week's USDA report."

FKLI- Looking Close Inside The Range

Market ended sideways on previous week amid slow progress made over the development on European debt crisis. As a result, the FBM KLCI ended slightly higher about 1.59 points to 1,635.04 level while Aug contract went down about half point to 1,637 on previous Friday. Volume for the spot month was traded typical tone at 3,992 contracts. Things might be a little different for this week equity index outlook as there was some positive data announced on U.S jobs data, saw some increment of jobs recovery. But on the price itself, in order to recover further, the spot month contract need to breach at least above 1,640 level. What we can tell from the chart so far was the higher lows candle formation on the daily chart. But this candle formation alone does not guarantee that the market will breach the immediate resistance around 1,640 level for sure. For this medium term uptrend to continue, the spot month contract to breach the all time high around 1,652 level. Today, pivot points for support is located around 1,632 while resistance is pegged at 1,639~ 1,640.

Daily Pivot Point
R2= 1641
R1= 1639
S1= 1632
S2=1628

FCPO- Trapped Within The Range, Downside Bias

Palm oil futures is still clinching above the 2,900 level (barely) and moving actively within 2,910~2,950 level as traders are still looking for some cues to take action in the market. On previous Friday close, CPO futures for the benchmark Oct went down about RM28 to 2,918 amid weak Soy oil price outlook. The most actively trade Soy oil dipped traded 0.06 cent lower to 51.85 cents per pound during Asia trading hour around 6.13PM, +8GMT. Looking on medium term direction, market is still hovering on sideways amid uncertainties over Euro debt crisis development and U.S economy outlook. Market recovery is capped due to disappointing development over the European debt crisis, most of outcome on ECB meetings remain rhetoric. On technical perspective, the benchmark Oct susceptible for further Sell-off judging from lower high formation on hourly chart above. Market is still weak for further recovery above 2,950 at the moment based on Bearish candle formation so far. For today, pivot support is located around 2,904 while resistance is pegged at 2,941 level.

Daily Pivot Point
R2= 2964
R1= 2941
S1= 2904
S2=2890
 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.