Market Overview 3rd Sept 2012

Monday, 3rd Sept 2012. The SBM KLCI ended unchanged on previous Thursday prior to Malaysia independence public holiday while other major Asia benchmark were traded mostly lower. Other news to follow. Other news to follow.

"-U.S. stocks on Friday notched a third month of gains that have largely priced in another round of easing by the Federal Reserve and policy action in Europe to address its debt crisis. After an 151-point rise, the Dow Jones Industrial AverageDJIA +0.69% ended up 90.13 points, or 0.7%, to 13,090.84, down 0.5% for the week and up 0.6% for August.

Off 0.3% for the week and up 2% for the month, the S&P 500 index SPX +0.51%  added 7.10 points, or 0.3%, to 1,406.58, with materials and energy pacing the gains and utilities the laggard among its 10 sectors. The Nasdaq Composite COMP +0.60%  gained 18.25 points, or 0.6%, to 3,066.96, off 0.1% for the week and up 4.3% for the month."

"- Asian markets closed out the last trading day of August on a downbeat note, with Japanese stocks falling sharply after weak industrial data, while Chinese stocks also drifted lower, with investors cautious ahead of a speech by Federal Reserve Chairman Ben Bernanke. Japan’s Nikkei Stock Average JP:100000018 -1.60%  dropped 1.6%, South Korea’s KospiKR:SEU -0.07%  slipped 0.1% and Australia’s S&P/ASX 200 index AU:XJO +0.0093% ended little changed. Hong Kong’s Hang Seng Index HK:HSI -0.36%  lost 0.4% and the Shanghai Composite Index CN:000001 -0.25% CN:000001 -0.25% traded down 0.3% as it continued to hover around three-and-a-half-year lows."

"- Crude-oil futures rallied Friday, breaking a two-day losing streak as the dollar fell and a speech by U.S. Federal Reserve Chairman Ben Bernanke was greeted with mild enthusiasm. Crude oil for October delivery CLV2 +2.05%  added $1.85, or 2%, to $96.47 a barrel on the New York Mercantile Exchange."

"-November Soybeans finished down 7 at 1756 1/2, 6 3/4 off the high and 11 up from the low. January Soybeans closed down 6 1/2 at 1751. This was 12 up from the low and 6 off the high. December Soymeal closed down 1.9 at 533.4. This was 3.5 up from the low and 2.7 off the high. December Soybean Oil finished down 0.17 at 57.08, 0.46 off the high and 0.32 up from the low. November soybeans traded slightly lower into the close after posting a new all-time high yesterday. Soybean meal and oil traded weaker as well. July soybeans, however, closed higher and managed to push to a new contract high. A weaker domestic soybean and meal basis plus calendar spread weakness, offered a negative tone to the trade. Soybean basis in processor markets in Iowa tumbled 20 cents today which added to the downside pressure. The sharp move lower in corn and wheat has forced traders to take profits ahead of the holiday weekend. Traders remain concerned that the recent heat in the western Corn Belt may have negatively impacted soybean conditions and yield potential. This was offset by thoughts that soybean yields in the east could be better than expected due to the rainfall earlier this month. Traders believe soybeans could see long term support as export sales data continues to suggest that demand rationing may not be taking place at current prices levels. The US Dollar traded sharply lower and offered slight support to the soybean market."

FKLI- Sideways At The Top Or Topping Out ? 

Stock index ended slightly higher to 1,646.11 while the new spot month Sept contract went down about one point to settle lower at 1,645. Market was not moving radically from the past week as it is hovering around 1,655~1,640 area throughout the week. With slowing down growth on China, Japan and Korea, investors are waiting for more positive hint before jumping in again. But the plus point will be the impending monetary measure that will be carry out by U.S on another round of quantitative easing to boost their economy. Technically, the stock index is still hovering on positive momentum as it manage to bounced above the immediate support level shown on the daily chart last Thursday. In other words the index did not dip down below the previous week low around 1,640 area, making it still look like the Bulls were still in control. Unfortunately, this immediate support level is unlikely to hold if there is any negative external news to the market that would make the index fall for correction. For today,pivot support level for spot month is located around 1,640 while resistance is pegged at 1,651 level.

Daily Pivot Point
R2= 1651
R1= 1648
S1= 1640
S2= 1636

FCPO- Likely Recover From Previous Technical Selling

Palm oil futures manage to recover on previous Thursday after it went down for correction last week. Some traders sees it as a Merdeka rally before the market close on previous Friday for Malaysia Independence day holiday. On closing bell, the benchmark Nov manage to recover about RM19 to settle higher at 3,019 amid positive price outlook from Soy oil during previous Thursday Asia trading session. Volume for the benchmark Nov also traded lower about 2,577 lots. Fundamentally, the prospect for further palm oil futures recovery is likely judging on the 18% increased in palm oil export figures for Aug vs July 2012 reported by ITS. But that alone would not stop palm oil futures to open lower today based on previous weaker closing price on Soy oil last Friday. On technical perspective, the positive outlook on benchmark Nov is likely to remain judging on the higher low formation formed on hourly chart shown above. The higher low mentioned just now was formed when the market has corrected and filled the previous week gap and rebounded off from that low. As the time of writing, we can roughly identified the immediate support based on the previous low area located around 2,980 level. Long holders are cautioned that further correction is likely if the benchmark Nov manage to breach below this immediate support level.

Daily Pivot Point
R2= 3050
R1= 3034
S1= 3001
S2= 2984
 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.