Triangle On The High Ground 18th Dec 2012

Tuesday, 18th Dec 2012. Stock index retrace yesterday as investors brace up for growing financial uncertainties on European countries and fiscal cliff fear on U.S. Other news to follow.

"- U.S. stocks finished higher on Monday, with financials leading the advance, buoyed by reports of progress in Washington toward reaching a deal to avoid the fiscal cliff of tax and spending measures that could tip the economy back into recession. The Dow Jones Industrial AverageDJIA +0.76%  climbed 100.38 points, or 0.8%, to close at 13,235.39, with the benchmark index scoring its first gain in four sessions. The S&P 500 index SPX +1.19%  added 16.78 points, or 1.2%, to end at 1,430.36, with financials the best performing of its 10 major industry groups. The consumer staples sector was the leading laggard. The Nasdaq Composite Index COMP +1.32%  advanced 39.27 points, or 1.3%, to 3,010.60, finishing near the session’s high of 3,011.22."

"-Japanese and mainland Chinese stocks defied a broad weakness in Asia Monday, with equities in Tokyo rising after weekend election results sparked optimism for new policies to combat deflation, while hopes for policy reforms lured buyers in Shanghai. Stock markets in Hong Kong and Australia were among those that declined in the rest of Asia, as investors looked to a weak lead from Wall Street Friday amidst uncertainty related to the U.S. fiscal cliff. Japan’s Nikkei Stock Average JP:100000018 +0.94%  jumped 0.9%, reaching its best level since early April, while the Shanghai Composite CN:000001 +0.45%  added 0.5%, narrowing the benchmark’s year-to-date losses to less than 2%. Hong Kong’s Hang Seng IndexHK:HSI -0.41%  dipped 0.4%, South Korea’s Kospi KR:SEU -0.60%  lost 0.6%, Australia’s S&P/ASX 200 indexAU:XJO -0.21%  slipped 0.2% and Taiwan’s Taiex XX:Y9999 -0.88% fell 0.9%."

"-January Soybeans finished up 1/4 at 1496 1/4, 12 1/2 off the high and 3 3/4 up from the low. March Soybeans closed down 3 1/4 at 1488 1/4. This was 3 3/4 up from the low and 13 off the high.

January Soymeal closed down 2.3 at 455.4. This was 1.4 up from the low and 6.6 off the high. January Soybean Oil finished down 0.2 at 49.79, 0.56 off the high and 0.31 up from the low. January soybeans ended the day nearly unchanged after moving above $15.00 overnight but failed to settle above the closely watched level. Weaker action in the corn and wheat markets kept gains limited on the day but strong end user demand continues to support spreads and cash basis levels. CIF basis in the Gulf of Mexico was steady on the day but holding at historically high levels as world buyers continue to look to the US for soybeans and products. Inspections for the week ending December 13th were pegged at 36.9 million bushels which was slightly below market estimates and against 46.6 million bushels last week. Only 17.6 million bushels are needed each week to reach this crop years USDA estimate, down from 18.1 last week. The cumulative inspection pace is 51% of the USDA estimate vs. the 5 year average of 39%. Additional support stems from a staggering domestic crush rate. September through November crush is estimated at 430.58 million bushels, up 9.6% from the same period last year. The USDA is currently projecting this crop year's crush demand at 1.57 billion bushels, down 7.8% from last year. The strong pace of crush vs. the USDA estimate is supportive to the price outlook short term."

FKLI- Lower High Form On Intraday 

Stock index retrace for another session yesterday as investors are likely pocketing their gains from previous week recovery. It is better to be safe in this highly evolve market by taking what is left on the "table" while you still can. What I am referring to will be keeping your trading horizon in futures market to be short to medium term as there is barely any trend you can trade right at this moment. Market has gone through a vicious Sell-off from the peak around 1,677 level on early November 2012 but the upside did not last long and market dive down to 1,590 level after that. Now, it has recovered more than 50% of the Fibonacci retracement ratios which also could mean a prolong recovery in long term. Technically, the next clue for market direction would be breaking either one end of the trading range shown on hourly chart above. Judging from the lower high formed on the chart, it is more likely that the Dec contract is likely heading down and breach below the lower trading range, which is located around 1,643~1,640. For conservative Short set up, traders might want to wait for the Dec contract to breach that lower trading range or immediate support before placing a Sell order to Short it. For more automation order, traders could place a Sell stop order at 1,642~1,640 instead so that the price will auto fill within these price range. For today, pivot support for Dec contract is located around 1,641 while resistance is pegged at 1,654.

Daily Pivot Point
R2= 1654
R1= 1650
S1= 1644
S2= 1641
 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.