Ready For Softness?
The Malaysian stock market on Monday saw an end to the modest two-day winning streak in which it had added just 3 points or 0.2 percent. The Kuala Lumpur Composite Index finished just above the 1,550-point plateau, and now traders are bracing for continued softness when the market kicks off trade on Monday.
The global forecast for the Asian markets remains broadly negative as markets continue to fret over the weak U.S. jobs data plus a fall in commodity prices. Oil and gold stocks figure to fall under pressure, along with properties and financials. The European and U.S. markets finished sharply lower, and the Asian bourses figure to follow suit - especially the ones that were off on Monday.
The KLCI finished modestly lower on Monday following losses from the plantation stocks and financial shares.
For the day, the index shed 7.71 points or 0.49 percent to end at 1,552.14 after trading between 1,551.85 and 1,556.67. Volume was 635.33 million shares worth 972.52 million ringgit. There were 454 decliners and 261 gainers, with 316 stocks finishing unchanged.
The lead from Wall Street suggests continued consolidation as stocks saw further downside on Monday after seeing significant weakness last week. Concerns about the outlook for the economy continued to weigh on the markets following last Friday's disappointing employment data.
WALL STREET >>> Broad Market Tailspin
DJIA, SPX Surrender Round-Number SupportThe Dow Jones Industrial Average (DJIA – 12,089.96) extended its pullback as the session progressed, ending with a loss of 61.3 points, or 0.5%, to settle south of 12,100 for the first time since March 23. Financial stocks Bank of America (BAC) and JPMorgan Chase (JPM) paced the 23 decliners with losses of 4% and 2.5%, respectively, while United Technologies (UTX) led the bullish minority by tacking on nearly 0.6%.
The S&P 500 Index (SPX – 1,286.17) also didn't stop the proverbial bleeding until the closing bell, giving up almost 14 points, or 1.1%. Like the Dow, the SPX gave up its perch atop the 1,300 level -- a first since March 23. Finally, the Nasdaq Composite (COMP – 2,702.56) ended with a deficit of 30.2 points, or 1.1%, but found a late-session foothold atop the round-number 2,700 level, which hasn't been compromised on a daily closing basis in more than two months.
TECHNICAL ANALYSIS
Dow Jones Industrial Average
The Dow closed lower on Monday as it extends the decline off May's high. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near-term. If the Dow extends the decline off May's high, the 62% retracement level of the March-May rally crossing at 12,059 is the next downside target.
Closes above the 20-day moving average crossing at 12,470 are needed to confirm that a low has been posted. First resistance is the 10-day moving average crossing at 12,333. Second resistance is the 20-day moving average crossing at 12,470. First support is today's low crossing at 12,092. Second support is the 62% retracement level of the March-May rally crossing at 12,059.
Crude Oil Retreats With Stocks
Crude oil futures retreated along with stocks today, thanks to expectations for an output boost from the Organization of Petroleum Exporting Countries (OPEC), which will meet in Vienna later this week. In addition, escalating geopolitical tensions in both Yemen and Syria also contributed to crude's deficit. Against this backdrop, July-dated crude oil futures gave up $1.21, or 1.3%, to end at $99.01 per barrel -- black gold's first finish south of the century mark since May 24.
DJIA, SPX Surrender Round-Number SupportThe Dow Jones Industrial Average (DJIA – 12,089.96) extended its pullback as the session progressed, ending with a loss of 61.3 points, or 0.5%, to settle south of 12,100 for the first time since March 23. Financial stocks Bank of America (BAC) and JPMorgan Chase (JPM) paced the 23 decliners with losses of 4% and 2.5%, respectively, while United Technologies (UTX) led the bullish minority by tacking on nearly 0.6%.
The S&P 500 Index (SPX – 1,286.17) also didn't stop the proverbial bleeding until the closing bell, giving up almost 14 points, or 1.1%. Like the Dow, the SPX gave up its perch atop the 1,300 level -- a first since March 23. Finally, the Nasdaq Composite (COMP – 2,702.56) ended with a deficit of 30.2 points, or 1.1%, but found a late-session foothold atop the round-number 2,700 level, which hasn't been compromised on a daily closing basis in more than two months.
Dow Jones Industrial Average
The Dow closed lower on Monday as it extends the decline off May's high. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near-term. If the Dow extends the decline off May's high, the 62% retracement level of the March-May rally crossing at 12,059 is the next downside target.
Closes above the 20-day moving average crossing at 12,470 are needed to confirm that a low has been posted. First resistance is the 10-day moving average crossing at 12,333. Second resistance is the 20-day moving average crossing at 12,470. First support is today's low crossing at 12,092. Second support is the 62% retracement level of the March-May rally crossing at 12,059.
Crude oil futures retreated along with stocks today, thanks to expectations for an output boost from the Organization of Petroleum Exporting Countries (OPEC), which will meet in Vienna later this week. In addition, escalating geopolitical tensions in both Yemen and Syria also contributed to crude's deficit. Against this backdrop, July-dated crude oil futures gave up $1.21, or 1.3%, to end at $99.01 per barrel -- black gold's first finish south of the century mark since May 24.
HAPPY INVESTING & GOODLUCK2ALL
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