WALL STREET >>> DJIA Backpedals 107 Points; Gold Soars To Record High

Europe Squashes Dow Four-Day Streak

Stocks kicked off the holiday-shortened week on a sour note today, thanks to fresh financial concerns from across the pond. According to the Wall Street Journal, European banks may harbor more risky debt than the recent round of stress tests revealed, reviving fears about the true fiscal health of the euro zone. As a result of the uncertainty, investors shunned stocks in favor of "safe-haven assets" like Treasury notes and gold, with the widespread worry translating into a record high for the malleable metal. Against this backdrop, the major market indexes snapped their four-session winning streak, with the Dow Jones Industrial Average (DJIA) giving up triple digits by the close.

"Everyone returned from the three-day weekend and decided to hit the 'sell' button, I guess," opined a senior technical researcher.

From a broader standpoint, he thinks the S&P 500 Index (SPX) will eventually break north of its current range between 1,040 and 1,130, but says the big question will be the catalysts.

"I think it'll be two things: better-than-expected third-quarter earnings, and the excitement – whether you like it or not – of gridlock coming to Washington this November in the form of the Republicans in power in the House," he explained.

The Dow Jones Industrial Average (DJIA – 10,340.69) settled near its session lows today, giving up 107.2 points, or 1%, by the close. Only four of the Dow's 30 blue chips bucked the trend – General Electric, Coca Cola Co., McDonald's Corp., and Verizon Communications – with American Express and Walt Disney pacing the 26 decliners.

The S&P 500 Index (SPX – 1,091.84) swallowed a loss of 12.7 points, or 1.2%, today, surrendering its short-lived perch atop the 1,100 level. In the same vein, the Nasdaq Composite (COMP – 2,208.89) backpedaled 24.9 points, or 1.1%, to finish near its own session nadir.

Crude futures finished the session south of breakeven today, as revived concerns about Europe's fiscal health sparked fears of waning demand. Furthermore, the euro-zone jitters bolstered the greenback against its European rival, making it more expensive for holders of foreign currency to buy the dollar-denominated commodity. By the close, crude oil for October delivery shed 51 cents, or 0.7%, to end at $74.09 per barrel.
Meanwhile, renewed fears about European balance sheets proved to be a boon for gold futures today. The precious metal's status as a safe-haven investment lured a plethora of nervous traders, sending December-dated gold futures $8.20, or 0.7%, higher to end at $1,259.30 an ounce – a new record peak.

HAPPY TRADING

BMD Crude Palm Oil Futures >>> CPO Market Overviews

Palm Oil Ends Mostly Higher; e-CBOT Supports

Crude palm oil futures on Malaysia’s derivatives exchange ended mostly higher Tuesday on mild buying interest, with support from e-CBOT and some cues from crude oil, said trade participants.

The benchmark November contract on the Bursa Malaysia Derivatives ended MYR8 higher at MYR2,628 a metric ton after hitting an intraday high of MYR2,636.

BMD Crude Palm Oil (CPO) prices are likely to remain steady around current levels during the week due to a lack of fresh fundamental leads, tepid trade in other commodities and upcoming holidays, said an executive at a Singapore-based commodities brokerage. Traders also want to look at soyoil price trends on CBOT tonight before making investment decisions, he added.

Most traders put immediate resistance at MYR2,630/ton.
Traders expect prices to mostly move within the current range of MYR2,600- MYR2,630/ton until next week, due to thin trade participation.

In the cash market, palm olein for delivery in October traded at $915/ton and for November and December at $872.5/ton, free on board Malaysian ports. Cargoes for April/May/June changed hands at $865-$870/ton, FOB, said a Singapore-based exporter.

Open interest on the BMD was 65,404 lots, versus 67,081 lots Monday. One lot is equivalent to 25 tons.

A total of 18,489 lots of CPO were traded versus 14,090 lots Monday.

HAPPY TRADING

TECHNICAL ANALYSIS >>> FBMKLCI 06/09/2010 / 综合指数 2010年 09月 06日

FBM KLCI 06/09/2010

As indicated by A, the FBM KLCI is still resisted by the 1436 level. However, regional markets were gaining thus the KLCI loss on Monday was minimal. Resistance for the KLCI is at 1436 while the support is at 1400.

As shown on the chart above, the Bollinger Bands contracted 2%, suggesting that the KLCI might be consolidating, and the direction of the KLCI is expected to be unclear until the re-expansion of the Bollinger Bands. Nevertheless, with the KLCI above the Bollinger Middle Band, the technical outlook is still positive.

As indicated by B, total market volume fell 19.3%, with volume breaking below the 40-day VMA level. Overall, market is lightly participated, as investors are staying on the sidelines while waiting for some fresh leads. Generally, it is rather normal to have lower volume as the market consolidate.

As indicated by C, the Stochastic is gradually falling but still above 70%, thus the short term bullish signal is still intact. If the Stochastic should break below 70%, it would be a signal suggesting a beginning of a technical correction.

In conclusion, although the KLCI is temporary resisted by 1436, immediate technical outlook for the KLCI is still positive, as it is still above the Bollinger Middle Band, as well as supported by the 14, 21, 31 EMA.

综合指数 2010年 09月 06日

如图中箭头A所示，富时综合指再度在1436点的阻力水平遇阻，惟区域股市纷纷上扬使到综指并未出现下跌的趋势。无论如何，1436点继续的成为综指当前的阻力水平，支持水平则是1400点的心理支持水平。

如图所示，布林频带（Bollinger Bands）收窄2%，这显示综指亦在抗拒出现下滑的趋势，所以综指暂时出现横摆的僵局，直到布林频带再度打开为止。无论如何，由于综指目前仍然处于布林中频带（Bollinger Middle Band）以上，所以综指基本上仍然属于上扬的趋势中。

如图中箭头B所示，马股的成交量在综指出现横摆时减少19.3%，这使到成交量跌破了40天成交量移动平均线（VMA）的水平，这显示投资者开始谨慎，所以减少进场的数量，这出现在综指横摆巩固时是正常的。

如图中箭头C所示，随机指标（Stochastic）开始缓缓下滑，这显示综指的短期走势有开始转弱的可能，不过由于随机指标始终处于70%以上，所以目前还是没有确认此短期转弱趋势的讯号。以技术而言，综指还是能保持在一个短期上扬的格局，直到随机指标跌破70%为止。

总的来说，综指虽然在1436点遇阻，不过综指仍然受到外围因素的影响，投资者还是举棋不定，所以出现了横摆的格局。一般上，只要综指仍然在布林中频带及14、21、31天的加权移动平均线（EMA）上获得扶持，综指的走势基本上仍然偏向于上扬的。

HAPPY TRADING

FBM KLCI Futures >>> 5 min and Weekly Charts Technical Outlook

FKLI Spot contract shows signs of profit takings ahead;
Weekly chart still optimistic
Last week's trading activities were dominated by bullish traders leading to further extension from the previous week's close as buyers completely shadowed the shortists. However, having drawn near to the longer term resistance at 1,450, the spot contract is now showing some signs of fatigue. With angled down oscillators by last Friday things could be different this week.

The September contract on the Bursa Malaysia Derivatives Bhd. closed at 1,432.50 last Friday with an open interest of 18,743 contracts.

Moving into this week the market may likely to take the lead from the retreating technical signals.

The daily RSI indicator looks set to join the CCI at the neutral region as the momentum may continue to weaken from the overbought territory. As firm support can be located below the 1,430 level, this may lead to further erosion of buying interest over the immediate term. A glance at the daily chart will show that the spot contract is only beginning to correct.

The weekly oscillators, however, are on a different path, beginning to climb up to the overbought region. The divergence in pace may likely lead to a case of short-term weakness and longer term gains. As the futures seem to be affirming a longer term uptrend, it may need to grapple with some corrections this week.

The daily momentum is already beginning to see a pullback from the high of 1,444 last Thursday.

Tactically, the technical indicators are non unanimous in its direction. The retreat from the overbought territories signals inherent weakness in the futures market over the immediate term, while its longer term prospect remains positive as the weekly trend remains north- bound. Support may be located at the 1,420 level which may open appetite to more structural bullish traders.

Technical Reports

The Moving Average Convergence Divergence (MACD) remains positive with the faster above the signal line. Both lines remain at the positive region.

The daily Relative Strength Index (RSI) closed at the overbought. The daily Commodity Channel Index finished at the neutral territory.

The S&P 500 and NASDAQ Charts Technical Outlooks

Please click on images to ENLARGE

DISCLOSURE : The above charts are the prognosis & opinion of the author only.
It is not a solicitation to buy or sell.
Please view with discreetions
TQVM