FBMKLCI Futures - Daily Message 2 Feb 2011

FKLI bias stays down and a close below 1513 should keep bias intact. Do note however that buying was seen all day Monday as futures opened low and closed at day high.
Support remains at psychological 1500, which supported price twice in the past week. Further down, important bottom is 1485, the low of December.
Resistance is expected at 1515, which stopped price two times on Monday and then rebound high of 1533. A close above 1515 may turn bias up.
The longer term trend is still up.
Sentiment stayed weak as again futures was priced cheap.
21 day moving average is now 1550

Hang Seng Futures - Another Failed Breakout?

Another failed breakout like it did in October, though the magnitude of selloff is markedly lower. As such, price is still trending lower short term but we believe the longer term trend is still up. Price is still above trendline (chart 2) and weekly moving average still points up (chart 3).

Price may revert to up as: 1) 30 RSI is most oversold since Dec (chart 1); 2) Price is still trading above ‘healthy’ retracement level of 61.8%, or 23200, coincidently the double bottom neck in late Dec (chart 1) 3)Positive sentiment in the past 2 weeks and 4) Reaching support levels in stochastics and the uptrend (chart 2).

If so, price should arrest its fall and an eventual close above moving average (chart 1) should confirm the return of buying strength. Preferably, price closing above 24000 and 30 min RSI goes back above 60.

Otherwise, selling should continue and a close below today’s low and especially below 23200 will keep the short term trend down. Further support is expected at 22800 but expect increased selling pressure on successive close below Dec low of 22300.

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FBMKLCI Futures - Testing Times

Price is on a short term downtrend within the longer term uptrend. The longer term trend is still assumed to be up given that there is yet clear signs that the trend has changed (chart 2 &3). However, question remains if the current move is a start of a primary or just a secondary.

A prudent view in the eyes of Rhea (point 1 & 2) on current short term downtrend is likely be a secondary:

1) Price yet to make a lower low, hence still on uptrend,

 2) Both mid and small caps index too has yet to make a lower low;

3) Cycle study suggest trend is still up and possibly making a bottom soon; and

4) Hammer last Wednesday.

On the other hand, given confusing nature of most correction, there may be shout of a start of primary:

1) The two week downtrend retraced more than 61.8% rally of Dec – Jan rally,

2) Failed breakout of 1530 high; and

3) RSI yet to reach oversold level.

Therefore, should scenario 1 occur, the 1500 should hold, price trades higher this week and eventually trading above 1580; starting a new cycle and nullifying the 2-week long black candles. Otherwise, look for break of 1500 level, possibly 1470 and a weak eventual rebound, below 61.8% retracement level.

The bears may also reason with weak Jakarta, Mexico, India and resistance failure of US on Friday while others may rebutt with still unfalling JPY, AUD and regional currencies.

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FBMKLCI Futures - 31 Jan 2011

The close below 1522 has turned FKLI bias down again and a close below 1516 likely keep bias down.
Support is expected at 1513, which held price last week and the the psychological 1500. Important support level is at 1485, the low of December.
Resistance is not 1533 and close below it may turn bias up. Thereafter 1550 and the gap two weeks back.
Longer Term trend remains up.
Sentiment stayed weak as futures was at discount to cash.
21 day moving average is now at 1551

FBMKLCI Futures - 28 Jan 2011

There is a slight upward bias to FKLI and a close above 1530 should confirm that. However, a close below 1522, Wednesday afternoon's low, may see downward bias returning.
Resistance is still Wednesday's high of 1530, then Monday's low of 1538 and then 1550.
Below 1522, buyers may come in at 1513 and then psychological support and low of week of 1500.
The longer term trend is still up.
Sentiment turned weak again as futures was priced cheap and price has to close higher to keep rebound intact.
21 day moving average is now at 1551.

FBMKLCI Futures - Daily Message 27 Jan 2011

FKLI bias appears neutral though a close below 1523 will keep bias down.
Support is expected at 1513 which supported price in the morning and then psychological 1500 where price bounced of on Wed's open.
Resistance may come at 1530, yesterday's high, and a close above that like change bias up. Further selling may also come at 1537 and 1550.
The longer term trend is still up.
Sentiment however is positive as futures was at premium to cash. Look for sentiment to turn weak should price fail to make higher closes.
21 day moving average is still at 1550.

COMEX Gold - Looking for Intermediate Term Bottom

Price is weak on the short term basis but is still on a long term uptrend. However, intermediate term bottom could be in the making.

On the short term basis, price is still making lower low and is below its 100 period moving average and its downward trendline (chart 1). However, on a longer term basis, uptrend should still be in place as the long term uptrend has yet to be violated (chart 2) while intermediate term low of 1160 still holds (chart 3).

Nonetheless, price could be making an intermediate term bottom as:

1) approaching long term RSI support of 35;

2) price made a measured second move down, second downleg was of same magnitude of the first (chart 1) and

3) sentiment seems to mirror prior intermediate bottoms, open interest waning and commercials are less bearish.

But for such bullish scenario to occur, price has to show strength in the short term by trading above the moving average and the downward trendline, and preferably trading above the support resistance level of 1354. Otherwise, expect downward pressure to continue.

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FBMKLCI Futures - 26 Jan 2011

FKLI bias is still down and a close below 1523 should keep bias intact.
Nonetheless, support is not too far below at 1520, near yesterday's low and also the 61.8% retracement of Dec - Jan rally.
Further support may come at 1510, a prior support level and then psychological 1500.
Resistance is now Monday's low of 1537 and then yesterday's high of 1550.
The longer term trend however, is still up.
Sentiment stayed weak as futures was priced cheap.
21 day moving average is still now 1550.

FBMKLCI Futures - Daily Message 25 Jan 2011

FKLI bias is still down and a close below 1540 likely keep bias intact.
Though a close above Monday's afternoon high of 1543 may turn bias up.
Support is expected around this area and further down, buyers may come in at 1528, the low of January.
Resistance is still 1550, not to far from yesterday's high and thereafter 1562 - 1564, the gap of Friday.
The longer term trend is nontheless up.
Sentiment stays weak as futures was at discount to cash.
21 day moving average is now 1550.

COMEX WTI Crude Futures - Consolidation Continue

Good or bad, not much has changed since the last report two weeks back. On a longer term basis, uptrend looks intact. However, in the shorter term price is moving lower after failing to trade above resistance level of 92 for the second time. The uptrend is based on:

1) Upward trendline and price above moving average (Chart 2 & 3),

2) Break above early year high of 87, and staying above it almost two months now.

On the shorter term, price is correcting again after the third test of 92 resistance level. However, given the longer term bias, the two observations below may well be positive for price going forward: 1) Higher lows in the past 2 months, 87, 87.3 and 88 (chart 1); and 2)RSI level of 88 is the lowest of the three which may indicate price has corrected enough.

But again, similar to the previous report, two different scenarios may pan out: 

1) Price is going through an extended consolidation, making a base before climbing higher. This likely coincide with stochastic bouncing off oversold level, RSI being supported around 40 - 50 level (chart2), breaking of short term downward sloping moving average (chart 1) and eventually closing above 92; or

2) The failed breakout was sign of the start of selling trend, with crude also failing to trade above RM280/barrel convincingly. If so price should trade below 87. Further support may come at 83 and 80.

However, the energy complex is showing some positives that were absent a fortnight ago. Gasoline finally printing 52 week high, confirming higher level of WTI while natural gas has been moving higher during the consolidation period of WTI. Also, energy stocks continue to trade higher, probably forecasting better earnings for the industry. Given the many positives, crude should be trading higher and if it can’t, the opposite move could be strong.

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Crude Palm Oil Futures - New Up-Cycle?

Price may have made a short term bottom while the longer term uptrend is still intact. We note that there is yet a change in the longer term picture, which is up (chart 2 &3). Price likely have made short term bottom as:

1) Daily stochastics was oversold and now back into buying mode (chart 2),

2) 30 min RSI was at its lowest last week, not seen since Nov (chart 1),

3) Price bottom was right at 4 month uptrend since Oct (chart 2),

4) Price corrected about 62% Dec rally,

5) Gap up right after bottoming on Monday (breakaway gap?), and

6) Recent bottom was 37 days after Nov bottom, keeping to the 35 day cycle.

As such, should the new cycle be up, it has to trade above January high of 3905. This should also coincide with beanoil trading closing above 58.5 resistance level and above MYR1.80. Note that while CPO retraced for about 2 weeks, beanoil had a sideway movement. Note too that the grain complex was strong last week, with all corn, wheat, soybean and soybean meal closing at rally high.

Also, the bottom makes 3600 level and important intermediate support level. A good up- cycle has to close above 3600 to keep its upward tendencies going. Otherwise, expect selling to intensify.

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FBMKLCI Futures - Daily Message 24 Jan 2011

FKLI bias is now down and a close below Friday's low of 1543 should keep bias intact.
However, a close above resistance level of 1550, also Friday's afternoon high, could turn bias up.
Further resistance may come at 1555 and around the Friday's morning gap of 1562 - 1564.
Support is still at 1540 and thereafter January low of 1528.
The longer term trend is still up.
Meanwhile, sentiment is weak as futures was priced cheap to cash.
21 day moving average is now at 1549.

FBMKLCI Futures - Daily Message 21 Jan 2011

FKLI bias is down but a close above support resistance level of 1569 may restore upward bias.
Resistance is now the all time high of 1580.
Support is expected at yesterday's low of 1564 and thereafter last week's low of 1555.
Sentiment again stayed neutral as futures was price about fair.
21 day moving average is now at 1548.

FBMKLCI Futures - Daily Message 19 Jan 2011

FKLI bias is neutral after failing to close above 1576 after trading above it for two days running.
Support is still expected at 1569 and close below it may turn bias down. Further support is expected at 1565 area and thereafter last weeks low of 1555.
Sentiment was somewhat positive as futures was price at slight premium to cash. FKLI has to close higher, preferably above 1576 to keep sentiment going.
21 day moving average is now at 1544.

FBMKLCI Futures - Daily Message 18 Jan 2011

FKLI bias stays up and a close above 1576 resistance level should keep bias intact. A good move up should see price closing above last week's high of 1580.
Support is still expected at 1569, important level in the past 2 weeks and then the area of 1566 - 1564. A close below these level may turn bias down.
Sentiment was nuetral as futures was priced about fair.
21 day moving average is now at 1541.

Hang Seng Futures - Need to Trade Above 25000

Hang Seng Future seem to be in a new upleg, while it is consolidating on a very short term basis after rising 900 pts in 3 days early last week. A good upleg should make a new high, trading above Oct high of 25000.

On longer term basis, Hang Seng is still on an uptrend and no clear signal of top occurring just yet (chart 2 & 3) while a new upleg likely started in mid Dec as: 1)price found support on trendline, 2) price is back above its moving average, 3) RSI too found support, and 4) supportive candle formation during that period.

Therefore, the low of around 22500 will be an important support level going forward. An uptrend should see at least at minimum 3 more weeks of higher prices while a price below it may see trend turning weaker.

Meanwhile, in the shorter term, price is in consolidation range of 24200 – 24400 and price may trend on direction of break. Price may break up given current uptrend and positive sentiment, futures was traded at premium to cash all last week but nontheless resistance has to be violated first.

Note too that RSI is correcting fast (chart 1), increasing the probability of false breakout on the downside. Should price break down, a consecutive closes below 24200 likely confirm the break. A minor pullback likely send price to around 2400 – 23850 based on Fibonacci while stronger support is expected at around 23700 – 23500.

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FBMKLCI Futures - Mid Cycle Consolidation?

Price has resumed its uptrend and last week’s sideway move is likely a short term consolidation. Based on current trend, price should break up and even a break down may not be enough to change current picture.

The new all time high printed signals good resumption of trend as: 1) stays above 08 high for 2 weeks now, 2) RSI also moving above consolidation high, and 3) price again hugging the Bollinger band.

We believe price may trade higher following last week’s consolidation given the current uptrend, also higher lows printed every two days, Monday, Wednesday and Friday and daily stochastic is still in buying mode (chart 2). Price touching 1600 is possible given consolidation range of around 20 pts.

However, short term strength may sizzle if price trades and especially a close below 1566. Support likely come at 1555, likely a mid cycle bottom, as it recorded the lowest RSI since late Dec (chart 1). Support area maybe around 1520-1545, the 62% and 38% Fibonacci levels of current rally.

Note too that the 28 day cycle may still be in play and now we are at day 19. Therefore a break up may last for another week while a break below likely see price bottoming in about 10 days from today.

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FBMKLCI Futures - Daily Message 17 Jan 2011

FKLI bias is still up and a close above 1573 should keep bias intact.
Support is around 1566 - 1564, where price found support several times in the past week. But a close below 1566 may turn bias down.
Further supports possibly at 1560 and then 1555, last week's low.
Resistance is still 1576 and a good break should see it closing above 1580.
Sentiment stayed firm as futures again priced rich.
21 day moving average is now at 1537.

FBMKLCI Futures - Daily Message 14 Jan 2011

FKLI bias is still up and a close above 1572 should keep bias intact.
Resistance is yesterday's high of 1578, which is also Monday's opening low.
Support is expected at yesterday's low of 1569, which has been an important support and resistance level in the past 2 weeks. Furhter support may come at 1564 and 1555.
Sentiment however, was neutral as futures was priced about fair, but a close above 1578 likely restore positive sentiment.
21 day moving average is now at 1533.

FBMKLCI Futures - Daily Message 13 Jan 2011

FKLI bias remains up and a close above 1573 should keep bias intact.
Resistance is still expected at all time high of 1580.
Meanwhile support should come at Tuesday's high of 1569, then yesterday's low of 1565 and thereafter Monday's low of 1555.
Sentiment stays bouyant as futures was priced rich.
21 day moving average is now at 1530.

FBMKLCI Futures - Daily Message 12 Jan 2011



FKLI bias seem to turn up though it has to trade above 1569 (Tuesday's high and Friday's afternoon low) to confirm upward bias. Similarly, cash too need to trade above 1566.
Meanwhile, further selling may come at all time high of 1580.
Supports is expected at yesterday's low of 1555, psychological level 1550 and thereafter recent low of 1540.
Sentiment is somewhat positive as futures was priced at slight premium.
21 day moving average is now at 1527.

FBMKLCI Futures - Daily Message 11 Jan 2011

Bias turned down yesterday but a close above 1564 likely restore upward bias. Nonetheless, the longer term uptrend still intact.
Support is expected at recent lows of 1557, 1550 and then 1540.
While sellers may come at 1564, 1569 and thereafter Monday's high of 1580.
Sentiment was neutral as futures was priced about fair.
21 day moving average is now at 1525.

Crude Palm Oil Futures - Extended Consolidation?

Price is on short term downtrend though uptrend in the longer term is still intact. There is yet a clear sign of change in trend in the longer term basis despite the weak Friday close (chart 3). But we do note few negative signals which price has to overcome if indeed uptrend is still good.

The short term trend looks weak as: 1) 14-day uptrend line is broken (chart1); 2) 50-period moving average is broken and is pointing down (chart 2); and 3) price fail to close above early week low of 3790.

Nonetheless the longer term picture is still positive as it above weekly moving average and trendline while none of the support levels broken yet. In fact, if the 35 day cycle still plays out, we may find intermediate term bottom soon as we are on day 33. It might also see coinciding bottom in RSI.

Meanwhile sign of weakness evident are: 1) Failure to break above 3900 and closing below 3800 psychological level and 2) Inability of beanoil to close above RM1.80 for 3 weeks now.

Therefore, the 3800 likely be the important level to watch going forward, a close above it signals upward bias is still present while further close below it may see increase in selling pressure. A strong market should also see beanoil trading above 1.80.

A side note, the fall in Dec export is not dissimilar to what happened last year.

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FBMKLCI Futures - Daily Message 5 Jan 2011

FKLI bias stays up and close above 1550 should keep bias intact.
FKLI is in uncharted territory, so expect resistance at every round figures.
Support may come at 1540, 1530 and early Dec high of 1523.
Sentiment was somewhat weak as futures was priced cheap. But firmer market today may see upbeat sentiment returning.
21 day moving average is now at 1514.

FBMKLCI Futures - Daily Message 4 Jan 2011

FKLI bias is up again after printing all time high and a close above 1540 should keep bias intact.
Resistance is intraday high of 1546 and possibly psychological 1550.
Support is now 1530 and then early Dec high of 1523. Further down, consolidation low of 1513.
Sentiment stayed buoyant as futures again was priced rich.
21 day moving average is now at 1512.

Hang Seng Futures - New Upcycle?

We believe that Hang Seng has probably made an intermediate term bottom and a new cycle has begun within a longer term uptrend. On a longer term basis, Hang Seng is still on an uptrend as no clear signal of top occurred so far (chart 2 & 3). 

Hang Seng may have bottomed in late Dec and the next cycle is probably up on several reasons:

1) Sep to Dec bottom was 75 days, which is not too far from prior cycles of 70 and 68;

2) Price is still above the medium term uptrend (chart 2) and still above 20 week moving average (chart 3);

3) Price cannot close below 23000 support convincingly on weekly basis;

4) Price cannot fall further after breaking below 23000 with 2 long black candles on 15 Dec; and

5) Two dragonfly dojis a week apart with 22300 as bottom.

If so, price should continue to move higher and must close above 23700, which kept price low in the past month and a half. Next target would be Nov high of 25000. However, expect selling to continue should price close below 22300.

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FBMKLCI Futures - New Upcycle?

Price has likely entered into a new cycle, within a longer term uptrend. We believe long term trend have yet to turn down as:

1) FKLI yet to chart lower low since May, it is not even below Oct low of 1470

2) Still above its 20 week moving average (chart 3) and above medium term trendline (chart 2)

3) Yet to make significant bottom since May

At the same time, price maybe into the 9th day of new cycle with bottom at Dec 20 as:

1) 20 Dec bottom is 59 days after Sep bottom, slightly above 2x prior cycle;

2) 20 Dec bottom found support right at 6 month uptrendline; and

3) 21 day moving average starts moving higher.

Nonetheless, the 1530 resistance has yet to broken convincingly. Therefore it needs to be broken to confirm the new up-cycle. Do note too, further positive signs are evident. The first is sentiment been overwhelmingly positive in the past 2 weeks while Ringgit strengthened further which usually coincide with stronger KLCI. Also, in 08 FKLI closed above 1450 for only 2 weeks whereas it has been above the level for 15 weeks now while the midcaps continue to print higher close.

So if all come into play, price should close above 08 intraday high of 1536 soon and further 10 days of upward movement is possible. It be great to if breadth confirm the move. But a close below 1485 and definitely below 1470 should see increase in selling pressure.

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FBMKLCI Futures - Daily Message 3 Jan 2011

FKLI 1527 close gives a hint of weakness and it need to close back above 1530 resistatnce to keep upward bias intact. Otherwise, bias may turn sideways to down.
Further resistance is at 1540, Thrusday's high and then intraday all time high of 1546.
Supports are at early Dec high of 1523 and then prior consolidation low of 1513. Minor support may come at 1518.
Sentiment nontheless stayed positive as futures was again at premium to cash. Should sentiment has influence over price, it has to close above 1530 to keep it going.
21 day moving average is at 1509