How was your weekend? I hope you're all doing well where ever you are now.
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Economic Reports:
Alright, we have nothing on Monday, but on Tuesday, we have CB Consumer Confidence and New Home Sales, on Wednesday we have Core Durable Goods Orders m/m and FOMC meeting, Thursday we have Unemployment Claims and Pending Home Sales and lastly on Friday, we have Advance GDP q/q.
Seems like the best day to trade with nice range is on Monday. So trade safely and apply the right strategies on the respective days.
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Alright lets do a recap and then look at the week ahead.
Alright lets look at our levels last week. If you have not read our last week's update, you can click here.
Our levels for the S&P last week was:
The possible upper weekly range is: 1404
The possible lower weekly range is: 1328
We traded to the following weekly range:
Opened: 1366 from last close of 1365
High: 1390
Low: 1359.25
Closed: 1375
Monday and Tuesday saw us testing both the low of 60 which was our support as represented by the lower trend line below which held nicely and the high of last week of 88.50.
Basically Tuesday's price action's extreme was the range we have been trading for the rest of the week. With some major numbers coming out and with the IMF meeting looming on Friday and Saturday plus monthly options expiry, it was reasonable to expect a choppy session coming into the weekend.
So what we have done in the past 2 weeks was to form a flag of sort after breaking down from the upward channel.
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What to expect for next week:
Well, since this is a flag formation in the S&P, we want to know if this is a bull or bear flag. At this point, the trend line we are drawing seems to be getting less steeper which means the market is softening somewhat. But we are still trading above the 20ema on the weekly so until we break that, I would hold on to the opinion that the general trend is still up. But a second leg down to test the 20ema is a reasonable probability too for next week.
The weekly range for next week are:
The possible upper weekly range is: 1400
The possible lower weekly range is: 1328
If we break down from this flag for the second leg down since breaking the major trend line, I think the 20ema area should hold around the area of 28 unless an end of the world news comes on the wire. If we break out above, the next trend line above at about 1400 will need to be tested and overcame so I think a full upside rally is not yet in store for next week. Unless we have some extremely positive sentiments coming in, and we break the 1400 level and close above it, we might have an outside chance to test the recent highs.
So we will let price action be our guide. We will follow this contract closely as it will have a good indication for how we will be trading our local KLCI.
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Soybean Oil Futures.
Our levels for Soybean Oil Futures contract for last week was:
The possible upper weekly range is: 57.40 still
The possible lower weekly range is: 55.50 and an outside chance of reaching 54.80.
We traded to these following levels last week:
Opened: 56.45 from last close of 56.41
High: 56.49
Low: 55
Closed: 56.12
This contract came down to test our weekly low range of 55.50 and in fact touched a low of 55 on Thursday's trading which was just above our second level of support of 54.80. Then on Friday, we rallied to close back up near the upper weekly range and formed a hammer looking candle. Take note that the rally started at the same time when our FCPO staged the late rally to close near the 3500 range. This is the reason why we are looking at all these CME grains when we are trading the FCPO.
Due to I'm watching the market during trading hours, I cannot keep on coming to make new post during market hours. But if you would like to know what these grains are doing during our FCPO trading hours, you can contact me by dropping me an email and I will let you know how to contact me.
So what's in store for next week?
Here is the weekly range for next week:
The possible upper weekly range is: 57.50
The possible lower weekly range is: 55.20 and an outside chance of reaching 54.80.
I think the lower minor trend line at 55.20 will hold and we might go back up to test the highs again. If this does come true, look for our FCPO to be having upside momentum too.
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Soybean Futures
Our levels for this contract last week was:
The possible upper weekly range: 1465
The possible lower weekly range: 1400 and an outside chance to 1391 should we pull down further.
We traded to these following levels last week:
Opened: 1434.50 from last close of 1436.75
High: 1458.75
Low: 1403.75
Closed: 1458.75
Well last week we traded close to both the projected upper and lower weekly range by a few points.
We touched the low of 03.75 which was above our weekly low range and also above the 20ema in the daily chart and rebounded from there to close near our weekly high at 58.75. We have now closed above last week's high and above the 1450 resistance level and this is a very bullish signal for me. I think it is possible that we will go up to test the recent high of 1465, and then 80. If the other grains product such as corn and wheat can recover from their lows and not drag the price of this and Soybean Oil down, then I think we have a good chance to test these resistance levels.
The weekly range for next week are:
The possible upper weekly range: 1480 and an outside chance to test 1500.
The possible lower weekly range: 1402
I'm quite excited by the performance for this contract. Its positive performance will have a direct and close co-relation with our FCPO contract. So be on the lookout for the performance of all these grain products.
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Wheat Futures
Our levels for Wheat Futures for last week are as following:
The possible upper weekly range: 671
The possible lower weekly range: 611, 605
We traded to the following levels last week:
Opened: 623.25 from last close of 622.75
High: 628.25
Low: 604.25
Closed: 616.50
Price traded to a low of 04.25 on Wednesday which tested our weekly low of 605 which held nicely as price rebounded right after testing it. Then we staged a rally on Thursday to touch the weekly high of 28.25 before giving back most of the gains on Friday to close at 616.50.
Wheat is one of the two contracts which are performing poorly and are testing the support levels unlike the Soybean Oil and Soybean contracts. The price action of Friday's trade seems to indicate that the sellers still have quite some influence in this contract. So I think a rally from this point is not yet in the cards for next week. But I am encouraged by the performance of the Soybean Oil and Soybean contracts so I hope that can give some positive impetus for Wheat too.
I think the support should hold and we will see if the buyers can wrest control back for this contract.
The weekly range for next week are as follows:
The possible upper weekly range: 646
The possible lower weekly range: 600 should hold and next is 591
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Corn Futures
Our levels for Corn last week were:
The possible upper weekly range: 665
The possible lower weekly range: 605
We traded to the following levels last week:
Opened: 626.75 from last close of 627.75
High: 629
Low: 599.50
Closed: 601
Well.. what can we say.. Corn is still the weakest performer amongst all the 4 grains products. We have now broken our of the triangle pattern conclusively and remained closed there. This is quite a bearish indication. However, the good news is that there are still a few levels of support below. So not everything is going to the dogs yet. We did stage a rally on Thursday but gave everything back on Friday.
Now, what are the possible outcome for this contract? Well, first, the Soybean and Soybean Oil contracts could rally and hold this contract up. Second, this contract could puke further thereby dragging the forward march of the other grains product including our FCPO. What will happen remains to be seen.
The possible weekly range for this contract is:
The possible upper weekly range: 640
The possible lower weekly range: 583
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Since the CME grains are performing mixed, I think the upward march for our FCPO will be the same too. We may try to rally when the Soybean and Soybean Oil push up, but will pull back too when the performance of these contracts are being dragged by Corn and Wheat.
So we will follow closely on the performance of these contracts on a daily basis. I will not be posting them every morning except some brief comments. The reason for this is that by the time I finish the FKLI morning post, it is time for market to open already. But you can still contact me for the levels for FCPO and CME grains by dropping your contact info via email and I will get in touch with you.
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I will update the weekly outlook for FKLI and FCPO tomorrow morning as I do not have the charts here. But here is a brief summary of last week's price action.
KLCI:
We had a down week but it was nothing too serious. We are just chopping within current upper range for the past 2 months already. We expected the support to hold which is still is. We are still trading above the 20ema in the weekly so nothing too bearish yet.
I will post the weekly range tomorrow morning.
FCPO:
This is the second week we tested our weekly low range. Last week, price tested our low of 3500 and this week, we tested the weekly low of 3440. The low of the week was 3439 if I remember correctly. I hate not having my charts here now as I left my pen drive in the office. We then staged a late rally on Friday evening to test the low of last week at 3500s.
So what is in store for next week? Well, you need to wait for tomorrow once I get my hands on the charts.. :)
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So happy reading, get rested for next week and lets make some dough.
Ciao!
Best Wishes,
Tech Trader
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