0311 GMT [Dow Jones] Indonesia shares +0.6% at 2569.391 in light volume, tracking gains in most Asian markets with foreigners net buyers of IDR12 billion worth of shares so far; resistance eyed at 2580. Still, "local institutional funds are selling their shares on any rebounds, limiting gains of the main index," says trader at First Asia Capital. Among gainers: car maker Astra (ASII.JK) +1.0% at IDR36,600 on strong January car sales, cement maker Holcim Indonesia (SMCB.JK) +3.1% at IDR1,690 after reporting strong 2009 earnings, while coal miner Indika (INDY.JK) +3.2% at IDR2,450 on bargain-buying.
0231 GMT [Dow Jones] HSI +2.2% at 20,339.71, on rebound after 2.6% fall Friday, though sharp rise in short-selling volume (+104.4% Friday) likely to limit further gains (off intraday high of 20,427.09). "While a near-term rebound is possible given that many securities have already been oversold, continued volatility is likely as market nervousness over exit strategies in the US and China prevails," says Taifook; adds investors with courage to buy on dips will be amply rewarded when these fears subside. HK property stocks higher ahead of land sales later today, with Sino Land (0083.HK) +2.0% at HK$13.26, Henderson Land (0012.HK) +2.9% at HK$50.00, Hang Lung Properties (0101.HK) +2.7% at HK$28.95. Volume modest at HK$6.11 billion; immeidate resistance eyed at psychological 20,500.
0254 GMT [Dow Jones] EUR/USD will likely remain top-heavy due to views "the Fed is standing on surer footing compared to the ECB," says OCBC Bank strategist Emmanuel Ng. Tips in 1.3550-1.3650 range for today vs last 1.3638. Says investors will pay attention to quarterly figures from U.S. retailers this week, such as Nordstrom Monday, Target Tuesday as well as Gap Wednesday, as they "may give further insight into the state of the U.S. consumer." On European front, awaited items include German February Ifo Tuesday as well as German 4Q GDP Wednesday. Adds GBP/USD bias weak, tips in 1.5400-1.5500 band vs last 1.5474. "From our perspective, further failure to hold above 1.5500 on a sustained basis opens the way for another leg lower toward 1.5000.
0240 GMT [Dow Jones] Nikkei 225 futures up 3.0% at 10,440, rebounding on gains in U.S. stocks, investors eyeing other Asian markets, says Tamotsu Numazaki, manager at Traders Securities. "Investors may take cues from markets in Asia as they (all) reopen this week after the Lunar New Year holiday," he says. If Asian markets stay higher, Nikkei may reach 10,500. Adds investors, relieved as Nikkei futures' intraday low is being supported at 25-day moving average (10,320).
0245 GMT [Dow Jones] NZD/USD remains a buy on dips and should test 0.7100 this week while retaining good support at 0.6980, says RBC Capital Markets currency strategist Sue Trinh. Adds Kiwi still swaying to USD moves, overall global risk appetite with local data thin this week. Says house anticipates USD selling given month-end rebalancing flows expected from global portfolio managers; also tips heavy supply of funds out of Japan to be invested in high yielding, non-yen assets including NZD. "Net on net, buying dips in Kiwi on the week recommended." Pair last 0.7026.(
0212 GMT [Dow Jones] China shares a tad down early, following week-long holiday, with Wall Street's recent rally apparently offsetting impact of PBOC's credit tightening move after market close on final day of trading before Lunar New Year break. Shanghai Composite Index now down 0.1% at 3013.87, likely to hover around key 3000 level for now. Upside may be limited due to lingering concerns over possible further economy-cooling measures in near future. "The liquidity controls in China especially are making investors cautious about business prospects and economic growth," says Xu Yinhui from Guotai Junan Securities. Metal producers leading gains on rises in global commodity prices during holiday period. Zijin Mining (601899.SH) +1.1% at CNY8.69, Shandong Gold Mining (600547.SH) +0.9% at CNY70.71. Some banks weak, ICBC (601398.SH) off 0.4% at CNY4.89, Bank of China (601988.SH) flat at CNY4.13%.Shenzhen Index +0.2% at 1132.69.(
0210 GMT [Dow Jones] USD/JPY on rising channel, may rise above 92.00 soon as non-Japanese speculators pricing in a bit more JPY-weakness on improving risk appetite, says senior sales dealer at major bank in Tokyo. But pair may not be able to rise above 92.50 as "there's no reason to buy the pair much from a technical mark of 92.50," he says. Adds, pair rising due to last week's Fed discount rate hike, but the move's impact on FX now gone; "it's dangerous to join a bandwagon now." Adds "the Fed's move was normalizing, not tightening of monetary policy," indicating Fed won't hike its key policy rate for time being. Also bolstering expectations Fed on hold for now, U.S. January CPI below view, +0.2% on-month, core inflation down 0.1%, falling for first time since 1982. Pair last 91.67, tips in 91.20-92.20 range.
Week Ahead: Fed Sets Path for Markets
The Fed laid the first stone on the path to higher rates with its discount rate hike, giving the markets a new way to gauge the economic recovery. As a result, there will be heightened focus on interest rates around the Treasury's auction of $118 billion in notes in the coming week, as well as on two days of Congressional testimony from the Fed chairman himself.
http://www.cnbc.com/id/35488530
Euro May Drop to 10-Month Low on Fibonacci: Technical Analysis
(Bloomberg) -- The euro may fall to a 10-month low of $1.3091 after dropping below a key support level, according to Bank of Tokyo Mitsubishi UFJ Ltd. The 16-nation currency slid to as low as $1.3444 today, dropping through support at $1.3483, said Sumino Kamei, a Tokyo- based senior analyst at Mitsubishi UFJ. That level represents a 61.8 percent Fibonacci retracement of the currency’s gain from $1.2457 on March 4 to $1.5144 on Nov. 25.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aOYrbi8oZvXk
S&P 500 May Revisit January High: Technical Analysis
(Bloomberg) -- The Standard & Poor’s 500 Index may revisit its January high after a trend measure showed a pattern similar to one that last heralded a 27 percent gain in the benchmark, according to Janney Montgomery Scott LLC. The Moving Average Convergence/Divergence chart, based on the index’s average level during the past 9, 12 and 26 days, showed the MACD line rose above the signal line this week while both stayed below zero. That suggests the S&P 500 is likely to keep rising at least until its MACD line, at -4.16 at the close of trading today, advances to the zero average, said Dan Wantrobski, director of technical research at Janney Montgomery.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=arELmKYbFXQI
Oil May Breach 200-Week Average, Test Highs: Technical Analysis
(Bloomberg) -- Crude oil is poised to settle above its 200-week moving average today, positioning it to test new highs at $84 to $86 a barrel. It would be the third time in six months that the most- active oil futures price has breached the technical-resistance level on its way up. Oil rose to a one-year high of $82 a barrel on Oct. 21 after breaching the average in the week ended Oct. 16. It rose to a 15-month high of $83.95 on Jan. 11 after breaking through in the week ended Dec. 25.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aHeAFf89wgOo
Euro Worst to Come as Greece Hammerlocks ECB on Interest Rates
(Bloomberg) -- Derivative traders are signaling that the euro’s slump to a nine-month low will continue even if European Union leaders bail out Greece. Short-term rates for borrowing in euros in the forwards market are the cheapest relative to loans in dollars since September. The 50 percent collapse in that spread this month signals investors are betting the European Central Bank will keep its benchmark at a record low, sacrificing euro strength to prevent deficit-cutting by debt-laden economies in the region from stymieing growth.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=acOoDNFwLiAs
China Still Set for Asset Bubble After Reserve Rise, CLSA Says
(Bloomberg) -- China is still bound for an asset bubble after policy makers ordered banks last week to set aside more deposits as reserves for a second time in a month, CLSA Asia-Pacific Markets said. Investors are increasingly discounting the risks of tightening in China, where efforts to curb credit growth haven’t led to a “total collapse” in property demand, CLSA strategist Christopher Wood said. He intends to retain his holdings of Chinese real estate, banks and insurance in his so-called long- only thematic portfolio.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aUqeM.6O1XWI
Who's Afraid of the Fed? Market Actually Wants Rate Hikes
By: Jeff Cox CNBC.com
Forget the cosmetic move of raising the discount rate—the day the Federal Reserve really decides to start putting the brakes on growth could actually be a happy occasion for the stock market.
http://www.cnbc.com/id/35462014
ONG Focus - Technical Written by Oil N' Gold
Nymex Crude Oil (CL)
Crude oil's rise from 69.50 extended further to as high as 80.10 last week and closed strongly at 79.81. The stronger than expected rebound and break of 78.04 resistance suggests that fall from 83.95 has finished with three waves down to 69.50 already. This in turn argues that 83.95 might not be the top yet. Initial bias remains on the upside this week and further rise could be seen to retest 83.95 first. On the downside, below 77.76 minor support will turn intraday bias neutral and bring retreat towards 4 hours 55 EMA (now at 76.24). However, note that break of 72.66 support is needed to indicate that rise from 69.50 has completed. Otherwise, another rise would be in favor. In the bigger picture, crude oil was supported above mentioned 68.59 key support and thus, there was no confirmation of medium term reversal. The stronger rebound from 72.43 dampened our bearish view and argue that medium term rise from 33.2 might not be over yet. Nevertheless, as such rise from 33.2 is treated as a correction to whole decline from 147.27 only, even in case of another high above 83.95, we'd continue to expect strong resistance near to 50% retracement of 147.27 to 33.2 at 90.24 to bring reversal. On the downside, though, break of 72.43 support is now needed to indicate that crude oil has topped out.In the long term picture, there is no change in the view that fall from 147.27 is part of the correction to the five wave sequence from 98 low of 10.65. While the rebound from 33.2 is strong and might continue, there is no solid evidence that suggest fall 147.27 is completed and we're still preferring the case that rebound from 33.2 is merely a corrective rise only. Having said that, strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27.
Comex Gold (GC)
Gold's rally from 1044.5 extended further to as high as 1128.7 last week before turning sideway. The lack of momentum to sustain above 1126.4 resistance so far makes the picture quite unclear. But after all, from a near term point of view, another rise would be in favor as long as 1099.1 minor support holds. Sustained trading above 1126.4 will indicate that whole corrective fall from 1227.5 high might have already completed with three waves down to 1044.5 already. In such case, stronger rally should be seen to 1163 resistance for confirmation. On the downside, though, a break of 1099.1 support will argue that rebound from 1044.5 has completed and correction from 1227.5 is still in progress for another low before conclusion.In the bigger picture, outlook remains broadly unchanged. Price actions from 1227.5 are treated as corrections to rise from 931.3 only. Hence, even in case of another fall, downside is expected to be contained by 100% projection of 1227.2 to 1075.2 from 1163 at 1010.7, which is close to 1000 psychological level and bring long term up trend resumption. Decisive break of 1163 resistance will indicate that such correction has already completed and the long term up trend is set to resume for another high above 1227.5. In the long term picture, rise from 681 is treated as resumption of the long term up trend from 1999 low of 253 after interim consolidation from 1033.9 has completed in form of an expanding triangle. Next long term target is 100% projection of 253 to 1033.9 from 681 at 1460 level. We'll hold on to the bullish view as long as 931.3 structural support holds.
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