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Congress Pursues $80 Oil With Trading Limits
Congress Pursues $80 Oil With Trading Limits, Disclosure Rules
2008-07-23 04:02:01.0 (New York)
By Daniel Whitten July 23 (Bloomberg)
-- Congress may outlaw elements of oilfutures trading that lawmakers found distorted demand andcontributed to the 69 percent surge in prices in the past year. U.S. legislators are considering limits on the number ofoil contracts an investor can hold and may increase disclosurerequirements. Speculators such as Goldman Sachs Group Inc. usethe practices to bet on price swings, which may drive up prices,though they have no intention of taking delivery of underlyinggoods, lawmakers say. Proposals being debated this week in the Senate would bringprices more in line with demand, proponents say. Excluding theeffect of speculation, oil would be around $80 a barrel, 38percent lower than yesterday's price, according to Jesus ReyesHeroles, the chief executive officer of Petroleos Mexicanos.Critics say restrictions may interfere with the functioning of a$4 trillion annual market for crude oil.
Labels: Market News
Market Outlook ( July 21 ~ 25 )
Last week, Dow has completed the week with a gain of 393 points or +3.5%. On the contrary, STI lost 67 points or -2.4%. So STI is lagging behind Dow! Somehow, STI has to make a decision on which way to go in the coming week(s) as it has arrived at the intersection of two trendlines A & B as shown in the chart ( below ):
I am cautiously optimistic that the movement next week may be bullish bais. There are mild evidents from TA indicators supporting my view:
1. RSI - Positive divergence spotted between July 4 ( STI closed 2,892, RSI 22% ) and July 15 ( STI closed 2,830, RSI 29% ). Despite STI dived lower, RSI was supported at higher level.
2. ADX - There is early sign of convergence of +DI & -DI and that the ADX line ( which is currently representing the strength of the downtrend ) is losing strength. July 4 ( ADX 28, +DI 17, -DI 40, Var = 23 ), July 15 ( ADX 25, +DI 20, -DI 34, Var = 14 ).
I consider these evidents mild because the variance are not huge and that the period where they were observed was pretty short.
Below is a close up shot of the chart during this period with data label showing the two indicators readings:
Since the TA indicators are looking good, why do I still use the word "cautiously" optimistic? Well, the market is very much sentiment driven these days. Historically, STI does not have a mind of its own due to its pathetic size. Dow has risen 393 points last week and so it is due for some healthy retracement next week. If it is healthy profit taking, STI will be okay. If it is another wild swing or nose dive, whatever positive signs we have spotted on STI will be wiped out.
Another uncomfortable observation I have made is that on July 15 &16, STI has breached Trendline B briefly. Trendline B is an important trendline support traced back to June 2006. Does it means the support was broken and down the road STI will head lower to test 2,745? Once 2,745 is taken, we are looking at 2,660 & 2,280.
Labels: Market Direction
DJ News ( 7/15/08 ) - STI
DJ MARKET TALK: STI Off 1.8%; May Test 2745 In Weeks - Kim Eng
0450 GMT [Dow Jones] Sentiment in Singapore stock market remains edgy, mirroring risk aversion across Asian bourses, given uncertainty over impact of U.S. housing, credit troubles. STI down 1.8% at 2851.42 midday, after briefly breaching 2850 for 1st time since March 20, hitting 2843.59 intraday low; psychological support eyed at 2830 (March 19 intraday low). "We now accord a high probability that 2745 will be tested in the coming weeks or months as the final defense line at 2946 (61.8% Fibonacci level between March low of 2745 and May high of 3269) has already given way two weeks back," says Kim Eng Securities; expects STI to test 2745 if DJIA corrects to 9500 (DJIA closed down 0.4% at 11055.19 overnight). All 19 FTSE ST sub-indexes in red, with All Share Index down 1.7% at 717.38. Overall volume thin, with 367 decliners vs 99 gainers. (FKH)
(END) Dow Jones Newswires
July 15, 2008 00:50 ET (04:50 GMT)
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Mimosa: The support levels mentioned above tally with my post in July 3 which said " My worst case scenario is that STI may hit 2,745 to form a tripple bottom. Prior to that, 2,830 ( gap close )could be a good support. " Labels: Market Direction, Market News
MAS Warns Of Downside Risks To Markets
Business Times - 14 Jul 2008
MAS warns of downside risks to markets
SINGAPORE - Singapore's central bank said it is closely monitoring financial markets in the wake of the crisis surrounding US mortgage finance firms Fannie Mae and Freddie Mac, and warned of significant downside risks in global financial markets.
'Significant challenges and downside risks in the international financial markets remain and financial institutions and investors should stay vigilant,' the Monetary Authority of Singapore said on Monday.
The US Treasury and Federal Reserve called on Sunday for sweeping measures to lend money and buy equity, if necessary, in Fannie Mae and Freddie Mac, which own or guarantee US$5 trillion in debt - close to half the value of all US mortgages.
The US government plan to bolster the government-sponsored mortgage financiers helped calm markets on Monday, but did little to allay fears about the health of the US financial system. -- REUTERS
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Mimosa: The Fannie Mae and Freddie Mac saga is very disturbing. Fannie Mae and Freddie Mac hold or back $5.3 trillion of mortgage debt, about half the outstanding mortgages in the United States. Comparatively, the collapse of IndyMac is nothing!
Labels: Market News
Market Thought
U.S. stocks tumbled on Friday July 11 as fears about the stability of the top two home financing providers Fannie Mae and Freddie Mac, combined with oil at a record above $147, clouded the economic outlook. The collapse of IndyMac, a bank which had US$ 40 billion in asset, added bearish sentiment to the market. Barack Obama said Saturday there is "little doubt we've moved into recession". Things are still not looking any better yet in the US due to the credit crunch. Dow suffered another triple digit loss of -128 points.
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Here is my wild guess on the local market, not by mean of TA:
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STI is likely to track the weakness of its US counterpart to open lower on Monday but losses are either narrowed or pared at the end of the trading day. Both Dow & STI have shown some signs of short term bullishness ( witnessed by MACD & Histrogram ) so after the knee jerk on Monday ( may spread over to Tuesday ), there may be a rebound before the market trying to find new direction thereafter for the rest of the week. However, the odd may happen too ( never say never ). STI has been very resilient last week. So don't be overly surprise if STI decided to negate the 128 points drop in Dow and take cue from other Asian market.
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I am not certain if the stock markets have found its bottom yet as what DMG has predicted. The Chairman of UOB Mr Wee Cho Yew mentioned last week he believes it will take 1 ~ 2 years for the wound of the credit crisis to heal. As all US indices have just officially entered into the bear market ( the latest addition was S&P500 ). I am inclined with the thinking it may be too soon to think that we have found the bottom. Even if we do ( ie: we won't hit lower than 2,800 ), the upward journey is going to be a rough ride. May be 300 points up, 250 points down and then the cycle repeats many times before we edge up and hold firm to a new level. STI is likely to behave in this manner: It will track the movement of its US counterpart closely. If Dow up by triple digits, STI will rally the next day but pare gain later ( fear of profit taking in US ). If Dow down by triple digits, STI will tumble the next day but pare loss later ( in anticipation of US rebound ).
.Not much TA in this post but just included two charts to show the trendline support for Dow & STI:.
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.Finally, I have included a nice post from Shareinvestor.com, writen by the winner of Best FA Trader of SI 2008, very encouraging ( please click to enlarge ):Labels: Market Direction
Trading Digest 07-09-2008
The current market is pretty tough to analyse from TA perspective. There is no prominent chart formation ( triangle, pennant, flag, H+S...etc. ), no prominent channel, no meaningful candlestick pattern, trendline don't help much...etc. Okay, there are always TA indicators to help. For example, right now MACD is looking set to make a golden cross and RSI is titling up but that could change overnight because the local bourse is always taking cue from Wall Streets. Even with Elliot Wave, different fund houses are telling different story!
If I must still say something about the market, it is looking a little more bullish now than five days ago** ( based on MACD, Parabolic SAR & RSI ). Using CBL ( Count Back Line ), STI needs to breach 2,960 before it is confirmed the recent downtrend has reversed.
Again, I am apprehensive to make any prediction based on STI along. It is too easily influenced by other market, too volatile lately!
**see my post dated July 3.... "The closing candlestick today look like a perfect reversal pattern". The market did pick up from there... Labels: Trading Digest
STI Technical Analysis ( Kim Eng )
Mimosa Remark: One house say one thing!
The market rout over the past seven weeks culminated in last week’s Super Thursday’s sell-off in global equities. Selling momentum was so strong that the Straits Times Index’s head-andshoulder pattern implied downside target of 2890 was broken with the market hitting a low of 2862. We are unsurprised by the current technical rebound and expect the index to recover to 2960-3000 before the next correction cycle sets in.
The correction which started from 3269 remains incomplete from a medium-term perspective. Our reasons are as follows. We see the rebound in March as a Wave-b rally but with last week’s correction, we may be witnessing the beginning of a Wave-c sell-off should the STI break below the 2745 support.
A key level to watch is the 2946 support, which represents a 61.8% Fibonacci retracement from its recent high, below which the next line of defense will be at the March low of 2745. If the STI cannot hold above 2946 in the next few days, then a possible test of the 2745 low is quite likely.
With our short term STI target of 3000, investors can capitalise on the rebound with high beta stocks such as banks, SGX, Cosco and FerroChina. For those with bigger risk appetite, call warrants on the STI or Hang Seng Index would also be appropriate. As soon as the STI achieves its objective of 3000, investors should exit before negative sentiment returns.
Labels: Market Direction
DJ News
DJ MARKET TALK: Allco Commercial +7.7% As F&N Comes Onboard
0210 GMT [Dow Jones] Allco Commercial REIT (A48U.SG) +7.7% at 6-day high of S$0.765 on expectations of better growth prospects with conglomerate Fraser & Neave (F99.SG) as new major shareholder. Kim Eng Securities Goh Han Peng says, F&N's S$180 million purchase of 17.7% stake in REIT, 100% of REIT's manager Allco Singapore will provide property trust avenue of growth via F&N's property pipeline; "this latest deal effectively provides a new support level for Allco's stock price and is in line with the market view that the smaller and highly-geared REITs are potential acquisition targets as they face tighter access to funding amidst a credit crunch." Resistance tipped at 30-day moving average of around S$0.80. F&N +0.2% at S$4.44, as investors cheer group's plans to list its own commercial assets via Allco REIT, without need to go through lengthy listing process. (FKH)
July 07, 2008 22:10 ET (02:10 GMT)
Labels: Market News
STI Technical Analysis ( UOBKH )
Technical Analysis
Singapore bourse- near term outlook upgraded to positive
For the past 2 months, we had maintained a negative outlook on the Singapore bourse stating repeatedly that the index should decline to at least 2940 and potentially re-test prior lows. Even so, we did not expect the index to break the prior low. Last week, we suggested 2880 as a likely target level, stating that banking stocks have further downside potential. The FSSTI had declined to a low of 2864 last Thursday but closed at 2880.. We are no longer bearish on the near term outlook and believe that this is the best buying opportunity since March 2008. Some of the reasons are highlighted below.
1.One, the underlying wave pattern shows a tapering off pattern but allows for one more minor 30-40 point decline before a sustainable rebound ensues. The alternate count suggests that a low is in place at 2864.
2. Our market breadth indicator is at multi month lows but has not formed a new low as compared to the index. That is a bullish indication.
3. Our price differential model signals the sharpest risk aversion since January 22.
As such, we believe that risk/ reward favours taking positions on the long side. We favour banks, SGX, Ascott Reit, property stocks, Wing Tai Ho Bee and Keppel Land, Cosco , Beauty China, Synear Food, China Hongxing and plantation stocks, Golden Agri and Wilmar. As for the DJIA, we raise our downside target from 10900-11000 towards 11100. Our analysis, suggests a near term upward bias towards 11430 to be followed by a decline towards 11100. Thereafter, we expect a more sustainable rebound towards 12000 level.
Labels: Market Direction
SGX, FTSE Group & SPH Lauch New China Index
SGX, FTSE group & SPH launch new China index
Singapore Exchange has together with British equities index provider FTSE Group and Singapore Press Holdings launched a new China index that will track the top 20 Chinese stocks listed on the Singapore Exchange.
The new index called FTSE ST China Top Index will include shipbuilders Cosco Corp and Yangzijiang, steelmaker Delong Holdings and China Aviation Oil.
To be eligible for inclusion in the new index, companies must have either at least 30 percent ownership by the Chinese government, companies or nationals or derive at least 50 percent of revenues from China. The new index has been created to respond to the demand from institutional investors and fund managers in China and others.
SGX, SPH and FTSE also have a FTSE ST China Index that tracks 50 Chinese companies listed on the SGX. Companies in both indexes are selected based on their market capitalization levels.
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STX PO: Interesting! $2.32 was breached today. So TA is afterall quite reliable. What is not reliable is my own judgement & interpretation. I ought to slap myself!
Labels: Market News
Dow Entered Bear Market Officially
Yup, you may have thought we are already in the bear market for a while now but by definition a bear market begin when the index lost 20% from its top. On October 10, 2007, Dow closed at 14, 078. Last night, Down closed at 11,382. So Dow has just now entered the bear market officially ( source - 938 Business News ).
I did not see how the prediction of DMG would come true. At most, the index will take some respites from the downtrend but may trend down further. The closing candlestick today look like a perfect reversal pattern but again I am apprehensive of whether this is the bottom yet. My worst case scenario is that STI may hit 2,745 to form a tripple bottom. Prior to that, 2,830 ( gap close )could be a good support. All my pillow stocks are now in basement 5, I wonder how many levels down are there awaiting me?
Labels: Trading Digest
Still Alive & Kicking!
The past half a month has been crazy for me work wise. Visitors in town, letting one sales person go and asking another one to go too. Hired two replacements & train them from scratch ! Very busy !! Will try to keep up with the market !
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STX PO Update: While the support at $2.63 was briefly violated on June 16, a clear break did not occur so the fear where it will touch $2.32 did not materialize.
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STI: DMG is very brave with this comment in their report yesterday "For the STI, we are once again sticking our necks out and calling for a bottom to be reached very soon and that further downside from current levels would be limited and probably will be less than 100 points. As mentioned previously, we have derived this forecast from Elliot Wave prinicipals as the STI had generally traded in accordance with such in the last 32 months."
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SembMar : DJ Sembcorp Marine Unit Gets $400M Contract For Offshore Platform. The chart is looking good!
Labels: Trading Digest
