Daily Report 230615 2015-06-23
Stock Index
This retracement of stock index was caused of overvaluation; major shareholders reduced holders; overseas-listed China Index returned to market; spot check on off-site capital and etcetera factors. But substantially the reason was too beautiful visions which reality cannot follow. Domestic macro economy data was not good; corresponding large-cap share in the high points; imagination space was narrow and typically previous bubble as CRRC burst; previous expectation was too high; objective reality cannot give support temporally. Technically, price fell back to the points in 28 May; the rebounding after 28 May was in vein, long positions were too optimistic. Although currently there might be some rebounds since gaining support levels, it was more likely to continue downward adjustment and it was hard to rebound back as previous times. Previous vision was too beautiful, the retracement may continue if news in economy area and industry upgrading area was lean to neutral. Current retracement was medium-term value return; there still existed space in downward market.
As for operation: after collapsed the points reached previous support level, there might be possibilities for rebounding but would not bound back, remain the short holdings as main operation approaches.
Last Friday after China market closed, LME copper price continues dropping; but fluctuant in low points on Monday and wait for Greek issue become clear. News shows in Monday night, EU leaders hold the summit and Greek made compromise, presented new edition reform scheme intraday; later in this week both sides of debts were expected to accomplish agreement base on new scheme, which lower the huge risk from market; in addition, U.S. existing-home sales soared 5.1% in May, indicated that real estate were continuously reviving which as well bring bolster to the market. On macro side, if Greek issue solved the global economy risk will be reduced, which shall consider as bullish to copper market.
As for fundamental side, recent days LME spots premium around $17, inventories decrease again, on Monday is 315,000tons which had decreased more than 2000tons. CFTC COT report states that COMEX gross positions reach 181,000 lots, approach a record high including short holdings increase 6000 lots; we consider copper price had accomplished majority downward space. Regarding spots in China were strong, in last Friday spots price were at RMB240/ton to premium RMB280/ton, the consumptions came into the market, supply tend to tighten and the domestic import window began to open; we inclined to recent copper price will have limitation on downward space.
Technically, LME copper price fell $5800 and went lower to $5500. Resistant is 5-days moving average $5700. On operation side, continue holding surplus short positions but, make stop-profit according to 5-days moving average. Domestic copper price stop-profit at RMB42,000.
Soybean No.1 contract ushered rebounding after dropping, market held large divergence in future price, factors as spots firmly and future surplus grain decreased, soybean output in new season did not reach the expectation did not bolster a continuing downward trend, but the hammer from sell delivery and large registered warehouse receipt made heavy hammer to price upward trend. It is predicted market will remain width fluctuation in a short period; short positions may take profits under RMB4200.
Soybean meal tendency is plainly weaker than the outer, under the influence of U.S. market continuous rebounding; import costs increase; crush margins in domestic oil plant loss critically and circumstance as grease trend is weak; we consider soybean meal price after holiday will be gradually fill up. As for operation, we recommend soybean meal short holdings closed off.
Last week PP futures continue volatile. On spots side, last week domestic PP market price fell after reorganized fluctuation. Mainly cause is demand in downstream remains tepid and, Datang group, Oriental energy device starts up, market tends to bearish trend. Market price lead to decline and petrifaction decrease the price passively. Half year past, majority of upstream enterprises are facing the medium term sales pressure and liquidating the inventories recently. But shipment receiving amount is limited on plant side, there is hammer on PP source downward trend. In addition, futures price went lower hammer the investing and trading.
For instance of wires, main quoted prices of north, east and south markets are RMB 8600-8700/ton, RMB 8800-9200/ton and RMB 8750-9250/ton, respectively.
For operation strategy: currently PP futures price continue fluctuant and we recommend waiting for further situation.
                                                        Dong LV (Investment Certificate NO. TZ008452)