Market Commentary - Monday, 5 March 2007

FOREIGN EXCHANGE

EUR/USD closed slightly lower on Friday as it consolidated some of last week's gains but remains above the retracement level of the December-January decline crossing . Stochastics and the RSI are overbought and are turning bearish hinting that a short-term top might be in or is near. The high-range close sets the stage for a steady to higher opening on Monday. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted.

USD/JPY closed lower on Friday and below the retracement level of the December-January rally crossing as it extended last week's decline. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near- term. Closes above the 10-day moving average crossing would confirm that a short-term low has been posted.

GBP/USD gapped down and closed sharply lower on Friday. The mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near-term. If it extends last week's decline, the reaction low crossing is the next downside target.

USD/CHF closed lower on Friday but remains above the retracement level of the December-January rally crossing. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are oversold and are turning neutral hinting that a short-term low might be in or is near. Closes above the 10-day moving average crossing would signal that a short-term low has been posted.

BULLION

Gold closed sharply lower on Friday as it extended last week's decline and closed below the reaction low crossing confirming that a short-term top has been posted. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term.

Silver closed sharply lower on Friday and spiked below the retracement level of the October-February rally crossing . The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes above the 10-day moving average crossing would signal that a short-term low has been posted.

U.S. STOCK MARKET INDICES

DJI closed lower on Friday as it extended last week's decline and the low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. SPI closed lower on Friday as it extended last week's decline but remains above the retracement level of the rally off last June's low crossing . The low-range close sets the stage for a steady to lower opening on Monday. Closes above the 10-day moving average crossing would confirm that a short-term low has been posted. NDI closed lower on Friday as it extended last week's decline. The low-range close sets the stage for a steady to lower opening on Monday. Closes above the 10-day moving average crossing would confirm that a short-term low has been posted.

ENERGY

Crude Oil posted an inside day with a lower close on Friday as it consolidates below the retracement level of the December-January decline crossing . The mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. Closes below the 20-day moving average crossing are needed to confirm that a short-term top has been posted.

Natural Gas closed lower on Friday but remains above support marked by February's low crossing . The low- range close sets the stage for a steady to lower opening on Monday. Closes below the reaction low crossing would confirm that a short-term top has been posted. Closes above the 10-day moving average crossing would signal that a short-term low has been posted.

COFFEE

Coffee closed lower on Friday as it extended last Thursday's decline below the 10-day moving average crossing. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. If it extends last week's decline, February's low crossing is the next downside target.