Market Commentary - Monday, 12 February 2007

FOREIGN EXCHANGE

EUR/USD closed lower on Friday and the low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. Closes above the reaction high crossing are needed to confirm that a low has been posted. If it renews this winter's decline, the retracement level of this fall's rally crossing is the next downside target.

USD/JPY closed higher on Friday as it extended Thursday's rally above the 10-day moving average crossing. The mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Closes above last Tuesday's high would open the door for a possible test of gap resistance crossing.

GBP/USD gapped down and closed lower on Friday as it extended Thursday's breakout 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 neutral to bearish signaling that sideways to lower prices are possible near-term.

USD/CHF closed lower on Friday as it extended last week's breakout below the 10-day moving average crossing. The mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI are overbought and are turning neutral hinting that sideways prices are possible near-term. Closes below the reaction high crossing are needed to confirm that a high has been posted.



BULLION

Gold closed sharply higher on Friday as it extended this year's rally. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near-term. If it extends this year's rally, weekly resistance crossing is the next upside target. Closes below the 20- day moving average crossing would signal that a top with December's high has been posted.

silver closed higher on Friday and above the retracement level of the December-January decline crossing. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are overbought, diverging but are neutral to bullish signaling that sideways to higher prices are possible near-term. If it extends this year's rally, fib resistance crossing is the next upside target.



U.S. STOCK MARKET INDICES

DJI closed lower on Friday as it consolidates some of last week's rally. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought and are turning bearish hinting that a short-term top might be in or is near. SPI closed sharply lower on Friday as it consolidated some of this month's rally. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought and are turning bearish hinting that a short-term top might be in or is near. NDI closed sharply lower on Friday and 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 remain bullish signaling that sideways to higher prices are possible near-term.



ENERGY

Crude Oil closed higher on Friday and spiked above 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 are bullish hinting that additional short-term gains are still possible. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted.

Natural Gas closed lower on Friday and the low-range close sets the stage for a steady to lower opening on Monday. If it extends this rally, gap resistance crossing is the next upside target. Stochastics and the RSI are overbought and diverging signaling that a high might have been posted. Closes below the 20-day moving average crossing would confirm that a high has likely been posted.



COFFEE

Coffee closed lower on Friday and below January's low crossing thereby renewing this year's decline. 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 this year's decline, the 62% retracement level of this fall's rally crossing is the next downside target. Closes above last week's high crossing are needed to confirm that a short-term low has been posted.




The information set forth herein was obtained from sources which we believe to be reliable, but its accuracy cannot be guaranteed. It is not intended to be an offer, or the solicitation of any offer, to buy or sell the products or instruments referred herein. Any person placing reliance on this commentary to undertake trading does so entirely at their own risk