Market Commentary - Thursday, 08 February 2007

FOREIGN EXCHANGE

EUR/USD closed higher on Wednesday and the high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. If it renews the decline off December's high, the 75% retracement level of this fall's rally crossing is the next downside target. Closes above the reaction high crossing are needed to confirm that a low has been posted.

USD/JPY closed higher on Wednesday and above the 20-day moving average crossing as it consolidates some of this week's decline. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. If it extends Monday's decline, gap support crossing is the next downside target. If it renews this winter's rally, weekly resistance crossing is the next upside target.

GBP/USD closed lower on Wednesday but remains above the 10-day moving average crossing. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the reaction low crossing are needed to renew the decline off January's high. Closes above December's high crossing are needed to renew last fall's rally.

USD/CHF closed higher on Wednesday as it consolidates some of Tuesday's decline but remains below the 20-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the reaction low crossing are needed to confirm that a high has been posted. If it renews the rally off December's low, October's high crossing is the next upside target.



BULLION

Gold closed lower on Wednesday as it consolidated some of Tuesday's rally but remains above the 10-day moving average crossing. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are overbought, diverging and are neutral to bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing would signal that a double top with December's high has been posted. If it extends this year's rally, weekly resistance crossing is the next upside target.

Silver closed slightly higher on Wednesday and above the 75% retracement level of the December-January decline crossing. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are overbought, diverging and are neutral to bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing are needed to confirm that a short-term top has been posted.



U.S. STOCK MARKET INDICES

DJI closed unchanged on Wednesday as it consolidates some of last week's rally. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. SPI closed higher on Wednesday as it extended last week's breakout above the previous high crossing. The low-range close sets the stage for a steady to lower opening on Thursday.

Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. NDI closed higher on Wednesday and above the 20-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term.



ENERGY

Crude Oil closed lower on Wednesday and below the 50% retracement level of the December-January decline crossing as it consolidates some of last week's rally. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are overbought and are neutral hinting that a short-term top might be in or is near. If it extends this year's rally, the 62% retracement level of the December-January decline crossing is the next upside target.

Natural Gas closed higher on Wednesday, however, the mid-range close sets the stage for a steady opening on Thursday. If it extends this year's rally, gap resistance crossing is the next upside target. Closes below the 20- day moving average crossing would confirm that a short-term top has been posted. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.



COFFEE

Coffee closed higher on Wednesday as it consolidated some of this week's decline but remains below the 10-day moving average crossing. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. If it renews this year's decline, the 62% retracement level of this fall's rally crossing is the next downside target.

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