Market Commentary - Thursday, 15 February 2007

FOREIGN EXCHANGE

EUR/USD gapped up and closed above the reaction high crossing on Wednesday confirming that a low has been posted. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. Closes below Monday's low crossing would confirm that a short-term top has been posted.

USD/JPY closed lower on Wednesday and below the 10-day moving average crossing. The low-range close sets the stage for a steady to lower opening on Thursday. Closes below the reaction high crossing are needed to confirm that a high has been posted. If it extends this winter's rally, weekly support crossing is the next upside target.

GBP/USD gapped up and closed sharply higher on Wednesday as it consolidated some of this month's decline. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are oversold and are turning neutral hinting that a short-term low might be in or is near-term. Closes above the 20-day moving average crossing would signal that a short-term low has been posted.

USD/CHF gapped down and closed lower on Wednesday but remains locked in this year's trading range. The mid- range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. Closes below the reaction low crossing are needed to confirm that a high has been posted.



BULLION

Gold closed higher on Wednesday and above the retracement level of last summer's decline crossing. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are overbought, diverging but remain neutral to bullish signaling that sideways to higher prices are possible near-term. Closes below the 20-day moving average crossing would signal that a top has been posted.

Silver closed higher on Wednesday and spiked above the 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 but are 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



U.S. STOCK MARKET INDICES

DJI posted a new all-time high on Wednesday as it extended the long-term uptrend. The high-range close sets the stage for a steady to higher opening on Thursday. Closes below the reaction low crossing would confirm that a short-term top has been posted.

SPI posted a new high for the year on Wednesday thereby renewing last year's rally. The high-range close sets the stage for a steady to higher opening on Thursday. Closes below the reaction low crossing would confirm that a short-term top has been posted.

NDI closed sharply higher on Wednesday and is poised to test resistance marked by last Friday's high crossing . The high-range close sets the stage for a steady to higher opening on Thursday. Closes below the reaction low crossing would confirm that a short-term top has been posted.



ENERGY

Crude oil posted an inside day with a lower close on Wednesday and below 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 and are neutral to bearish signaling that sideways to lower prices are possible near-term. If it renews this year's rally, the retracement level of the December-January decline crossing is the next upside target.

Natural Gas closed lower on Wednesday and below the 20-day moving average crossing as it extended this week's decline. The low-range close sets the stage for a steady to lower opening on Thursday. If it extends this week's decline, the reaction low crossing is the next downside target. Closes above Monday's gap crossing would temper the near-term bearish outlook in the market.



COFFEE

Coffee closed higher on Wednesday as it consolidated 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 are oversold and are neutral to bullish hinting that a short-term low might be in or is near. Closes above the 20-day moving average 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