Market Commentary - Tuesday, 13 February 2007

FOREIGN EXCHANGE

EUR/USD gapped down and closed lower on Monday and the mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are neutral to 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 Monday as it extended last week's rally. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Closes below the 10-day moving average crossing would signal that a short-term high has been posted.

GBP/USD closed lower on Monday as it extended last week's decline and below the reaction low crossing . The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term.

USD/CHF closed higher on Monday as it extended last week's rally above the 10-day moving average crossing. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are 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 sharply lower on Monday as it consolidated some of last Friday's rally. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are overbought, diverging but remain 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 sharply lower on Tuesday as it consolidated some of last week's rally. The mid-range close sets the stage for a steady opening on Tuesday. 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 closed lower on Monday and below the 20-day moving average crossing as it extended last week's decline. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are bearish signaling that a short-term top has been posted. SPI closed lower on Monday as it extended last Friday's decline. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. NDI closed lower on Monday as it extended last Friday's decline. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are turning neutral to bearish signaling that sideways to lower prices are possible near-term.




ENERGY

Crude oil closed sharply lower on Monday and below the 10-day moving average crossing signaling that a short- term top has been posted. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are overbought but are neutral hinting that additional short-term gains are still possible. Closes below the 20-day moving average crossing are needed to confirm that a short-term top has been posted.

Natural Gas gapped down and closed below the 20-day moving average crossing on Monday confirming that a short-term top has been posted. The low-range close sets the stage for a steady to lower opening on Tuesday. If it extends Monday'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 lower on Monday as it extended last Friday's breakout below January's low crossing. The low- range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near-term. Closes above the reaction high crossing are needed to confirm that a short-term low has been posted.