Market Commentary - Wednesday, 14 February 2007

FOREIGN EXCHANGE

EUR/USD gapped up and closed higher on Tuesday. The high-range close sets the stage for a steady to higher opening on Wednesday. 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.

USD/JPY gapped down and closed lower on Tuesday as it consolidates above January's low crossing . The low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI remain 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 Tuesday as it extended last week's decline below the reaction low crossing. The low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible 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 Tuesday as it consolidated some of Monday's rally and remains below the 10-day moving average. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. Closes below the reaction high crossing are needed to confirm that a high has been posted.




BULLION

Gold closed higher on Tuesday as it consolidated some of Monday's decline. The mid-range close sets the stage for a steady opening on Wednesday. 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 Tuesday 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 Wednesday. 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 sharply higher on Tuesday and above the 10-day moving average crossing tempering the near-term bearish outlook in the market. The high-range close sets the stage for a steady to higher opening on Wednesday. SPI closed sharply higher on Tuesday as it consolidated some of the decline off last Fridays high but remains below the10-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Wednesday. Closes above last week's high crossing are needed to renew this winter's rally. NDI closed higher on Tuesday as it consolidated some of the decline off last Friday's high. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term.



ENERGY

Crude oil sharply higher on Tuesday and above the 10-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Wednesday. 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 are needed to confirm that a short-term top has been posted.

Natural Gas closed higher on Tuesday and above the 20-day moving average crossing on Tuesday as it consolidated some of Monday's decline. The high-range close sets the stage for a steady to higher opening on Wednesday. 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 Tuesday as it extended Monday's decline. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. 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