Market Commentary - - Friday, 2 March 2007

FOREIGN EXCHANGE

EUR/USD closed lower on Thursday as it consolidated some of this week's gains but remains above the retracement level of the December-January decline crossing . Stochastics and the RSI are overbought and are turning neutral hinting that a short-term top might be in or is near. The low-range close sets the stage for a steady to lower opening on Friday. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted.

USD/JPY gapped down and closed lower on Thursday as it extended this week's decline. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. Closes above the 10-day moving average crossing would confirm that a short-term low has been posted.

GBP/USD closed lower on Thursday and below the 10-day moving average crossing . The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI remain 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 short-term top has been posted.

USD/CHF closed higher on Thursday. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are oversold and are turning neutral hinting that a short-term low might be in or is near. Closes above the 10-day moving average crossing would signal that a short-term low has been posted.

BULLION

Gold closed sharply lower on Thursday as it extended this week's decline and closed below the 20-day moving average crossing confirming that a short-term top has been posted. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term.

Silver closed sharply lower on Thursday and below the previous reaction low crossing confirming that a top has been posted. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes above the 10-day moving average crossing would signal that a short-term low has been posted.

U.S. STOCK MARKET INDICES

DJI closed lower on Thursday but well off early session lows due to short covering. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. SPI closed lower on Thursday as it extended this week's decline and spiked below the retracement level of the rally off last June's low crossing. The high-range close sets the stage for a steady to firmer opening on Friday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. NDI closed lower on Thursday as it extended this week's decline. The mid-range close sets the stage for a steady opening on Friday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near- term.

ENERGY

Crude Oil closed slightly higher on Thursday after testing the retracement level of the December-January decline crossing. Profit taking tempered early gains however, the high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are 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.

Natural gas closed slightly higher on Thursday as it consolidated some of this week's decline after falling just short of testing the February low crossing in early trading. A short covering bounce ahead of the close tempered early losses and the high-range close sets the stage for a steady to firmer opening on Friday. Closes above the 10-day moving average crossing would signal that a short-term low has been posted.

COFFEE

Coffee closed lower on Thursday and below the 10-day moving average crossing as it extends this week's decline. The mid-range close sets the stage for a steady opening on Friday. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near-term. If it extends this week's decline, February's low crossing is the next downside target