Market Commentary - -Thursday, 1 March 2007

FOREIGN EXCHANGE

EUR/USD gapped down and closed lower on Wednesday and the mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI remain neutral to 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. If it renews this this month's rally, the retracement level of this fall's rally crossing is the next upside target.

USD/JPY 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 turning bullish signaling that sideways to higher prices are possible near-term. Closes above the 10-day moving average crossing would signal that a short-term low has been posted.

GBP/USD closed slightly higher on Wednesday as it extended last week's rally above the reaction high crossing. 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 10-day moving average crossing will signal that a high has likely been posted.

USD/CHF closed higher on Wednesday and the mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near-term. Closes above the reaction low crossing are needed to confirm that a low has been posted.

BULLION

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

ENERGY

Crude Oil closed higher on Wednesday and above the 10-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Thursday. 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 lower on Wednesday as it consolidated some of last week's rally. The mid-range close sets the stage for a steady opening on Thursday. If it extends last month'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.

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.