FOREX FUTURES : GWS

05-Nov 2008

2008-11-06T01:27:00.002+01:00

CURRENCIES COMMENTARY

More weakness in the Yen, Swiss and Pound directly ahead

Upcoming International Reports
11/05 German Service PMI
11/05 UK CIPS/NTC Research Services PMI
11/05 UK Industrial Production
11/05 Euro-zone Retail Trade
11/05 Japan BOJ Minutes
11/05 Japan Leading Indicators
11/06 UK Halifax Housing Price Index
11/06 German Manufacturing Orders Received
11/06 UK Monetary Policy
11/06 Euro-zone Monetary Policy
11/06 Canadian Building Permits
11/07 Swiss Employment
11/07 German Foreign Trade
11/07 France Trade Balance
11/07 Euro-zone ECRI Future Inflation Gauge
11/07 France ECRI Future Inflation Gauge
11/07 Germany ECRI Future Inflation Gauge
11/07 UK ECRI Future Inflation Gauge
11/07 German Industrial Production
11/07 Canadian Labor Force Survey
11/09 Japan Machinery Orders
11/10 France Industrial Production
11/10 UK Producer Price Index
11/10 Canadian New Housing Price Index
11/10 German Manufacturing Turnover Index

DOLLAR: The trade is somewhat confused on the direction of the Dollar today, as the market isn't sure whether the dominating flight to quality focus will be able to totally dominate over the near term flow of US slowing evidence. If the US offers up some form of stimulus package, or there are moves to lower international interest rates, those actions could be a flight to quality tempering force. On the other hand, if the US numbers are as weak as expected that could also temper the flight to quality interest in the Dollar in favor of the Yen. We suspect that the Dollar is somewhat overbought technically, especially when one considers that the US Dollar is almost 10 full points above the September lows and 14 points above the July lows. In the near term, we can't rule out some back and fill action in the Dollar, with initial support pegged at 85.52 and 85.00. However, in order for the Dollar to sustain below the 85.00 level, probably requires a resumption of the upward thrust in global equity prices, which in turn suggests that the credit crisis continues to thaw.

EURO: Evidence of slowing outside of the US is serving to limit the upward bias in the Euro this morning. In fact, with the Euro zone PMI readings rekindling concerns of a deep global recession again, one has to think that the odds of an ECB rate cut are increasing. In the current market condition, seeing the ECB cuts rates probably doesn't have a sustained impact on the Euro, as an ECB cut comes after most other mainstream central banks have already acted. In fact, while we aren't sure that the Dollar is going to spring to life in the face of slack US number flow ahead, we do think that slow US numbers will leave the bear camp in the Euro in control over prices. Current resistance at 130.29 looks solid and a return to at least 125 is certainly possible before this Fridays close. For the Euro to breakout to the upside, probably requires another upside breakout in the US equity markets.

YEN: Given the extreme flight to quality conditions that were required to lift the yen to the October highs, it is not surprising to see the Yen remain under pressure in the face of somewhat normal conditions. In fact, since we see a measure of calm ahead, that looks to leave the Yen in a downward posture on the charts. In the end, to turn up the Yen trend, probably requires a sharp slide in equity prices and evidence that credit markets are seizing up again. For the time being, resistance is pegged at 102.00 in the December Yen.

SWISS: The Swiss charts continue to look negative. In fact, evidence of extremely soft Euro zone PMI readings overnight and the prospect of a near term ECB rate cut just doesn't seem to benefit the Swiss. In order to turn the Swiss back up, might require a very serious deterioration of global confidence and for now that seems unlikely. Selling resistance in the December Swiss is seen at 86.48.

POUND: The Pound remains in a very negative chart posture and seeing the prospect of a UK rate cut doesn't seem to alter the patently bearish stance in the marketplace. In fact, the UK September manufacturing figures decline this morning simply foments the idea that the UK economy has significant slowing capacity ahead and that should leave the December Pound on a downward track. In fact, in the face of more US slowing evidence directly ahead, the Pound could easily return to the October lows.

CANADIAN DOLLAR: Clearly the Canadian Dollar was fundamentally and technically oversold around the October lows. We think the October lows are major lows and that a corrective profit taking slide in the Canadian into the upcoming set of US numbers should be viewed as a buying opportunity. In fact, traders should consider getting long futures and tightly wrapping up that position up with options for the coming three sessions.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
Buy a December Canadian Dollar at 86.40 and then purchase a December Canadian 85.00 put for 176 or better. Once in the long futures/long put position, look to sell the December Canadian 89.50 calls for 137 or better. In the event of a hard break over the coming three trading sessions, we might consider banking a profit on the short call. Risk the combination to a net loss in excess of 1,000.

PREVIOUS RECOMMENDATIONS:
1) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures 93.16 *hit second objective of 92.80. Hold the calls for a futures move above 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC): Declining momentum studies in the neutral zone will tend to reinforce lower price action. The market's short-term trend is negative as the close remains below the 9-day moving average. The outside day down and close below the previous day's low is a negative signal. The close below the 2nd swing support number puts the market on the defensive. The next downside objective is 82.90. The next area of resistance is around 86.17 and 88.13, while 1st support hits today at 83.55 and below there at 82.90.

EURO (DEC): Stochastics are at mid-range but trending higher, which should reinforce a move higher if resistance levels are taken out. The market's close above the 9-day moving average suggests the short-term trend remains positive. Since the close was above the 2nd swing resistance number, the market's posture is bullish and could see more upside follow-through early in the session. The near-term upside target is at 131.36. The next area of resistance is around 130.43 and 131.36, while 1st support hits today at 128.19 and below there at 126.87.

JAPANESE YEN (DEC): Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The close below the 9-day moving average is a negative short-term indicator for trend. The gap lower price action on the day session chart is a bearish indicator for trend. The defensive setup, with the close under the 2nd swing support, could cause some early weakness. The next downside target is 99.54. The next area of resistance is around 100.69 and 100.85, while 1st support hits today at 100.03 and below there at 99.54.

SWISS (DEC): Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The market's short-term trend is negative as the close remains below the 9-day moving average. The market has a slightly positive tilt with the close over the swing pivot. The next downside objective is 85.01. The next area of resistance is around 86.31 and 86.80, while 1st support hits today at 85.42 and below there at 85.01.

04-Nov 2008

2008-11-05T01:06:00.003+01:00

CURRENCIES COMMENTARY

A temporary lull in global recession fears because of the election

Upcoming International Reports
11/04 Swiss Consumer Price Index
11/04 German Retail Sales
11/05 German Service PMI
11/05 UK CIPS/NTC Research Services
11/05 UK Industrial Production
11/05 Euro-zone Retail Trade
11/05 Japan BOJ Minutes
11/05 Japan Leading Indicators
11/06 UK Halifax Housing Price Index
11/06 German Manufacturing Orders Received
11/06 UK Monetary Policy
11/06 Euro-zone Monetary Policy
11/06 Canadian Building Permits
11/07 Swiss Employment
11/07 German Foreign Trade
11/07 France Trade Balance
11/07 Euro-zone ECRI Future Inflation Gauge
11/07 France ECRI Future Inflation Gauge
11/07 Germany ECRI Future Inflation Gauge
11/07 UK ECRI Future Inflation Gauge
11/07 German Industrial Production
11/07 Canadian Labor Force Survey
11/09 Japan Machinery Orders
11/10 France Industrial Production
11/10 UK Producer Price Index
11/10 Canadian New Housing Price Index
11/10 German Manufacturing Turnover Index

DOLLAR: While the Dollar did manage another new high for the move early today, the Dollar has reversed course in the wake of strength in global equity markets. With the US equity markets apparently poised to discount the threat of more severe US slowing ahead and the markets in general anticipating a series of global interest rate cuts in the coming sessions, we can understand a temporary downgrading of the flight to quality status in the Dollar. In fact, it is possible that the December Dollar index will fall to close-in support of 85.50 in the face of the election. We suspect that a large portion of the world is so fed up with US acrimony that merely getting beyond the election without a protracted court battle will be seen as a positive for the global economy. At least in the near term, the threat of financial sector turmoil and severe slowing will be discounted and that could possibly send the Dollar temporarily below initial support to even lower support on the charts down at 84.95.

EURO: Apparently a large portion of the foreign press is pontificating that an Obama victory will be welcomed, which means those members of the press have already forgotten the miserable performance of the US Congress in the face of the urgent bailout package. For the time being, we suspect that the market will anticipate calm and that could allow for a temporary bounce back toward the 130 level in the December Euro. In fact, with a series of international rate cuts expected later this week, it is possible that the Euro will forge a rise to at least 131.14. In the event that something technical breaks down in the US election process, it is even possible that the Euro could forge a temporary return to the October 30th spike high zone of 132.77. In the end, we seriously doubt that the Euro is set to make a sustained upside run, as the threat of a severe global recession will remain in place and it is entirely premature to suggest that the financial sector turmoil is going to remain under control.

YEN: As in the Dollar, the Yen is apparently facing a temporary calming of extreme anxiety and that could allow for a temporary slide back into the 100 to 98.00 zone. Up trend channel support off the August through October time frame would seem to allow for at least at temporary slide down to 98.10 but perhaps to only 98.24 on Wednesday.

SWISS: With another new low for the move overnight it would seem like the Swiss won't even garner a temporary flow of short covering action in the wake of a let down in the Dollar. In fact, even in the face of weakness in the Dollar and the yen, the Swiss remains ultra weak and therefore traders shouldn't expect the December Swiss to sustain a rally back above the 86.00 level for any extended period of time.

POUND: Disconcerting retail data from the UK seems to leave the Pound entrenched in a downward pattern on the charts, even though the trade is expecting the BOE to make a move to lower rates later this week. However, the December Pound could still forge a recovery bounce to 163.19 which is a down trend channel resistance line today but that line falls to only 162.15 on Wednesday.

CANADIAN DOLLAR: With another new high for the move in the Canadian overnight, it would seem like the Canadian is benefiting from the euphoria being seen in global equity markets. Therefore one can't rule out some additional follow through buying for the coming 24 hours. In fact, given the markets posture it is possible that the December Canadian will attempt to climb above the October 20th high of 85.25. In the end, the market can act like everything is set to improve.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures 93.16 *hit second objective of 92.80. Hold the calls for a futures move above 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 11/04/2008: Daily stochastics turning lower from overbought levels is bearish and will tend to reinforce a downside break especially if near term support is penetrated. The market's short-term trend is positive on the close above the 9-day moving average. The market has a slightly positive tilt with the close over the swing pivot. The next downside objective is now at 85.00. The next area of resistance is around 87.78 and 88.30, while 1st support hits today at 86.14 and below there at 85.00.

EURO (DEC) 11/04/2008: The stochastics indicators are rising from oversold levels, which is bullish and should support higher prices. A negative signal for trend short-term was given on a close under the 9-bar moving average. The outside day down is somewhat negative. The close below the 2nd swing support number puts the market on the defensive. The near-term upside objective is at 128.47. The next area of resistance is around 127.04 and 128.47, while 1st support hits today at 125.14 and below there at 124.66.

JAPANESE YEN (DEC) 11/04/2008: Declining momentum studies in the neutral zone will tend to reinforce lower price action. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The outside day down is a negative signal. The market is in a bearish position with the close below the 2nd swing support number. The next downside objective is 100.59. The next area of resistance is around 101.46 and 101.94, while 1st support hits today at 100.78 and below there at 100.59.

SWISS (DEC) 11/04/2008: A crossover down in the daily stochastics is a bearish signal. Daily stochastics are trending lower but have declined into oversold territory. The close below the 9-day moving average is a negative short-term indicator for trend. The close below the 2nd swing support number puts the market on the defensive. The next downside target is 84.38. The next area of resistance is around 85.84 and 86.71, while 1st support hits today at 84.68 and below there at 84.38.

03-Nov 2008

2008-11-04T03:07:00.003+01:00

CURRENCIES COMMENTARY

Expect some sideways action as the US election restrains sentiment

Upcoming International Reports
11/03 Swiss PMI
11/03 German Manufacturing PMI
11/03 Euro-Zone RBS\NTC Research Manufacturing PMI
11/03 Euro-Zone RBS\NTC Research Services PMI
11/03 UK CIPS/NTC Research Manufacturing PMI
11/04 Swiss Consumer Price Index
11/04 German Retail Sales
11/05 German Service PMI
11/05 UK CIPS/NTC Research Services PMI
11/05 UK Industrial Production
11/05 Euro-zone Retail Trade
11/05 Japan BOJ Minutes
11/05 Japan Leading Indicators
11/06 UK Halifax Housing Price Index
11/06 German Manufacturing Orders Received
11/06 UK Monetary Policy
11/06 Euro-zone Monetary Policy
11/06 Canadian Building Permits
11/07 Swiss Employment
11/07 German Foreign Trade
11/07 France Trade Balance
11/07 Euro-zone ECRI Future Inflation Gauge
11/07 France ECRI Future Inflation Gauge
11/07 Germany ECRI Future Inflation Gauge
11/07 UK ECRI Future Inflation Gauge
11/07 German Industrial Production
11/07 Canadian Labor Force Survey
11/09 Japan Machinery Orders
11/10 France Industrial Production
11/10 UK Producer Price Index
11/10 Canadian New Housing Price Index
11/10 German Manufacturing Turnover Index

DOLLAR: The Dollar starts the new month out sitting within a broad formation and fresh off a rather historical 4 month run up. It would seem like global equity markets are confident that the financial crisis is at least being contained in the near term and that could have been the genesis of the sharp setback in the Dollar last week! Clearly the US Dollar was lifted by the view that the US Dollar was the place to be in the face of a global financial crisis that might be spreading to the somewhat defenseless emerging markets. It also seems as if the world is confident that the US Fed will in the end, Shepard the US economy through the impending recession better than other central banks. In fact, the Fed's Lacker might have hit right on the flight to quality theme in the Dollar overnight, by suggesting that the US Fed was well positioned to handle the recession. However, it is also possible that a slightly positive tilt in global equity markets will serve to diffuse the flight to quality buying interest in the Dollar today and we also have to wonder if the trade will be able to remain positive toward the Dollar in the face of an avalanche of soft US numbers this week. Furthermore, with the October 28th Commitment of Traders with Options report for US Dollar showing the Non-commercial position to be net long 19,709 contracts and the Nonreportable position net long 1,130 contracts, that made the "combined" spec and fund position net long 20,839 contracts as of early last week. However, with the Dollar index at last week's lows falling almost 400 points, we suspect that the Dollar enters the week with only a moderate net spec long positioning. Critical support is pegged at 85.50, with the true measure of the bulls control seen in the event that the Dollar strengthens on patently weak scheduled US data flow!

EURO: The Euro was clearly oversold around the October lows, as the October 28th Commitment of Traders with Options report for Euro showed the Non-commercial position to be net short 32,604 contracts, with the Nonreportable position also net short 2,790 contracts and that made the "combined" spec and fund position net short 35,394 contracts as of early last week. However, the Euro has managed a rather significant bounce in the wake of the COT report mark off and it is possible that a slight tempering of global financial sector anxiety will take some of the distinct pressure off the Euro. On the other hand, for the Euro to show signs of bottoming this week, probably requires the Euro to rally in the face of slack US economic readings. At least initially, the Euro looks to have solid support at the 126.53 level but more solid support isn't seen until the even number zone of 125.00. For the Euro to rise sharply, off current levels probably requires a series of gains in global equity markets in the coming trading sessions.

YEN: The yen starts the week out with a bad technical trade on the charts and clearly seeing global equity markets on a positive footing serves to extract flight to quality interest from the Yen. Initial support in the December Yen is pegged at 100 and then again all the way down at 98.00. For the time being, the Yen looks to have a direct inverse relationship with the equity markets and for the time being, the Yen doesn't seem to be capable of rising off the concern for severe slowing in the global economy. In other words, the yen bulls need financial or credit market uncertainty just to attract flight to quality buying.

SWISS: The Swiss looks to start the week out sitting within a wide consolidation zone. In fact, we can't rule out a sideways chop in the December Swiss between 88.50 and 86.00 over the coming two trading sessions. In the end, the down trend pattern would seem to have an ongoing edge, as one gets the sense that more evidence of US slowing is destined to translate into fears of more slowing outside of the US.

POUND: While the Pound has managed a somewhat significant bounce off its October lows, the outlook for more significant slowing ahead is hardly an environment that is expected to pull buyers toward the Pound. However, with UK PMI manufacturing readings actually managing a slight gain over the prior month that could lend the December Pound some support at the 160.00 level, especially if global equity markets managed to stay positive throughout the US trading session today.

CANADIAN DOLLAR: The Canadian Dollar was certainly oversold around the October lows and seeing the markets in general absorb the threat of severe recessionary conditions ahead clearly takes some of the pressure off the Canadian Dollar. In fact, the Canadian fell so hard in the September/October time frame that a simple retracement of that slide would allow for a bounce up to 84.64 without even altering the entrenched down trend pattern on the charts. While the October lows might end up being a major low, we are not convinced that the Canadian will be able to sustain a rise above 85.00, without seeing a noted improvement in the global economic outlook.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long December Dollar 84 puts 99, *Liquidated at the market Friday 1445.
2) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures 93.16 *hit second objective of 92.80. Hold the calls for a futures move above 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC): Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. The market's short-term trend is positive on the close above the 9-day moving average. The close over the pivot swing is a somewhat positive setup. The next downside target is now at 84.92. The next area of resistance is around 87.22 and 87.81, while 1st support hits today at 85.78 and below there at 84.92.

EURO (DEC): Daily momentum studies are on the rise from low levels and should accelerate a move higher on a push through the 1st swing resistance. The market's short-term trend is negative as the close remains below the 9-day moving average. The gap lower price action on the day session chart is a bearish indicator for trend. The market setup is somewhat negative with the close under the 1st swing support. The next upside objective is 128.19. The next area of resistance is around 127.88 and 128.19, while 1st support hits today at 126.94 and below there at 126.30.

JAPANESE YEN (DEC): Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The close under the 18-day moving average indicates the intermediate-term trend could be turning down. The gap down on the day session chart is bearish with more selling pressure possible today. The market's close below the 1st swing support number suggests a moderately negative setup for today. The next downside target is now at 101.40. The next area of resistance is around 101.40 and 101.40, while 1st support hits today at 101.40 and below there at 101.40.

SWISS (DEC): Momentum studies are rising from mid-range, which could accelerate a move higher if resistance levels are penetrated. The close under the 18-day moving average indicates the intermediate-term trend could be turning down. The gap lower on the day session chart is bearish and puts the market on the defensive. The close below the 1st swing support could weigh on the market. The near-term upside objective is at 87.66. The next area of resistance is around 87.24 and 87.66, while 1st support hits today at 86.04 and below there at 85.27.

30-Oct 2008

2008-10-31T02:04:00.002+01:00

CURRENCIES COMMENTARY

Ongoing weakness in the Dollar expected today

Upcoming International Reports
10/30 France Employment Situation
10/30 France Producer Price Index
10/30 German Employment Situation
10/30 Euro-zone Business and Consumer Survey
10/30 Canadian Industrial Product and Raw Materials
10/30 Canadian Producer Price Index
10/30 Japan Manufacturing PMI
10/30 Japan Consumer Price Index
10/30 Japan Household Spending
10/30 Japan Unemployment Rate
10/31 Euro-zone Unemployment Rate
10/31 Swiss KOF Leading Indicator
10/31 UK Consumer Confidence (GfK)
10/31 Canadian GDP (By Industry)
11/03 Swiss PMI 2:30 AM11/03 German Manufacturing PMI
11/03 Euro-Zone RBS\NTC Research Manufacturing PMI
11/03 Euro-Zone RBS\NTC Research Services PMI
11/03 UK CIPS/NTC Research Manufacturing PMI
11/04 Swiss Consumer Price Index
11/04 German Retail Sales

DOLLAR: With global macro economic anxiety still generally on the decline and global equity prices extending recent strength, it is not surprising to see the Dollar continue to liquidate. Apparently a flow of "better" employment readings from Germany overnight adds to the Dollar weakness and we suspect that the US number flow later this morning will add to the downside tilt. However, the December Dollar index might have found fairly solid support atthe 84.00 level, especially if US equity markets fail to maintain a positive track in the morning trade. In the near term, we would expect the bear camp to retain a slight edge as the Dollar balances the overbought condition brought on by the sharp run up in the Dollar in the month of October. On the other hand, once the euphoria of the latest round of US rate cuts dies down and equity markets begin to bank profits ahead of week and month ends,we suspect that the Dollar will begin to show signs of support at or above the 84.00 level. While we doubt that theDollar will be greatly influenced by the US GDP readings this morning, seeing the readings decline by more than1% could actually lend some support to the Dollar!

EURO: While Euro zone Consumer Confidence hit another new low, the Euro seems to be more interested in the slightly better German employment numbers. It is also possible that a large measure of the gains in the Euro over the last two trading sessions have been technical short covering gains and not fresh outright buying. However,despite continuing calls for coordinated global rate cuts, the ECB seems to be content to be the last to cut rates and that could eventually put the Euro back into a hard downward movement on the charts. For the near term, the euphoria being thrown off by positive action in the global equity markets looks to leave the Euro bulls with a veryslight advantage. However, the December Euro would seem to have thick overhead resistance on the charts up at132.70 and in the event that equity prices falter, we suspect that the upward motion in the Euro will be quickly reversed.

YEN: Up trend channel support today is seen at 100.22 in the December yen and with global equity markets managing some follow through gains, we suspect that the Yen bears will be able to retain a minor edge early inthe trade today. In fact, Yen traders might watch for a slide back below 938.70 in the December S&P as a decline back below that level could signal an impending recovery in the Yen. At least initially, the Yen remains in aliquidation mode but the action in the stock market should ultimately be the main focal point.

SWISS: The short covering impetus in the Swiss should be close to running its course. In fact, unless the stock markets manage another big up move today, we suspect that the overnight high in the Swiss of 89.31 could besolid resistance. However, traders need to watch the flow of US data closely today as another "not as bad as expected" reading could give the Swiss another day of gains and a possible shot at a retest of the 90.00 level.

POUND: The Pound action is all about short covering and the current lack of flight to quality anxiety. In fact, with another UK Nation wide Housing Price index decline overnight, it is clear that economic conditions inside the UK continue to weaken and that in turn suggests that the Pound gains are technical in nature and are primarily a knee-jerk reaction to profit taking in the Dollar. However, one can't rule out a slight upside extension today in theface of initial equity market optimism. The next resistance zone in the December Pound is 166.80.

CANADIAN DOLLAR: With macro economic optimism still generally in place, the Canadian extensive and historically oversold, it is not surprising to see the Canadian forging more gains today. In fact, with the US stockmarket showing ongoing strength and the residual from the US rate cut move keeping global slowing fears in check, it is possible that the December Canadian will make a run toward the next resistance zone on the chartsup at 85.25.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long December Dollar 84 puts 99, use an objective of 210. Risk to a close below 30.
2) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a netloss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long callplay. **Re-Sold the December futures 93.16 *hit second objective of 92.80. Hold the calls for a futures move above 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC): A bearish signal was triggered on a crossover down in the daily stochastics. Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The defensive setup, with the close under the 2nd swing support, could cause some earlyweakness. The next downside target is now at 83.61. The next area of resistance is around 86.19 and 87.66, while 1st support hits today at 84.17 and below there at 83.61.

EURO (DEC): Daily momentum studies are on the rise from low levels and should accelerate a move higher on a push through the 1st swing resistance. The market's close below the 9-day moving average is anindication the short-term trend remains negative. The gap up on the day session chart gave a bullish indicator andmore follow through could be seen this session. Since the close was above the 2nd swing resistance number, the market's posture is bullish and could see more upside follow-through early in the session. The next upside objective is 130.87. The next area of resistance is around 129.57 and 130.87, while 1st support hits today at127.13 and below there at 126.00.

JAPANESE YEN (DEC): Momentum studies trending lower from overbought levels is a bearishindicator and would tend to reinforce lower price action. The market's short-term trend is positive on the closeabove the 9-day moving average. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside objective is 101.92. The next area of resistance is around 103.84 and 104.52, while1st support hits today at 102.54 and below there at 101.92.

JAPANESE YEN (DEC): Momentum studies trending lower from overbought levels is a bearish indicator and would tend to reinforce lower price action. The market's short-term trend is positive on the close above the 9-day moving average. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside objective is 101.92. The next area of resistance is around 103.84 and 104.52, while1st support hits today at 102.54 and below there at 101.92.

SWISS (DEC): Momentum studies are trending higher from mid-range, which should support a move higher if resistance levels are penetrated. The intermediate trend could be turning up with the close back abovethe 18-day moving average. If yesterday's gap higher on the day session chart holds, additional buying could develop this session. There could be more upside follow through since the market closed above the 2nd swing resistance. The next upside objective is 89.74. The next area of resistance is around 88.98 and 89.74, while 1st support hits today at 87.24 and below there at 86.25.

29-Oct 2008

2008-10-30T03:03:00.002+01:00

CURRENCIES COMMENTARY

Less flight to quality interest to weaken the $ and the Yen

Upcoming International Reports (all times CT)
10/30 France Employment Situation
10/30 France Producer Price Index
10/30 German Employment Situation
10/30 Euro-zone Business and Consumer Survey
10/30 Canadian Industrial Product and Raw Materials
10/30 Canadian Producer Price Index
10/30 Japan Manufacturing PMI
10/30 Japan Consumer Price Index
10/30 Japan Household Spending
10/30 Japan Unemployment Rate
10/31 Euro-zone Unemployment Rate
10/31 Swiss KOF Leading Indicator
10/31 UK Consumer Confidence (GfK)
10/31 Canadian GDP (By Industry)
11/03 Swiss PMI
11/03 German Manufacturing PMI
11/03 Euro-Zone RBS\NTC Research Manufacturing PMI
11/03 Euro-Zone RBS\NTC Research Services PMI
11/03 UK CIPS/NTC Research Manufacturing PMI

DOLLAR: While there is a significant amount of information flying around in these markets, one constant hasbeen strength in the Dollar in the face of growing anxiety and weakness in the Dollar in the face of declining anxiety. Certainly the Dollar was over wound around its recent highs and we have to think that the US efforts to control its financial sector turmoil are starting to tamp down the problems somewhat. We also think that another US rate cut today was factored into the Dollar around its recent highs and seeing the US Fed follow through witha 50 basis point cut today could give off the impression that help is on the way for the threat of classic slowing in the US economy. However, it isn't a given that the US Fed will go the full 50 basis point cut expected by many traders, as some former Fed members have suggested that the Fed doesn't want to use up its ammunition. In the end, the Dollar will continue to be seen as a periodic primary flight to quality instrument, but there is a chance now that the high this week could be a moderately significant high! However, one can't sell the Dollar index futures inthe face of such historic potentials ahead and therefore one has to be content to purchase Dollar puts and quantify risk. Buy the December Dollar 84 puts for 100.

EURO: While the euro has already managed a short covering bounce off the recent lows and the Dollar mighthave made a moderate top, we aren't willing to chase the euro on the upside, especially since the ECB still looks to be one of the last to move toward lower interest rates. Clearly the ECB President has promised to act, but waiting until everyone else have moved to cut rates could mean that sentiment in the Euro zone is set to be thelast to improve and that could leave the Euro languishing in a 130 to 123 trading range over the coming weeks. Infact, with French and German employment figures due in on Thursday morning, we have to think that the euro is going to remain vulnerable to some near term weakness, even if the October lows are starting to look a little more solid. Keep in mind, not all of the weakness in the euro in the July through October slide was exclusively the macro economic or interest rate differential impact, some of the declines were pure and simply flight to quality interest in the Dollar. One should pick a top in the Dollar, before one picks a bottom in the Euro because the Euro might be the last currency to gain consistently on the Dollar.

YEN: While the yen has already extracted some of the crazy pricing seen early in the week, it could take an offthe charts negative global event to put the Yen back to the recent highs. However, on a rise back above 104.66 traders should consider the purchase of some November Yen puts for a position trade! With the BOJ expected to reduce interest rates and the US moves potentially yielding some calming results we think that the overall financial or credit crisis component is about to be reigned in and that should leave the world with only a very severe slowdown projection ahead and that might not be enough to justify ongoing historic flight to quality pricing in the Yen!

SWISS: We think that the Swiss is in a good position to benefit from a slight shift in sentiment. Certainly the Swissis oversold and in the face of a temporary calm, we would not be surprised to see the December Swiss mount a recovery move back toward the upper end of a trading range defined as 87.28 to 89.52.

POUND: It goes without saying that the Pound was extensively oversold around the recent 6 year lows and it should also be noted that the Pound was one of the primary whipping posts for the magnitude of the slowing expected in the global economy. While we are not suggesting that the all clear signal has been sounded, we think that extreme anxiety off the complicated financial market turmoil is capable of calming down now and that could allow for a moderate recovery reaction in the Pound. Just a normal retracement off the October slide in the Pound would allow for a bounce to 162.54, while a 50% retracement would project the December Pound up to 165.72.

CANADIAN DOLLAR: Just a normal retracement of the September and October failure in the Canadian would project a bounce to 84.64 and that clearly highlights the historical magnitude of the sell off in the Canadian. Whileit might be premature to buy Canadian futures, traders should consider selling a March Canadian Dollar 81 call for199 and using that money to buy three March Canadian Dollar 84.00 calls for roughly a net cost of 140.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
1) Buy three March Canadian Dollar 84.00 calls and then sell 1 March Canadian 81 call for a net cost of 140 or less. Use an objective of 86.50 basis the futures and risk the combination to a net loss of 80 points.
2) Buy the December Dollar 84 puts for 99, with an objective of 210. Risk to a close below 30.

PREVIOUS RECOMMENDATIONS:
1) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures 93.16 *hit second objective of 92.80. Hold the calls for a futures move above 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC): The market made a new contract high on the rally. The daily stochastics gave a bearish indicator with a crossover down. Momentum studies trending lower from overbought levels is a bearish indicator and would tend to reinforce lower price action. A positive signal for trend short-term was given on a closeover the 9-bar moving average. The daily closing price reversal down puts the market on the defensive. It is a slightly negative indicator that the close was under the swing pivot. The next downside target is now at 85.51. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 87.65 and 88.93, while 1st support hits today at 85.95 and below there at 85.51.

EURO (DEC): Daily momentum studies are on the rise from low levels and should accelerate a move higher on a push through the 1st swing resistance. A negative signal for trend short-term was given on a close under the 9-bar moving average. The close over the pivot swing is a somewhat positive setup. The next upside target is 127.31. The 9-day RSI under 20 suggests the market is extremely oversold. The next area of resistance is around 126.78 and 127.31, while 1st support hits today at 125.14 and below there at 124.02.

JAPANESE YEN (DEC): A bearish signal was triggered on a crossover down in the daily stochastics. Daily stochastics turning lower from over bought levels is bearish and will tend to reinforce a downside breake specially if near term support is penetrated. The market's close above the 9-day moving average suggests the short-term trend remains positive. The gap lower price action on the day session chart is a bearish indicator fortrend. The defensive setup, with the close under the 2nd swing support, could cause some early weakness. The next downside target is 101.32. The next area of resistance is around 103.58 and 104.87, while 1st support hits today at 101.81 and below there at 101.32.

SWISS (DEC): Daily stochastics are showing positive momentum from oversold levels, which should reinforce a move higher if near term resistance is taken out. A negative signal for trend short-term was given on a close under the 9-bar moving average. The market's close below the pivot swing number is a mildly negative setup. The next upside target is 86.81. The next area of resistance is around 86.57 and 86.81, while 1st support hits today at 86.13 and below there at 85.92.

28-Oct 2008

2008-10-29T02:09:00.002+01:00

CURRENCIES COMMENTARY

Temporary back and fill action not a shift in the trend

Upcoming International Reports
10/28 France Consumer Confidence
10/28 France Housing Starts
10/28 Japan Industrial Production
10/30 France Employment Situation
10/30 France Producer Price Index
10/30 German Employment Situation
10/30 Euro-zone Business and Consumer Survey
10/30 Canadian Industrial Product and Raw Materials
10/30 Canadian Producer Price Index
10/30 Japan Manufacturing PMI
10/30 Japan Consumer Price Index
10/30 Japan Household Spending
10/30 Japan Unemployment Rate
10/31 Euro-zone Unemployment Rate
10/31 Swiss KOF Leading Indicator
10/31 UK Consumer Confidence (GfK)
10/31 Canadian GDP (By Industry)
11/03 Swiss PMI
11/03 German Manufacturing PMI
11/03 Euro-Zone RBS\NTC Research Manufacturing PMI
11/03 Euro-Zone RBS\NTC Research Services PMI
11/03 UK CIPS/NTC Research Manufacturing PMI

DOLLAR: Apparently some of the flight to quality psychology has been tamped down for the time being as the US Dollar is seeing some profit taking in the wake of gains in international equity markets overnight. With the Dollar clearly reaching an excessive overbought technical condition on the charts recently and the extreme fear and anxiety over the global credit crisis potentially set to take at least a temporary break, it would not be surprising to see the Dollar weaker for 24 to 36 hours. As we suggested yesterday, the prospect of intervention against the Yen, the prospect of US rate cuts and some flight to quality migration toward the Swiss, all seemed to hint at atemporary pause in the somewhat historical Dollar run up. While the trade generally expects the US Fed to cut interest rates by 50 basis points there are some traders anticipating a 75 basis point cut and that type of move would probably temporarily serve to undermine the Dollar. It is also possible that a sweep of weak US data this morning could rekindle some concern toward the US economy again, and that in turn could facilitate the profit taking in the Dollar in the morning action today. Near term downside corrective action is seen at 87.61 today.

EURO: A pattern of lower highs in the Euro and interest in other currency market developments means the Euro will probably not get the brunt of the technical short covering interest in the coming two trading sessions. In fact,with evidence of slowing seen overnight from the French Consumer confidence readings, we suspect that theEuro will only forge a fleeting bounce today. With the US poised to cut interest rates and the BOE recently hinting at the prospect of rate cuts, one really gets the sense that the ECB is falling even further behind the curve andthat could mean that slowing in the euro zone will continue to worsen and that the Euro zone will probably be thelast to recover in the event that overall global conditions show signs of stabilizing.

YEN: Apparently the Yen was historically over wound on the upside and the threat of intervention and a tempering of the flight to quality angle seems to have prompted a backlash on the charts overnight. In fact, with the Nikkei joining the short covering pulse overnight, the flight to quality status of the Yen is at least temporarily reversed and given the historical rate of climb in the Yen recently traders should expect a rather violent corrective balancing on the charts over the coming two trading sessions. Near term corrective targeting in the December Yen is seen at 104.66 and unless the market returns to that level in the wake of the US data this morning, it is possible that the yen will hang up in a 104.66 to 105.95 range for the coming 36 hours of trade before a major trend decision is made Wednesday afternoon.

SWISS: The action in the Swiss today will be very telling, as the Swiss recently drifted into a flight to quality mode and a temporary abatement in high anxiety could have a noted impact on the currency. Clearly the December Swiss is capable of a quick slide back to quasi consolidation support on the charts around 85.61 especially ifglobal equity markets forge impressive two day gains into the US rate cut window on Wednesday afternoon asthat could mean that the Swiss falls to even lower support of 85.50.

POUND: Certainly the Pound is excessively oversold, especially given the compacted decline of the last two weeks and therefore a knee jerk bounce in the currency is possible. However, given the lackluster initial action inthe Pound today the currency isn't giving off the impression of a currency expected to come back into full favor.Therefore, we see a muted bounce to only 158.54 basis the December Pound contract. Apparently the promise of coordinated rate cuts from the UK's Brown has failed to stir optimism toward the Pound.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures 93.16 *hit second objective of 92.80. Hold the calls for a futures move above 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) : The market rallied to a new contract high. Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The market's short-term trend ispositive on the close above the 9-day moving average. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next upside objective is 89.28. The market is becoming some what over bought now that the RSI is over 70. The next area of resistance is around 88.57 and 89.28, while 1st support hits today at 86.91 and below there at 85.94.

EURO (DEC): The sell-off took the market to a new contract low. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are rising from oversold levels, which is bullishand should support higher prices. The market's close below the 9-day moving average is an indication the short term trend remains negative. It is a slightly negative indicator that the close was lower than the pivot swing number. The near-term upside objective is at 126.90. Selling may soon dry up since the RSI is under 20 indicating the market is extremely oversold. The next area of resistance is around 126.14 and 126.90, while 1st support hitstoday at 124.28 and below there at 123.19.

JAPANESE YEN (DEC): The market made a new contract high on the rally. Momentum studies are trending higher but have entered overbought levels. The market's short-term trend is positive on the close abovethe 9-day moving average. The gap up move on the day session chart is a bullish indicator for trend. The market has a bullish tilt coming into today's trade with the close above the 2nd swing resistance. The next upside target is 106.90. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 106.90 and 106.90, while 1st support hits today at 106.90 and below there at 106.90.

SWISS (DEC): The crossover up in the daily stochastics is a bullish signal. Rising from oversold levels, daily momentum studies would support higher prices, especially on a close above resistance. The close below the 9-day moving average is a negative short-term indicator for trend. A positive setup occurred with the close over the 1st swing resistance. The next upside objective is 87.31. The next area of resistance is around 86.94 and 87.31, while 1st support hits today at 86.22 and below there at 85.88.

27-Oct 2008

2008-10-28T03:52:00.002+01:00

CURRENCIES COMMENTARY

Expect the Swiss to be the best bull play this week

Upcoming International Reports
10/27 German IFO Business Climate Index
10/27 Japan Retail Sales 10/28 France Consumer Confidence
10/28 France Housing Starts 10/28 Japan Industrial Production
10/30 France Employment Situation 10/30 France Producer Price Index
10/30 German Employment Situation 10/30 Euro-zone Business and Consumer Survey
10/30 Canadian Industrial Product and Raw Materials
10/30 Japan Manufacturing PMI 10/30 Japan Consumer Price Index
10/30 Japan Household Spending 10/30 Japan Unemployment Rate
10/31 Euro-zone Unemployment Rate
10/31 Swiss KOF Leading Indicator
10/31 UK Consumer Confidence (GfK)
10/31 Canadian GDP (By Industry)
11/03 Swiss PMI
11/03 German Manufacturing PMI
11/03 Euro-Zone RBS\NTC Research Manufacturing PMI
11/03 Euro-Zone RBS\NTC Research Services PMI
11/03 UK CIPS/NTC Research Manufacturing PMI

DOLLAR: While the uptrend in the Dollar is firmly entrenched, we see several developments that could begin to slow the rate of climb in the Dollar in the coming week. First of all, it seems that the Swiss has begun to garner some flight to quality interest over the last two trading sessions and that would seem to break the flight to quality monopoly recently held by the Dollar and the Yen. Furthermore, the G7 has threatened to slow the climb in the Yen and that could also indirectly provide some lift to a host of currency that have recently been under aggressive selling pressure because of the Dollar rise. Another development that could serve to slow the near term rise in theDollar, is the anticipation that the US will cut interest rates later this week. In the near term, we doubt that the Dollar rise will halt until the December Dollar reaches up to the weekly highs posted back in late 2005 just under the 92.50 level. However, the October 21st Commitment of Traders with Options report for US Dollar showed the Non-commercial position to be net long 26,571 contracts, with the Non-reportable position net long 1,565contracts and that made the "combined" spec and fund position net long 28,136 contracts as of early last week.With the Dollar forging an additional 350 point rally in the wake of the COT report mark off, we suspect that the Dollar is already within close proximity of its record spec long positioning of 35,820 contracts that was posted back on September 16th of this year. The Dollar is overbought but apparently near term momentum is going toleave the bull camp with the edge today.

EURO: Turning to the weekly charts in the Euro it would appear that the Euro is headed down to the next key support area down at 125.00 and with a failure there, the market could even be headed to the 120 level. In my opinion, the euro zone is waiting too long to stimulate with lower interest rates, but perhaps the Euro zone Ministers are happy to see the euro decline, as that could eventually provide a lift to their economy through the export venue. With the German Ifo readings overnight highlighting the "expectation" of significant slowing ahead,it would appear that even more damage to the Euro zone economy will be expected before the ECB acts. The October 21st Commitment of Traders with Options report for Euro showed the Non-commercial position to be netshort 33,785 contracts, with the Non-reportable position net short 2,949 contracts and that made the "combined"spec and fund position net short 36,734 contracts as of early last week. However, the Euro fell an additional 7 points below the level where the COT report was measured and that had to pump up the net short reading. There cord net short reading in the Euro was 46,370 contracts from September 18th of this year and therefore onecould suggest that the euro is already within the vicinity of its record short positioning. For now, we doubt that technical considerations will be able to arrest the slide in the Euro.

YEN: With the latest upward explosion in the yen, the currency has apparently sparked a warning from the G7 but even that doesn't seem to be capable of turning off a mad rush toward the Yen. Apparently the market thinks that the 110 level is some form of intervention line in the sand and that argument was given some credence by the failure to hold above that level late last week. Like the Dollar, we doubt that the trade will be able to stop the rallyin the Yen easily but we would suggest that the rate of climb in the Yen since the August low has now put the currency in a historically overbought condition.

SWISS: Apparently concerns of something worse than a deep global recession are beginning to surface astraders are finally turning to the Swiss as perhaps the ultimate flight to quality currency! With the Swiss failure from 101.25 early in the year, to a recent low of 85.25, the Swiss is certainly cheap and deserves to be considered an alternative flight to quality instrument. However, since the Swiss is technically still in a down trend pattern, traders should consider the purchase of December just out of the money call options instead of Swiss futures.

POUND: While the UK's Brown floated the idea of coordinated interest rate cuts ahead, the Pound still looks tore main pinned down on the charts, with the next chart support level not found until the 150 level on the monthly charts. Reports of ongoing sharp house price declines in the UK suggests that the UK economic outlook continues to deteriorate and that could leave the Pound on a track to eventually test the 2000 through 2002 consolidation low zone all the way down at 140!

CANADIAN DOLLAR: Until the outlook for the global economy improves and/or the sharp declines in key Canadian commodity prices slow, the Canadian would seem to be a primary deflationary instrument. In short, afurther and perhaps more serious downgrade of the global economy ahead, could simply rocket the Canadian toward the next major chart consolidation zone down at 74.20 on the monthly charts.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS: 1) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures 93.16 *hit second objective of 92.80. Hold the calls for a futures move above 98.00.

CURRENCIES TECHNICAL OUTLOOK: Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) : The market rallied to a new contract high. Momentum studies are trending higher but have entered over bought levels. The market's short-term trend is positive on the close above the 9-day moving average. Market positioning is positive with the close over the 1st swing resistance. The near-term upside objective is at 88.88. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 88.14 and 88.88, while 1st support hits today at 86.11 and below there at 84.82.

EURO (DEC): The sell-off took the market to a new contract low. The daily stochastics gave a bearish indicator with a crossover down. Daily stochastics declining into oversold territory suggest the selling may bedrying up soon. The market's close below the 9-day moving average is an indication the short-term trend remains negative. There could be some early pressure today given the market's negative setup with the close below the 2nd swing support. The next downside target is 124.50. More downside action may be limited by the RSI under20 putting the market in extremely oversold territory. The next area of resistance is around 126.94 and 128.09,while 1st support hits today at 125.14 and below there at 124.50.

JAPANESE YEN (DEC) : A new contract high was made on the rally. Momentum studies are trending higher but have entered overbought levels. The close above the 9-day moving average is a positive short-term indicator for trend. Follow through buying looks likely if the market can hold yesterday's gap on the day session chart. The market's close above the 2nd swing resistance number is a bullish indication. The near-term upside target is at 106.24. The market is approaching overbought levels with an RSI over 70. The next area of resistanceis around 106.24 and 106.24, while 1st support hits today at 106.24 and below there at 106.24.

SWISS (DEC) : Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The market's close below the 9-day moving average is an indication the short-term trend remains negative.The daily closing price reversal down is a negative indicator for prices. The swing indicator gave a moderately negative reading with the close below the 1st support number. The next downside objective is now at 84.81. The9-day RSI under 30 indicates the market is approaching oversold levels. The next area of resistance is around 86.55 and 87.50, while 1st support hits today at 85.21 and below there at 84.81.

24-Oct 2008

2008-10-25T18:48:00.002+02:00

CURRENCIES COMMENTARY

Expect the Dollar and Yen to go into a explosive rally mode

Upcoming International Reports (all times CT)

10/27 German IFO Business Climate Index 3:00 AM
10/27 Japan Retail Sales 6:50 PM
10/28 France Consumer Confidence 1:45 AM
10/28 France Housing Starts 1:45 AM
10/28 Japan Industrial Production 6:50 PM

DOLLAR: The world is preparing to roll up its sidewalks in the face of the fear of significant and sustained slowing fears ahead. While some might be incredulous with the sharp rise in the US Dollar, the fact that the financial crisis has now spread everywhere, it has become clear that anxiety is so severe that money is truly seeing the US Dollar as one of the few flight to quality destinations. In fact, with the Chinese president overnight labeling the global outlook as grim, it would seem like some world leaders are serving to excite the herd, instead of calming the herd. While it might not physically make a difference in the near term, the trade could also be recognizing that the US (the world's largest oil consumer) has its oil priced in Dollars and therefore the US is seeing the biggest or quickest benefit off sharply declining oil prices. While local US gas stations are begrudgingly lowering their prices, the type of break that has already taken place would ultimately result in at least a $700 million Dollar per day reduction in the amount of money spent on gasoline in the US! In the near term, classic macro economic influences will probably take a back seat to extreme anxiety and extreme flight to quality reactions. Next upside targeting in the Dollar on the monthly chart is seen up at 88.00 and then again up at 88.55.

EURO: While the Euro might see some fleeting technical support at the 125 level this morning, there would not seem to be a near term change of trend in the offing. In fact, with as many as 7 banks soliciting funds from the EU, we doubt that the Euro will see support off the mid 2006 consolidation lows around the 125.00 level. A failure below the 125 level could leave the next downside target in the euro off the monthly charts at the 120.00 level which is the level that the Euro traded at in early 2006.

YEN: The Yen is getting a full on influx of flight to capital flow and the currency is also seeing residual unwinding of stubborn carry trade positions. In order to find the next resistance zone for the Yen, one has to look to the monthly charts and to the 110.00 level. Traders should brace for an extremely violent trade ahead and perhaps a quick spike up to the 1995 highs up around the 125.00 level!

SWISS: In the face of what seems to be the biggest financial crisis of the last 100 years, the Swiss continues to free fall and that clearly suggests that the Swiss is not being seen as any type of safe haven. Next downside targeting on the charts is seen at 84.68 off the monthly charts.

POUND: It almost seems to be a waste of time to suggest that weak scheduled data from the UK overnight was of that much concern to the trade, as the Pound is streaking lower in the face of fears that the global economic crisis is set to at least temporarily get out of hand. While the Pound has encountered some monthly chart support at 160, there is little to suggest that the downtrend will be able to come to halt anytime soon. The next lower support level off the monthly charts in the Pound is seen at 157.70.

CANADIAN DOLLAR: Like the rest of the currencies, the Canadian is falling off a combination of flight to quality interest into the Dollar and perhaps because traders continue to downgrade the Canadian because of its reliance on global exports. The next downside point on the charts is seen at 75.00 especially if the currency fails to hold up at 74.88.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long 2 November Yen 96.50 puts at 94 and long the December Yen futures at roughly 98.80. *Hit an objective of 99.88 on the December futures. Hit risk on the long puts at 30.
2) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures 93.16 *hit second objective of 92.80. Hold the calls for a futures move above 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 10/24/2008: The market rallied to a new contract high. The daily stochastics gave a bearish indicator with a crossover down. Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. A positive signal for trend short-term was given on a close over the 9-bar moving average. The daily closing price reversal down puts the market on the defensive. It is a slightly negative indicator that the close was under the swing pivot. The next downside objective is 84.50. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around 86.05 and 86.90, while 1st support hits today at 84.85 and below there at 84.50.

EURO (DEC) 10/24/2008: The market was pushed to a new contract low. The daily stochastics have crossed over up which is a bullish indication. Daily momentum studies are on the rise from low levels and should accelerate a move higher on a push through the 1st swing resistance. A negative signal for trend short-term was given on a close under the 9-bar moving average. It is a slightly negative indicator that the close was under the swing pivot. The next upside target is 129.72. With a reading under 20, the 9-day RSI indicates the market is extremely oversold. The next area of resistance is around 129.10 and 129.72, while 1st support hits today at 127.56 and below there at 126.63.

JAPANESE YEN (DEC) 10/24/2008: Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. A positive signal for trend short-term was given on a close over the 9-bar moving average. The gap upmove on the day session chart is a bullish indicator for trend. Since the close was above the 2nd swing resistance number, the market's posture is bullish and could see more upside follow-through early in the session. The next upside objective is 105.94. The 9-day RSI over 70 indicates the market is approaching
overbought levels. The next area of resistance is around 105.38 and 105.94, while 1st support hits today at 103.53 and below there at 102.23.

SWISS (DEC) 10/24/2008: Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The close below the 9-day moving average is a negative short-term indicator for trend. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside objective is now at 85.50. The 9-day RSI under 30 indicates the market is approaching oversold levels. The next area of resistance is around 86.70 and 86.90, while 1st support hits today at 86.00 and below there at 85.50.

23-Oct 2008

2008-10-24T02:06:00.003+02:00

CURRENCIES COMMENTARY

The Dollar and Yen retain a leadership role

Upcoming International Reports (all times CT)
10/23 France Business Survey 1:45 AM
10/23 Euro-zone Balance of Payments 3:00 AM
10/23 UK Retail Sales 3:30 AM
10/23 Euro-zone Industrial New Orders 4:00 AM
10/24 UK GDP 3:30 AM
10/24 Canadian Consumer Price Index 6:00 AM
10/27 German IFO Business Climate Index 3:00 AM
10/27 Japan Retail Sales 6:50 PM
10/28 France Consumer Confidence 1:45 AM
10/28 France Housing Starts 1:45 AM
10/28 Japan Industrial Production 6:50 PM

DOLLAR: Despite seeing the Dollar defy fundamental logic and produce an almost unbelievable three day explosion, the Greenback remains within close proximity to its new highs. The rally in the Dollar has the same feel as the Treasury market, which seems to be operating on some nonsensical set of rules. However, with the markets apparently seeing concerns that the credit crisis is beginning to impact emerging markets, we can understand the flight to Dollars. In other words, the crisis inside the US is really big and complicated, but at least the US has the mechanisms to attempt to handle the crisis. It is also possible that the sharp declines in oil prices is indirectly fueling the Dollar upward, as a large portion of the world's oil is priced in Dollars and seeing the Dollar strengthen, in a way cushions some oil producers against the slide in revenues. In fact, the relationship between the Dollar and oil prices over the last two years has become quite prolific and we can't rule out ongoing Dollar support from even more severe declines in oil prices. If one really takes a leap of faith, the very sharp slide in oil prices and the sharp run up in the US Dollar could actually mean that the US is "relatively" getting the biggest economic bang out of the slide in oil (with the exception of the Japanese who have also seen their currency rise). Therefore, there is a sketchy fundamental angle that supports the Dollar off the slide in oil prices. Personally we think the Dollar only manages to streak to an even higher level, in the event that the global equity markets fall to an even lower level in the coming two trading sessions.

EURO: The Euro remains on the ropes and we suspect that more declines are ahead for the currency. Apparently the market is unwilling to see the Euro zone as a potential safe haven and instead the trade continues to downgrade the ECB's capacity to handle the crisis or the ensuing slowing. While the market doesn't seem to be that interested in the regularly scheduled macro economic news, the news from the Euro zone overnight would still seem to favor the bear camp in the Euro. In fact, a French business survey declined sharply for the month of October, while a French Household consumption reading was also weak. We would suggest that traders consider the purchase of November just out of the money Euro puts on any minor near term bounce in the currency.

YEN: With global financial anxiety remaining very high and global equity markets sitting just above extremely critical chart points, we suspect that flight to quality buying interest is going to remain in place for the yen in the coming two trading sessions. In fact, we get the sense that some type of major decision point is upon the markets and that global equity markets are poised to at least retest the lows and the failure to hold those lows, could shift the Yen into overdrive on the upside. However, we also had the sense before the debacle slide in the stock market on Wednesday that the short rate markets were beginning to thaw and therefore the risk to longs in the yen at current levels is very extreme. Be long the Yen, but consider put coverage or a short call/long put fence as protection.

SWISS: The trend in the Swiss is still down but with equity markets seemingly drifting back toward a panic zone on the charts, those that are short the Swiss should give some consideration to the potential for a sharp rebound. While we seriously doubt that things are going to get out of hand, another panic might mean the Swiss finally gets some flight to quality buying, especially with gold falling, the US condition still highly suspect and US Treasuries acting unnatural.

POUND: While the Pound is certainly extremely oversold, it isn't clear whether the markets have any interest in technicals in the face of the extreme fundamental analysis and fear that is operating in the market place. In fact, with the MPC this morning expressing concern over ongoing inflation threats in the morning press, one gets the sense that the UK policy makers and the Pound remain caught between a rock and a hard place. As in other comments this morning, expect the down trend to continue, but it might be beneficial to hedge short side positions with a short out of the money put and a long call, as that still leaves one short.

CANADIAN DOLLAR: With the gold market seemingly into a sever deflationary washout and the outlook for the world economy apparently worsening this week, there would seem to be little reason to think that the Canadian was poised to make a major reversal of trend. In fact, in the face of fresh news lows in global equity markets over the coming two trading sessions, the Canadian probably falls to the lowest level in since 2004.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long 2 November Yen 96.50 puts at 94 and long the December Yen futures at roughly 98.80. *Hit an objective of 99.88 on the December futures. Risk the call position to a close below 30 in the long puts.
2) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures 93.16 *hit second objective of 92.80. Hold the calls for a futures move above 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 10/23/2008: The market rallied to a new contract high. Rising stochastics at overbought levels warrant some caution for bulls. The close above the 9-day moving average is a positive short-term indicator for trend. The gap upmove on the day session chart is a bullish indicator for trend. With the close over the 1st swing resistance number, the market is in a moderately positive position. The next upside target is 87.15. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around 86.51 and 87.15, while 1st support hits today at 85.10 and below there at 84.34.

EURO (DEC) 10/23/2008: The sell-off took the market to a new contract low. Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The close below the 9-day moving average is a negative short-term indicator for trend. More selling pressure is likely given yesterday's gap lower price action on the day session chart. The defensive setup, with the close under the 2nd swing support, could cause some early weakness. The next downside objective is 127.52. The 9-day RSI under 20 suggests the market is extremely oversold. The next area of resistance is around 129.03 and 129.51, while 1st support hits today at 128.03 and below there at 127.52.

JAPANESE YEN (DEC) 10/23/2008: A bullish signal was given with an upside crossover of the daily stochastics. Momentum studies are trending higher but have entered overbought levels. The market's close above the 9-day moving average suggests the short-term trend remains positive. Follow through buying looks likely if the market can hold yesterday's gap on the day session chart. The market's close above the 2nd swing resistance number is a bullish indication. The next upside objective is 102.55. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 102.54 and 102.55, while 1st support hits today at 102.48 and below there at 102.44.

SWISS (DEC) 10/23/2008: Momentum studies are declining, but have fallen to oversold levels. A negative signal for trend short-term was given on a close under the 9-bar moving average. The gap lower price action on the day session chart is a bearish indicator for trend. The market setup is somewhat negative with the close under the 1st swing support. The next downside objective is 85.39. With a reading under 30, the 9-day RSI is approaching oversold levels. The next area of resistance is around 86.78 and 86.99, while 1st support hits today at 85.98 and below there at 85.39.

22-Oct 2008

2008-10-23T02:43:00.003+02:00

CURRENCIES COMMENTARY

Expect the Dollar and the Yen to remain the dominant currencies

Upcoming International Reports (all times CT)
10/22 Canadian Leading Indicators 7:30 AM
10/22 Canadian Retail Trade 7:30 AM
10/22 Japan Trade Balance 6:50 PM
10/23 France Business Survey 1:45 AM
10/23 Euro-zone Balance of Payments 3:00 AM
10/23 UK Retail Sales 3:30 AM
10/23 Euro-zone Industrial New Orders 4:00 AM
10/24 UK GDP 3:30 AM
10/24 Canadian Consumer Price Index 6:00 AM
10/27 German IFO Business Climate Index 3:00 AM
10/27 Japan Retail Sales 6:50 PM

DOLLAR: For the time being, the US Dollar remains king. However, it would not appear that the majority of the gains the Dollar are simply attributable to intervention by foreign central banks. In other words, talk of severe slowing outside of US, hope for an aggressive US stimulus package and other aggressive US maneuvering appears to leave the Dollar in a relatively stronger position than most other currencies. While the breakneck gains in the US Dollar Index this week, put the greenback in an extreme short-term overbought positioning, it would appear that the trade is content to leave the Dollar in favor. However the failure to hold above the gap area at 84.97 in the December Dollar index could be seen as a key technical failure in the trade today. While the US doesn't have any scheduled data due out on its economy today, an ongoing flow of US corporate earnings news should not be discounted. Unless the US equity market comes under tremendous selling pressure today, we suspect the December dollar index will find support at 85.10 and that it will continue to maintain a generally positive track on the charts.

EURO: With another big range down extension in the euro overnight, the downtrend pattern in the Euro appears to be firmly entrenched. Adding into the down side tilt in the Euro are concerns that the ECB is falling behind the rate cut curve and that failure to act aggressively will ultimately leave the euro zone mired in a slowdown longer than other areas. While the lingering financial sector problems of the euro zone are also adding to the downside in the currency, it is possible that the lack of aggressive monetary policy action is simply serving to accelerate the December Euro's slide down to weekly consolidation support at 125.00.

YEN: Apparently the Yen is poised to regain upside momentum at the expense of weakness in the Pound and Euro. In fact, given the big range up thrust this morning in the Yen it would appear that the December Yen contract is poised to take out the October highs before the end of the week. In fact, in the face of any minor weakness in the US Dollar directly ahead, the Yen might end up being the sole bullish benefactor among the actively traded currencies.

SWISS: Apparently persistent global de-leveraging and severe global deflation is being seen as a definitive negative for the Swiss. It is also possible that a slight tempering of financial sector concerns and an increase in classic slowing fears has prompted outright fresh selling of the Swiss. The next downside target on the Swiss would seem to come in at 85.00 on the weekly charts.

POUND: With the Bank of England overnight projecting the first UK recession in 16 years and the MPC clearly in a position to reduce US interest rates even further, it is not surprising to see the British Pound falling to fresh new lows this morning. With the British Pound failing to hold at critical support levels off the 2005 lows, the next logical downside targeting comes in at a somewhat startling 1.65 level. In fact, the severity of the UK slowing threat was highlighted by MPC Minutes that showed one member wanted a 100 basis point cut in the November meeting.

CANADIAN DOLLAR: With a massive range down extension in the Canadian Dollar decimating the technical structure in the currency and severe ongoing weakness in metals and energy prices, a number of classic fundamentals leave the Canadian Dollar in a downdraft posture. In fact, the Canadian Dollar would appear to be headed to the next consolidation support zone of 79.27 on the charts and it could be difficult to halt the slide in the Canadian in the face of ongoing expectations of a severe global recession.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long 2 November Yen 96.50 puts at 94 and long the December Yen futures at roughly 98.80. *Hit an objective of 99.88 on the December futures. Risk the call position to a close below 30 in the long puts.
2) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures 93.16 *hit second objective of 92.80. Hold the calls for a futures move above 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 10/22/2008: The rally brought the market to a new contract high. Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The close above the 9-day moving average is a positive short-term indicator for trend. Market positioning is positive with the close over the 1st swing resistance. The near-term upside target is at 86.00. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around 85.56 and 86.00, while 1st support hits today at 84.01 and below there at 82.90.

EURO (DEC) 10/22/2008: The market made a new contract low on the break. Momentum studies are declining, but have fallen to oversold levels. The market's close below the 9-day moving average is an indication the shortterm trend remains negative. The gap lower on the day session chart is bearish and puts the market on the defensive. There could be some early pressure today given the market's negative setup with the close below the 2nd swing support. The next downside target is 129.88. The market is approaching oversold levels on an RSI reading under 30. The next area of resistance is around 131.83 and 132.65, while 1st support hits today at 130.45 and below there at 129.88.

JAPANESE YEN (DEC) 10/22/2008: Declining momentum studies in the neutral zone will tend to reinforce lower price action. The market's short-term trend is positive on the close above the 9-day moving average. Follow through buying looks likely if the market can hold yesterday's gap on the day session chart. There could be more upside follow through since the market closed above the 2nd swing resistance. The next downside target is now at 99.21. The next area of resistance is around 99.83 and 99.92, while 1st support hits today at 99.48 and below there at 99.21.

SWISS (DEC) 10/22/2008: Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The outside day up is a positive signal. Market positioning is positive with the close over the 1st swing resistance. The next downside target is 86.36. The next area of resistance is around 87.33 and 87.48, while 1st support hits today at 86.78 and below there at 86.36.

21-Oct 2008

2008-10-22T02:43:00.002+02:00

CURRENCIES COMMENTARY

On going Dollar edge due to proactive US management

Upcoming International Reports (all times CT)
10/21 Swiss Trade Balance 1:15 AM
10/21 Canadian Monetary Policy 8:00 AM
10/22 Canadian Leading Indicators 7:30 AM
10/22 Canadian Retail Trade 7:30 AM
10/22 Japan Trade Balance 6:50 PM
10/23 France Business Survey 1:45 AM
10/23 Euro-zone Balance of Payments 3:00 AM
10/23 UK Retail Sales 3:30 AM
10/23 Euro-zone Industrial New Orders 4:00 AM
10/24 UK GDP 3:30 AM
10/24 Canadian Consumer Price Index 6:00 AM
10/27 German IFO Business Climate Index 3:00 AM
10/27 Japan Retail Sales 6:50 PM

DOLLAR: Apparently the market viewed the US Fed Chairman's support for another fiscal stimulus package as a positive for the US Dollar, as the US Dollar managed another new high for the move in the wake of the Fed leader's comments yesterday. With the French overnight injecting capital into key banks and interbank lending activity at least tracking back toward a more normal environment, that seems to have left the US Dollar with an edge. In fact, seeing financial sector conditions leaning toward normal and seeing the US tossing around the prospects of another US stimulus program suggests that the US could end up weathering the crisis somewhat better than other areas. A good example of the markets view, that the US is better equipped to handle slowing is seen in the French Presidents comments overnight that suggest the Euro zone structure doesn't allow for top leaders to tightly coordinate policy. In short, the world is anticipating significant slowing ahead, but the currency trade is clearly willing to bet that the US will at least attempt to head off the slowing faster than other areas. With the break in the Dollar to 82.00 level clearly rejected that would seem to give the bull camp the technical capacity to push the Dollar to an even higher trading range ahead.

EURO: A big range down extension in the Euro is clearly justified by news that France had to inject capital into some key banks overnight. As suggested in the Dollar coverage this morning, the trade is also concerned that the Euro zone political structure doesn't seem to be nimble enough to quickly respond to the classic slowing threat that looks to be left in the wake of the severe financial sector disruption. In order to arrive at some near term downside targeting in the Euro, one has to turn to the weekly charts and the next significant consolidation zone down around the 131.13 level.

YEN: Surprisingly the Yen seems to have rejected a slide to the 98.00 level again in the overnight action. Perhaps the AIG/Lehman CDS payout has the Yen in a firm bid posture this morning as some traders obviously think that the event could foster another significant financial sector situation. Apparently some traders think that some hedge funds and or insurance companies might not have raised enough cash to settle obligations on Lehman and that could certainly ignite the Yen for another quick run up to the October highs. However, a number of analyst think that the deadline will pass and those injured by the settlement won't necessarily reveal the impact until their next earnings reports are released and therefore the settlement date could pass without a major anxiety event and that could leave the Yen vulnerable, especially if the December yen manages a bounce this morning up to 99.50.

SWISS: The Swiss didn't really seem to be a flight to quality instrument in the face of some of the highest anxiety of the last century and therefore the Swiss doesn't appear to be poised to get any fresh speculative interest into the unwinding of the AIG/Lehman CDS obligations. With the US talking up a secondary stimulus program and the short end of the credit markets seemingly thawing, the path of least resistance in the Swiss looks to remain down. The next significant downside consolidation zone in the December Swiss is seen at 86.41.

POUND: While the US is expected to see just as much slowing evidence as the UK, the Pound apparently is interested in factoring in even more significant slowing in the UK economy ahead In fact, the market is expecting a slide in UK factory orders data for the month of October and that news is expected to keep the Pound under pressure and potentially on a track to retest the October lows in the coming trading sessions.

CANADIAN DOLLAR: With the Dollar remaining very strong and the global economic outlook deteriorating, it is not surprising to see the Canadian Dollar remain in a downward posture on the charts. In fact, with Canadian wholesale trade falling by more than expected and the BOC expected to trim interest rates, it would seem like the bear camp is set to retain the edge today. While some might suggest that a rebound in some commodity prices like oil will lend some support to the Canadian, ongoing weakness in metals and grain prices clearly countervail any hope of commodity support for the Canadian Dollar. In the near term, the odds of another new low for the move look to be pretty high.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long 2 November Yen 96.50 puts at 94 and long the December Yen futures at roughly 98.80. Risk the combination to a net loss of $1,900. *Use an objective of 99.88 on the December futures.
2) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures 93.16 *hit second objective of 92.80. Hold the calls for a futures move above 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 10/21/2008: A new contract high was made on the rally. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The market's close above the 9-day moving average suggests the short-term trend remains positive. The outside day up is a positive signal. There could be more upside follow through since the market closed above the 2nd swing resistance. The near-term upside objective is at 84.77. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 84.26 and 84.77, while 1st support hits today at 82.62 and below there at 81.49.

EURO (DEC) 10/21/2008: The market broke to a new contract low. Momentum studies are declining, but have fallen to oversold levels. The market's short-term trend is negative as the close remains below the 9-day moving average. The defensive setup, with the close under the 2nd swing support, could cause some early weakness. The next downside objective is now at 131.96. The market is approaching oversold levels on an RSI reading under 30. The next area of resistance is around 133.68 and 134.49, while 1st support hits today at 132.42 and below there at 131.96.

JAPANESE YEN (DEC) 10/21/2008: Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The close below the 9-day moving average is a negative short-term indicator for trend. It is a slightly negative indicator that the close was lower than the pivot swing number. The next downside target is now at 98.47. The next area of resistance is around 98.61 and 98.71, while 1st support hits today at 98.50 and below there at 98.47.

SWISS (DEC) 10/21/2008: Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The close below the 9-day moving average is a negative short-term indicator for trend. The gap lower price action on the day session chart is a bearish indicator for trend. The defensive setup, with the close under the 2nd swing support, could cause some early weakness. The next downside objective is now at 86.94. The next area of resistance is around 87.05 and 87.07, while 1st support hits today at 86.99 and below there at 86.94.

20-Oct 2008

2008-10-20T15:40:00.002+02:00

CURRENCIES COMMENTARY

Minor Dollar weakness ahead as flight to quality temp wanes

Upcoming International Reports (all times CT)
10/20 German Producer Price Index 1:00 AM
10/20 Canadian Wholesale Trade 7:30 AM
10/21 Swiss Trade Balance 1:15 AM
10/21 Canadian Monetary Policy 8:00 AM
10/22 Canadian Leading Indicators 7:30 AM
10/22 Canadian Retail Trade 7:30 AM
10/22 Japan Trade Balance 6:50 PM
10/23 France Business Survey 1:45 AM
10/23 Euro-zone Balance of Payments 3:00 AM
10/23 UK Retail Sales 3:30 AM
10/23 Euro-zone Industrial New Orders 4:00 AM
10/24 UK GDP 3:30 AM
10/24 Canadian Consumer Price Index 6:00 AM
10/27 German IFO Business Climate Index 3:00 AM
10/27 Japan Retail Sales 6:50 PM

DOLLAR: Apparently seeing a host of international equity markets forging gains overnight has dented the US Dollar from a flight to quality perspective. Critical support in the Dollar is seen at 82.42 this morning, but it is possible that the Dollar will be at least temporarily undermined by the decline in the US Leading Indicators report this morning but recently the currency markets have not paid that much attention to the regularly scheduled US data flow. The October 14th Commitment of Traders with Options report for US Dollar showed the Noncommercial position to be net long 25,349 contracts, with the Non-reportable position net long 811 contracts and that made the "combined" spec and fund position net long 26,160 contracts as of early last week. On the other hand, with the US Dollar climbing another 2 points in the wake of the COT report mark off, we suspect that the magnitude of the net spec long positioning is understated into the opening today. Given a short period of financial sector calm, that could open up the door for a temporary corrective slide in the Dollar. Initial support levels into the opening this morning are pegged at 82.42, 82.31 and then again at 82.21.

EURO: While the Euro seems to have a slightly positive bias in the early going today, the market still looks somewhat range bound. In fact, if the market were poised for a distinct run up today, we suspect that the slightly hotter than expected German PPI report released overnight would have provided the Euro with the capacity to rise above close-in resistance of 135.12 in the December Euro contract. The October 14th Commitment of Traders with Options report for Euro showed the Non-commercial position to be net short 34,732 contracts, with the Non-reportable position also net short 6,577 contracts and that made the "combined" spec and fund position net short 41,309 contracts as of early last week. Furthermore, with the Euro falling almost 2 additional points in the wake of the COT report mark off early last week, we suspect that the net spec short positioning in the Euro was understated into the opening today and that could provide the Euro with the capacity to rise back into a range bound by 135.33 to 136.00.

YEN: With global equity markets showing initial strength today it would appear that anxiety is somewhat on the decline. Therefore, the Yen which has recently been seen as one of the primary flight to quality instruments, would seem to be destined to give some ground. Near term downside targeting is seen at 96.00 and then again down at the 97.54 level basis the December contract. In fact, as long as calm reigns in the stock market, one might assume that the path of least resistance in the Yen is pointing down.

SWISS: The Swiss remains in a vulnerable status on the charts with the 88.00 level potentially a critical pivot point today. However, given that the Swiss on Thursday was hammered sharply lower and ultimately rejected the 87.00 level, the Swiss appears to have already liquidated a good portion of the weak handed longs. In fact, unless the US stock market mounts a very strong rally this morning, we doubt that the December Swiss will fall below the 87.80 level.

POUND: The Pound is exhibiting a short covering action in the early going today and that appears to be the result of coordinated efforts to unfreeze the credit markets. In our opinion, the Pound needs to see the Libor market soften for the Pound to mount a quick run back up to the 177.50 level. However, given the magnitude of the oversold condition in the Pound around the recent October spike low, it would not be surprising for the Pound to make a run at the 50% retracement level off the September/October slide which is seen up at 177.04 in the action today.

CANADIAN DOLLAR: The Canadian Dollar is another currency that is extensively oversold and perhaps one currency that has factored in the most significant slowing of the global economy. While it might be premature to downplay the magnitude of the slowing expected in the global economy, it is possible that shorts in the Canadian will be uncomfortable in their positions today and that could allow for a temporary recovery bounce back above the 86.00 level on the charts.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long 2 November Yen 96.50 puts at 94 and long the December Yen futures at roughly 98.80. Risk the combination to a net loss of $1,900 and use an objective of either 94.50 on the downside or up at 104.50 on the upside in the December futures. Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures 93.16 *hit second objective of 92.80. Hold the calls for a futures move above 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 10/20/2008: The market's close above the 9-day moving average suggests the short-term trend remains positive. The market has a slightly positive tilt with the close over the swing pivot. More downside action may be limited by the RSI under 20 putting the market in extremely oversold territory. The next area of resistance is around 83.15 and 83.38, while 1st support hits today at 82.57 and below there at 82.20.

EURO (DEC) 10/20/2008: Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. A negative signal for trend short-term was given on a close under the 9-bar moving average. The market tilt is slightly negative with the close under the pivot. The next downside objective is 133.38. The next area of resistance is around 134.65 and 135.17, while 1st support hits today at 133.75 and below there at 133.38.

JAPANESE YEN (DEC) 10/20/2008: Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The market's short-term trend is negative as the close remains below the 9- day moving average. The close below the 2nd swing support number puts the market on the defensive. The next downside target is 97.88. The next area of resistance is around 99.35 and 100.07, while 1st support hits today at 98.25 and below there at 97.88.

SWISS (DEC) 10/20/2008: Momentum studies are declining, but have fallen to oversold levels. A negative signal for trend short-term was given on a close under the 9-bar moving average. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside objective is 87.87. The next area of resistance is around 88.59 and 88.87, while 1st support hits today at 88.09 and below there at 87.87.

18-Oct 2008

2008-10-17T17:58:00.002+02:00

CURRENCIES COMMENTARY

For some reason the Dollar remains in favor but we favor the Yen

Upcoming International Reports (all times CT)
10/17 Euro-zone Foreign Trade 4:00 AM
10/20 German Producer Price Index 1:00 AM
10/20 Canadian Wholesale Trade 7:30 AM
10/21 Swiss Trade Balance 1:15 AM
10/21 Canadian Monetary Policy 8:00 AM
10/22 Canadian Leading Indicators 7:30 AM
10/22 Canadian Retail Trade 7:30 AM
10/22 Japan Trade Balance 6:50 PM

DOLLAR: With US Treasuries clearly out of favor and seemingly set to fall even further out of favor, it is really surprising that the US Dollar continues to find favor. In fact, even if the Dollar is being seen as a flight to quality currency by the currency trade, it is somewhat surprising that the Dollar didn't setback in the face of suggestions from the EU's Almunia overnight that the worst of the global financial crisis was over. Clearly the market doesn't put that much stock in comments that the crisis is passing. Even more surprising is the fact that the Dollar remains strong in the face of overtly weak US data this week. In short, we suspect that the G7 or G20 is in some way responsible for the Dollar strength. Therefore, one apparently can't fight the up trend, but one can simply not participate in the uptrend. In fact, on another spurt up to the October highs in the US Dollar Index we would then consider some longer dated long puts, but in the near term, the Dollar seems to have more upside capacity.

EURO: Despite comments from the EU, that the worst of the global crisis is over, the trade apparently thinks that the situation in the Euro zone is set to deteriorate even further. In fact, one could suggest that evidence of more significant slowing is ahead for the Euro zone and with the Euro somewhat sitting at a rather extreme high level early in 2008, one shouldn't underestimate the amount of air that might have to come out of the Euro. The big question is, where will the money exiting the Euro go? Next downside targeting in the Euro is eventually seen down at 132.19 (off the weekly charts).

YEN: With doubt running toward the Dollar, weakness expected in the Euro and most other currencies generally out of favor, the Yen continues to be the primary flight to quality currency. In fact, with the setback in the yen early this week and the overnight dip in the Yen and that could allow for a long entry at a slightly more palatable price level. We suggest that traders get long the yen but protect that positioning with a double put position.

SWISS: The Swiss bulls have to be very disappointed in the action in the Swiss this week, especially with the action in the Swiss in the prior trading session! Apparently unless the global crisis spins totally out of control, the troubles inside Switzerland are apparently capable of offsetting periodic flight to quality buying interest in the Swiss. Expect another new low for the move in the Swiss directly ahead.

POUND: The Pound remains in a downward pattern on the charts and with the Wall Street Journal yesterday hinting at "cracks" in the UK financial bailout package, it is clear that the trade is set to remain bearish toward the Pound. In fact, in the face of more dismal US economic data today and or a sharp downside extension in US equity prices, it is possible that the December Pound will fall toward the 170 level again.

CANADIAN DOLLAR: More pain looks to be in store for the Canadian. In fact, with a host of physical commodities expected to remain in a downtrend, the US recession being extended far into the future and the US Dollar seemingly set to retain a flow of buying support, it would not be surprising to see the Canadian fall to new lows before the close today.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
Buy 2 November Yen 96.50 puts at 98 or better and then look to buy the December Yen futures at the market. Risk the combination to a net loss of $1,900 and use an objective of either 94.50 on the downside or up at 104.50 on the upside in the December futures.

PREVIOUS RECOMMENDATIONS:
1) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures 93.16 *hit second objective of 92.80. Hold the calls for a futures move above 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 10/17/2008: The daily stochastics gave a bullish indicator with a crossover up. Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market has a slightly positive tilt with the close over the swing pivot. The near-term upside target is at 83.53. The next area of resistance is around 83.18 and 83.53, while 1st support hits today at 82.40 and below there at 81.97.

EURO (DEC) 10/17/2008: The market broke to a new contract low. Daily stochastics are trending lower but have declined into oversold territory. The market's short-term trend is negative as the close remains below the 9-day moving average. The swing indicator gave a moderately negative reading with the close below the 1st support number. The next downside target is 132.88. The next area of resistance is around 135.01 and 135.88, while 1st support hits today at 133.51 and below there at 132.88.

JAPANESE YEN (DEC) 10/17/2008: Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. The market's short-term trend is negative as the close remains below the 9- day moving average. The downside closing price reversal on the daily chart is somewhat negative. The swing indicator gave a moderately negative reading with the close below the 1st support number. The next downside objective is now at 99.07. Daily studies pointing down suggests selling minor rallies. The next area of resistance is around 99.73 and 100.06, while 1st support hits today at 99.23 and below there at 99.07.

SWISS (DEC) 10/17/2008: Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The market's close below the 9-day moving average is an indication the shortterm trend remains negative. The market's close below the pivot swing number is a mildly negative setup. The next downside target is now at 87.73. The next area of resistance is around 88.38 and 88.76, while 1st support hits today at 87.87 and below there at 87.73.

17-Oct 2008

2008-10-16T16:06:00.002+02:00

CURRENCIES COMMENTARY

The $ retains a slight edge despite weak numbers directly ahead

Upcoming International Reports (all times CT)
10/17 Euro-zone Foreign Trade 4:00 AM
10/20 German Producer Price Index 1:00 AM
10/20 Canadian Wholesale Trade 7:30 AM
10/21 Swiss Trade Balance 1:15 AM
10/21 Canadian Monetary Policy 8:00 AM

DOLLAR: We continue to think that the Dollar is being supported by intervention or that the Dollar is being purchased in a potentially misguided flight to quality positioning. Ideas that the US has a better chance of recovering quicker from a global economic recession has supported the Dollar against the Euro and Pound. We suspect the dollar has also been able to seemingly discount the bearish news on the US economy on ideas that European interest rates have a lot farther to fall. But while the trend might be pointing up in the Dollar, the action in the US equity market and the US Treasury markets this week would seem to suggest that the Dollar could be setting up for a sharp fall in the coming trading sessions. While many currency traders have lumped the Dollar and the Yen together as primary flight to quality instruments, a severe meltdown in the US equity market and clear disdain for US Treasuries would seem to set the stage for a failure in confidence in the Dollar. However, given the potential for violent price action ahead, traders should attempt to utilize options and futures positions to control risk. A recovery bounce in US equity markets off of overnight lows has trimmed gains in the Dollar overnight. US equity markets will continue to have the biggest influence on Dollar and the Dollar likely has the potential to trade higher even in the face of weak economic reports today if the data triggers more price weakness in US equity markets.

EURO: The euro traded weaker overnight weighed down by concerns Europe could suffer a more severe economic recession than the US leaving the need for the ECB to aggressively cut rates in the months ahead. Certainly seeing lower readings on Euro-zone and German inflation data supports the view that easing price pressures will enable the ECB to cut rates sooner rather than later. Investors seem to have a low tolerance for risk and that is certainly a factor that has been undermining the Euro. But if US equity markets manage a strong recovery bounce this session the euro may manage a temporary move back above the 135 level given the oversold condition of the market. But the bleak outlook for the global economy leaves more downside than upside price risk in the euro and that suggests an eventual break to 130 can't be ruled out.

YEN: The Yen has gained overnight as weakness in global equity markets have provided safe haven support to the currency as investors continue to lower their risk tolerance. Unwinding of the carry trade continues to be a key factor supporting the Yen as tight credit conditions have investors needing to raise cash. A recovery bounce in US equity markets has trimmed overnight gains in the Yen. However, if the US economic data comes in patently weak, we suspect the Yen could retest overnight highs if the economic data causes US equities to take a big hit. Given the bearish outlook for global economic conditions we suspect a further lowering in investor risk tolerance has the potential to eventually lift the Dec Yen back towards the March high. Key support for the Dec Yen today is at 99.79 with resistance at 101.27.

SWISS: The Swiss franc has managed an impressive recovery off of the overnight lows despite indications of more troubles facing the Swiss banking industry. Some flight to safety buying may be supporting the currency given the sell off in global equity markets overnight. In fact, the Dec Swiss seemed to reject a probe below 87.50. But since the Swiss has become oversold, perhaps the market's recovery is more technically based. In fact, the market may have the technical short covering capacity to trade back towards 90 before another attempt to trade under 87.50 is seen.

POUND: Optimism from the UK banking rescue plan seems to be quickly wearing off and the economic reality that the UK is facing the possibility of a severe and protracted recession is putting downward pressure on the Pound. The UK economic news continues to point to a further depreciation in the Pound given that the unemployment rate reached an eight year high, the decline in housing prices is accelerating and retail sales dropped for the 4th straight month. Therefore, the path of least resistance will remain down and that leaves the market vulnerable to a test of last week's lows near 167.50.

CANADIAN DOLLAR: The Canadian has attempted a recovery bounce from overnight lows. But if weak price action in the energy and gold markets holds, we suspect the upside potential in the Canadian will be limited. The weak price action in the Canadian yesterday suggests the currency will certainly be affected by the bleak economic outlook for the US. In fact, weak US economic data today could weaken the Canadian as a contraction in US demand certainly lowers the export potential for the Canadian. Therefore, there appears to be more downside risk for the Canadian despite the market's oversold technical condition.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures 93.16 *hit second objective of 92.80. Hold the calls for a futures move above 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 10/16/2008: Daily stochastics turning lower from overbought levels is bearish and will tend to reinforce a downside break especially if near term support is penetrated. The close above the 9-day moving average is a positive short-term indicator for trend. There could be more upside follow through since the market closed above the 2nd swing resistance. The next downside objective is now at 81.13. The next area of resistance is around 82.96 and 83.23, while 1st support hits today at 81.91 and below there at 81.13.

EURO (DEC) 10/16/2008: Daily stochastics declining into oversold territory suggest the selling may be drying up soon. A negative signal for trend short-term was given on a close under the 9-bar moving average. There could be some early pressure today given the market's negative setup with the close below the 2nd swing support. The next downside objective is 133.88. The next area of resistance is around 135.86 and 136.88, while 1st support hits today at 134.36 and below there at 133.88.

JAPANESE YEN (DEC) 10/16/2008: Momentum studies trending lower from overbought levels is a bearish indicator and would tend to reinforce lower price action. A positive signal for trend short-term was given on a close over the 9-bar moving average. Follow through buying looks likely if the market can hold yesterday's gap on the day session chart. Since the close was above the 2nd swing resistance number, the market's posture is bullish and could see more upside follow-through early in the session. The next downside objective is 99.24. The next area of resistance is around 100.01 and 100.12, while 1st support hits today at 99.57 and below there at 99.24.

SWISS (DEC) 10/16/2008: Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The close below the 9-day moving average is a negative short-term indicator for trend. It is a slightly negative indicator that the close was lower than the pivot swing number. The next downside target is 87.57. The next area of resistance is around 88.59 and 88.97, while 1st support hits today at 87.89 and below there at 87.57.

16-Oct 2008

2008-10-16T02:27:00.002+02:00

CURRENCIES COMMENTARY

The $ retains a slight edge despite weak numbers directly ahead

Upcoming International Reports (all times CT)
10/16 Swiss ZEW Investor Sentiment 4:00 AM
10/16 Canadian Monthly Survey of Manufacturing 7:30 AM
10/17 Euro-zone Foreign Trade 4:00 AM
10/20 German Producer Price Index 1:00 AM
10/20 Canadian Wholesale Trade 7:30 AM

DOLLAR: We are somewhat surprised that the Dollar continues to hold up somewhat in the face of the San Francisco Fed comments that the US economy is already in a recession and that the Dollar also remains well bid in the face of what should be rather weak US retail sales figures later this morning. Apparently the currency markets continue to think that the US is still somewhat ahead of the curve in battling the credit crisis and perhaps even somewhat more capable of limiting the upcoming macro economic slowdown. However, with the Dollar showing a positive tilt early in the trading session today and seemingly undeterred by the initial weakness in the
US equity market, one can't rule out an attempt to run back up toward the Monday highs. Since we see no fundamental justification for the ongoing confidence in the Dollar, we can't suggest that traders pursue the Dollar on the upside. However, the path of least resistance in the Dollar or the trend appears to be up, even though that action feels very wrong into a pretty active slate of US economic data today.

EURO: With inflation readings in the Euro zone and from Germany both softening overnight, one gets the impression that the ECB might eventually have room to reduce interest rates. However, we don't get the sense that the market is poised to drive currency prices around on the prospect of a change in the interest rate differential. In fact, with the press continuing to decry the EU efforts to coordinate their response to the credit crisis, it would seem like the December Euro is destined to track inside a 137.75 to 135.00 trading range. In fact, not seeing the Euro rally in the face of patently weak US scheduled data this morning should highlight the Euro's lack of ongoing bullish favor.

YEN: With world equity markets showing a slight downside extension of the prior trading session's profit taking slide, there would appear to be rekindled flight to quality concerns surfacing again. Therefore, the Yen appears to be poised to regain the 100 level and perhaps even the 101 level over the coming two trading sessions. However, the yen would seem to be facing an all or nothing condition, where the trade either embraces the flight to quality angle, or the trade could become concerned about a significant recession in the Japanese economy. For the near term, the path of least resistance in the Yen is expected to be higher.

SWISS: The Swiss seems to have found some form of solid support around the 88.00 level and with anxiety toward the global slowdown rising again, equity prices under initial pressure and the EU Summit still considering a very wide array of plans, there would seem to be a supportive environment for the Swiss. Therefore pushed into the Swiss, traders should prefer the long side.

POUND: Even though UK unemployment levels overnight highlight a very slow UK economy, the Pound is showing signs of initial strength today and that is probably a function of the ongoing central bank debate in the Euro zone. Clearly classic economic readings are of little concern in the current marketplace, with the action apparently being dominated by entrenched ideas that the US Fed will be able to handle the crisis better than other central banks. However, the market also seems to think that the UK central bank will handle the crisis somewhat better than the EU. The Pound might rally today, but we see significant resistance at 177.42.

CANADIAN DOLLAR: Despite the sharp short covering run up in the Canadian off the recent lows, the currency remains under a liquidation threat. In our opinion, it will take a fairly broad based macro economic revival of optimism to create an uptrend pattern in the Canadian. In our opinion, the next move in the Canadian will be a slide back below the 86.00 level.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures 93.16 *hit second objective of 92.80. Hold the calls for a futures move above 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 10/15/2008: A bearish signal was triggered on a crossover down in the daily stochastics. Daily stochastics turning lower from overbought levels is bearish and will tend to reinforce a downside break especially if near term support is penetrated. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market's close below the pivot swing number is a mildly negative setup. The next downside target is now at 80.93. The next area of resistance is around 82.02 and 82.20, while 1st support hits today at 81.39 and below there at 80.93.

EURO (DEC) 10/15/2008: Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. A negative signal for trend short-term was given on a close under the 9-bar moving average. With the close over the 1st swing resistance number, the market is in a moderately positive position. The next downside objective is 135.25. The next area of resistance is around 137.30 and 138.25, while 1st support hits today at 135.80 and below there at 135.25.

JAPANESE YEN (DEC) 10/15/2008: The daily stochastics have crossed over down which is a bearish indication. Daily stochastics turning lower from overbought levels is bearish and will tend to reinforce a downside break especially if near term support is penetrated. The close above the 9-day moving average is a positive short-term indicator for trend. The gap lower on the day session chart is bearish and puts the market on the defensive. It is a slightly negative indicator that the close was lower than the pivot swing number. The next downside target is now at 97.36. The next area of resistance is around 99.40 and 99.69, while 1st support hits today at 98.24 and below there at 97.36.

SWISS (DEC) 10/15/2008: Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The market's close below the 9-day moving average is an indication the short term trend remains negative. The market's close below the pivot swing number is a mildly negative setup. The next downside target is 87.88. The next area of resistance is around 88.66 and 88.99, while 1st support hits today at 88.11 and below there at 87.88.

10-Oct 2008

2008-10-09T23:55:00.002+02:00

CURRENCIES COMMENTARY

The Dollar looks vulnerable unless Paulson action surprises

Upcoming International Reports (all times CT)

10/10 Swiss Employment 12:45 AM
10/10 France Industrial Production 1:45 AM
10/10 Canadian Labor Force Survey 6:00 AM
10/10 Canadian International Merchandise Trade 7:30 AM
10/10 Canadian New Housing Price Index 7:30 AM
10/13 UK Producer Price Index 3:30 AM
10/13 Japan Wholesale Prices (CGPI) 6:50 PM
10/14 Japan Consumer Confidence Survey 12:00 AM
10/14 France Consumer Price Index 1:45 AM
10/14 UK Consumer Price Index 3:30 AM
10/14 German ZEW Indicator of Economic Sentiment 4:00 AM
10/14 Canadian New Motor Vehicle Sales 7:30 AM

DOLLAR: As suggested in two prior daily comments, the Dollar has seen a transition of sorts. The biggest shift in Dollar action came with the Greenback's failure to rally in the face of indecision by the ECB on their initial bailout efforts seen early in the week. The second shift in the US Dollar action this week took place in the wake of periodic strength in the US equity markets that failed to provide the Dollar with a lift. In our opinion, the fear of international slowing has been temporarily replaced in the markets focus, by interest in how the US bailout
package will be implemented. In other words the currency trade is showing its doubts on the initial effectiveness of the efforts of the U.S. Treasury. Other traders will suggest that the reduction in US interest rates provides the basis for a correction in the Dollar, even though the US rate cut came as part of a coordinated effort. It is also possible that the US Dollar index reached an excessively overbought technical condition around this week highs and the market simply needed to balance its technicals. We also suspect that a temporary calming of anxieties is
cause for some profit-taking. Near-term downside targeting the December Dollar index is seen at 80.60 and then again down at 80.20. In fact, we suspect that regularly scheduled US data this morning will serve to keep some pressure on the Dollar.

EURO: The Euro was certainly technically overdone around this week's lows and deserving of a corrective bounce. Now that global anxieties have been tamped down (at least temporarily) the concern of excess capital flowing away from the euro zone has at least temporarily pushed to the back burner. It is also possible that a favorable German foreign trade surplus reading for August has further tamped down the concerns of slowing in the EU. Using normal corrective measurements, off the record six day sell off in the Euro, the first upside retracement point is pegged up at 139.00, with the 50% retracement point pegged up at 140.40. An initial close-in
resistance point for the December euro today could also be seen at 138.30, but with the focus turning more toward the prospects of a US recession, it would not be surprising to see a return to the 140 level in the coming trading sessions.

YEN: Since the Yen was one of the most favored flight quality instruments over the last five trading sessions, it won't be surprising to see a bit of corrective action in the currency in the days ahead. However, for the liquidation in the yen to unfold consistently, probably requires generally upbeat equity market action. It is also possible that the lack of an interest-rate cut by Japan early this week temporarily foments severe slowing concerns in the Japanese economy. Near-term corrective targeting in the December Yen is seen at 99.50 and then again at 99.10.

SWISS: While the Swiss has rallied significantly off the prior session's low, it is painfully clear to the bull camp that the Swiss was never perceived as a primary flight to quality instrument. While we doubt that the crisis has run its course, a period of temporary calm could provide solid resistance on the Swiss charts. A critical pivot point resistance zone in the December Swiss is seen today at 89.63 and a trade above that level could project a further rise to 90.36. In retrospect, the action in the Swiss this week suggests that the ultimate trend in the currency is still pointing downward. Therefore traders should exit long call plays implemented in the prior trading session.

POUND: Despite the weakening of the US Dollar over the last several trading sessions, the Pound has been unable to capitalize. Apparently aggressive action by the Bank of England to control the financial crisis and ongoing evidence of weakness in the UK economy has undermined the British pound, as it managed a fresh new low for the move overnight. In fact, news of a weaker UK foreign trade balance in August and another decline in Halifax housing prices puts the fear of a recession in the UK into a front and center position. Therefore, traders should be sellers of rallies in the Pound.

CANADIAN DOLLAR: Given the sharp and historical slide in the Canadian over the last two weeks, one might expect a somewhat impressive recovery bounce in the face of macro economic optimism this morning. However in the early going the Canadian hasn't been overly impressive in its recovery attempts and that could be the result of a news conference by the Canadian Minister of Finance later today. A nominal retracement of the late September early October slide in the Canadian would allow for a bounce to 91.96, but that type of move is unlikely unless the outlook for the global economy improves markedly. On the other hand, there might be little resistance in the Canadian until the 90.26 level on the charts.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
* If you bought the November Swiss 93 calls yesterday liquidate at the market today.

PREVIOUS RECOMMENDATIONS:
1) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures 93.16 *hit second objective of 92.80. Hold the calls for a futures move above 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 10/09/2008: Momentum studies are trending higher but have entered overbought levels. The market's short-term trend is positive on the close above the 9-day moving average. The market tilt is slightly negative with the close under the pivot. The near-term upside target is at 82.01. The next area of resistance is around 81.55 and 82.01, while 1st support hits today at 80.61 and below there at 80.13.

EURO (DEC) 10/09/2008: Daily stochastics are trending lower but have declined into oversold territory. The market's short-term trend is negative as the close remains below the 9-day moving average. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next downside objective is now at 135.61. The next area of resistance is around 137.96 and 138.74, while 1st support hits today at 136.40 and below there at 135.61.

JAPANESE YEN (DEC) 10/09/2008: Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The market's close above the 9-day moving average suggests the short-term trend remains positive. If yesterday's gap higher on the day session chart holds, additional buying could develop this session. There could be more upside follow through since the market closed above the 2nd swing resistance. The next upside objective is 101.92. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 101.10 and 101.92, while 1st support hits today at 99.86 and below there at 99.43.

SWISS (DEC) 10/09/2008: Momentum studies are declining, but have fallen to oversold levels. The market's short-term trend is negative as the close remains below the 9-day moving average. If yesterday's gap higher on the day session chart holds, additional buying could develop this session. There could be more upside follow through since the market closed above the 2nd swing resistance. The next downside objective is now at 88.05. The next area of resistance is around 89.80 and 90.25, while 1st support hits today at 88.70 and below there at 88.05.

09-Oct 2008

2008-10-09T06:06:00.004+02:00

CURRENCIES COMMENTARY

Expect the Yen & Swiss to become primary flight to quality issues

Upcoming International Reports (all times CT)
10/09 German Foreign Trade 1:00 AM
10/09 UK Foreign Trade 3:30 AM
10/09 UK Monetary Policy 6:00 AM
10/09 Japan BOJ Minutes 6:50 PM
10/09 German Manufacturing Turnover Index
10/10 Swiss Employment 12:45 AM
10/10 France Industrial Production 1:45 AM
10/10 Canadian Labor Force Survey 6:00 AM
10/10 Canadian International Merchandise Trade 7:30 AM
10/10 Canadian New Housing Price Index 7:30 AM
10/13 UK Producer Price Index 3:30 AM
10/13 Japan Wholesale Prices (CGPI) 6:50 PM

DOLLAR: There would seem to be a major fundamental and technical shift taking place in the US Dollar action this morning. In fact, with soaring global slowing concerns seen overnight, one would have expected the US Dollar to have exploded into new high ground this morning. While some might claim the rate cuts from the US reduce the slowing threat in the US, we ultimately think that the moves were too little, too late. In fact, if there is a failure of confidence toward the Dollar after the move to reduce rates, that could bring the US economic situation to a drastic junction. We suggest that traders look to purchase far out of the money put options on the Dollar Index this morning as a loss of confidence in the Dollar could feed on itself and in turn make almost everything worse for the US. Traders should look to the November Dollar index puts this morning as that will give a look at the short side of the Dollar, but in turn that strategy can somewhat define the risk of the play. If the Dollar isn't strong, Treasuries won't be seen as a flight to quality instrument and that in turn could prompt even more international money to migrate away from the Greenback. In the short term, it is possible that other than the yen, the most likely flight to quality currency might be the Swiss.

EURO: Certainly the Euro might rally somewhat in the face of the latest deterioration in the Asian markets and certainly the Euro might catch an added lift in the face of serious financial ramifications in the US session, but it is unclear whether the Euro zone will be able to keep itself out of a chain reaction financial sector failure. However, in the near term a mass exodus from the Dollar could funnel some capital temporarily toward the Euro, but it is possible that the trade simply avoids the US Dollar and the Euro and moves toward the Swiss and the Yen.

YEN: The Yen for the time being is being seen as the primary currency flight to quality instrument. In fact, until the Yen reaches up to the March highs of 104.65 we doubt that the up trend will run out of fuel. The biggest concern for the yen is what happens after the money flows in, as the BOJ isn't thought to have any gas pedal left on the interest rate cut front.

SWISS: With the US Treasuries getting only partial flight to quality interest and gold starting to see historical inflows, it is clear that we are approaching a once in a lifetime global economic threat and that in turn should begin to push money toward the Swiss. Traders should look to November Swiss 93 calls at the market this morning, as a risk controlled way to look at the long side of the Swiss.

POUND: After an attempt to rally overnight the trade seems to have come to the conclusion that the UK isn't the place to be. In fact, the rally and failure in the Pound comes after UK officials made a move to contain the crisis and that in turn would seem to put the UK economy in the same condition as the US economy. We suspect that the Pound is now poised to fall to the lowest level since 2005.

CANADIAN DOLLAR: A big range down extension in the Canadian clearly suggests that the Commodity drag and the drag from the US situation are factors that are set up to deflate the Canadian Dollar even more significantly directly ahead. In fact, it wouldn't be out of the question for the Canadian to fall down to the 85.00 level in the coming weeks.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
Buy the November Swiss 93 calls at the market this morning.

PREVIOUS RECOMMENDATIONS:
1) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures 93.16 *hit second objective of 92.80. *Re-Sell Dec Canadian again at 93.54. Hold the calls for a futures move above 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 10/08/2008: Momentum studies are trending higher but have entered overbought levels. The market's short-term trend is positive on the close above the 9-day moving average. The market setup is somewhat negative with the close under the 1st swing support. The next upside objective is 82.46. The next area of resistance is around 81.86 and 82.46, while 1st support hits today at 80.76 and below there at 80.24.

EURO (DEC) 10/08/2008: Daily stochastics declining into oversold territory suggest the selling may be drying up soon. A negative signal for trend short-term was given on a close under the 9-bar moving average. A positive setup occurred with the close over the 1st swing resistance. The next downside target is now at 134.99. The market is approaching oversold levels on an RSI reading under 30. The next area of resistance is around 137.32 and 138.18, while 1st support hits today at 135.72 and below there at 134.99.

JAPANESE YEN (DEC) 10/08/2008: Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market tilt is slightly negative with the close under the pivot. The next upside objective is 99.84. The next area of resistance is around 99.58 and 99.84, while 1st support hits today at 98.56 and below there at 97.79.

SWISS (DEC) 10/08/2008: Momentum studies are declining, but have fallen to oversold levels. The close below the 9-day moving average is a negative short-term indicator for trend. The market has a bullish tilt coming into today's trade with the close above the 2nd swing resistance. The next downside objective is now at 87.73. The next area of resistance is around 88.55 and 88.73, while 1st support hits today at 88.06 and below there at 87.73.

08-Oct 2008

2008-10-07T23:07:00.002+02:00

CURRENCIES COMMENTARY

Temporary pause in the Dollar rally expect corrective action

Upcoming International Reports (all times CT)

10/08 Japan BOJ Report 1:00 AM
10/08 France Trade Balance 1:45 AM
10/08 Euro-zone GDP 4:00 AM
10/08 German Industrial Production 5:00 AM
10/08 Japan Machinery Orders 6:50 PM
10/09 German Foreign Trade 1:00 AM
10/09 UK Foreign Trade 3:30 AM
10/09 UK Monetary Policy 6:00 AM
10/09 Japan BOJ Minutes 6:50 PM
10/09 German Manufacturing Turnover Index
10/10 Swiss Employment 12:45 AM
10/10 France Industrial Production 1:45 AM
10/10 Canadian Labor Force Survey 6:00 AM
10/10 Canadian International Merchandise Trade 7:30 AM
10/10 Canadian New Housing Price Index 7:30 AM
10/13 UK Producer Price Index 3:30 AM
10/13 Japan Wholesale Prices (CGPI) 6:50 PM

DOLLAR: The Dollar is clearly overbought after the sharp flight to quality run up of the last three weeks. However, a lack of definitive action from the ECB on some form of response to the spread of the financial crisis would seem to leave the Dollar underpinned on the charts. We think the lack of a Euro bounce in the face of better than expected German numbers overnight highlights the ongoing bullish bias toward the Dollar. However, we get the sense that the Dollar is vulnerable to some form of temporary back and fill, especially if the extreme financial market turmoil temporarily abates. Perhaps some players think that the Dollar is vulnerable to selling in the event that the US moves to cut interest rates, but in our opinion, moving to cut US rates could at least temporarily diffuse fears of severe slowing and in turn shore up the December Dollar above close-in support of 81.00. While the US is scheduled to release consumer credit readings late in the trading session today, the market just doesn't seem to be locked onto the US data for now, as the main focal point of the Dollar trade is still the flight to quality angle. Those that are long the Dollar should once again consider temporarily wrapping up those positions with a short out of the money call and a long just out of the money put combination.

EURO: The Euro appears to be showing some signs of strength this morning and that could lead to a corrective bounce. In fact, with German August manufacturing orders overnight managing a somewhat impressive gain, it is possible that the overt fear of severe slowing in the Euro zone is temporarily displaced. In fact, for the trade not to take the EU failure to come forth with a plan to address the looming credit crisis in the Euro zone, the trade could have punished the Euro this morning with another new low for the move. However, we get a sense that world
equity markets might see a temporary bounce (off the hope for coordinated rate cuts) and that in turn could reverse the constant flight to quality buying of the US Dollar and allow the December Euro to regain the 137.50 level over the coming 24 hours of trade.

YEN: While the Yen is clearly short term overbought a number of players are seeing the yen as a flight to quality instrument or perhaps the strength in the Yen is merely a combination of massive repatriation or ongoing carry trade liquidation efforts. For the time being, one can't argue with an eventual continuation of the up trend in the Yen, but a slight bounce in US equities today could result in a temporary back and fill in the December Yen back to close-in support of 98.50.

SWISS: While the Swiss missed the typical flight to quality buying interest seen in the past in the face of historically troubling financial times, it would seem like the December Swiss has now managed to forge a fairly solid support zone around 87.38 level over the last 24 hours. However, it still seems like the Swiss is going to remain out of favor unless the world financial situation is thought to be spinning totally out of control! In short, the ebb and flow of macro economic expectations for the Euro zone looks to dominate the action in the Swiss.

POUND: The Pound is getting a noted bounce off the last 24 hour lows, despite the markets concern that the UK has yet to offer up its own comprehensive containment package. In fact, the Pound is bouncing this morning despite another weak reading from UK industrial production type readings. In short, the Pound was excessively oversold and the mere hope of coordinated rate cuts seems to have prompted some concentrated buying interest. Near term resistance is seen at 174.65.

CANADIAN DOLLAR: With what appears to be a temporary pause in the fear of a severe global recession, the Canadian has managed to bounce off the 90.25 support zone. However, without a clear coordinated set of rate cuts ahead we doubt that the Canadian will be able to mount anything beyond a temporary bounce.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures 93.16 *hit second objective of 92.80. *Re-Sell DecCanadian again at 93.54. Hold the calls for a futures move above 98.00.
2) Short the October Euro 149 call 130 and long a November Euro 150 call for 204. Risk the position to a net loss of $900. *Hit the objective of 40 on the short call keep an objective of 500 on the long call. 3) Long the October Canadian 95 calls for 33 with an objective of 90. *Hit risk of 20.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 10/07/2008: The market made a new contract high on the rally. The upside crossover of the 9 and 18 bar moving average is a positive signal. Rising stochastics at overbought levels warrant some caution for bulls. The market's close above the 9-day moving average suggests the short-term trend remains positive. There could be more upside follow through since the market closed above the 2nd swing resistance. The near-term upside objective is at 82.56. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 82.21 and 82.56, while 1st support hits today at 81.32 and below there at 80.79.

EURO (DEC) 10/07/2008: The market broke to a new contract low. The downside crossover (9 below 18) of the moving averages suggests a developing short-term downtrend. Daily stochastics are trending lower but have declined into oversold territory. A negative signal for trend short-term was given on a close under the 9-bar moving average. The gap lower on the day session chart is bearish and puts the market on the defensive. The defensive setup, with the close under the 2nd swing support, could cause some early weakness. The next downside objective is now at 133.33. The 9-day RSI under 20 suggests the market is extremely oversold. The next area of resistance is around 135.46 and 136.74, while 1st support hits today at 133.76 and below there at 133.33.

JAPANESE YEN (DEC) 10/07/2008: Momentum studies are trending higher but have entered overbought levels. The close above the 9-day moving average is a positive short-term indicator for trend. The gap up on the day session chart gave a bullish indicator and more follow through could be seen this session. The market's close above the 2nd swing resistance number is a bullish indication. The near-term upside objective is at 102.62. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around 101.52 and 102.62, while 1st support hits today at 98.40 and below there at 96.38.

SWISS (DEC) 10/07/2008: The downside crossover of the 9 and 18 bar moving average is a negative signal. Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The close below the 9-day moving average is a negative short-term indicator for trend. The defensive setup, with the close under the 2nd swing support, could cause some early weakness. The next downside objective is 86.88. The next area of resistance is around 87.76 and 88.29, while 1st support hits today at 87.06 and below there at 86.88.

07-Oct 2008

2008-10-07T01:59:00.003+02:00

CURRENCIES COMMENTARY
10/06/08

Expect the Dollar to be the primary flight to quality instrument

Upcoming International Reports (all times CT)

10/07 Japan Leading Indicators 12:00 AM
10/07 UK Industrial Production 3:30 AM
10/07 German Manufacturing Orders Received 5:00 AM
10/07 Japan BOJ Rate
10/07 Japan Index of Business Conditions
10/08 Japan BOJ Report 1:00 AM
10/08 France Trade Balance 1:45 AM
10/08 Euro-zone GDP 4:00 AM
10/08 German Industrial Production 5:00 AM
10/08 Japan Machinery Orders 6:50 PM
10/09 German Foreign Trade 1:00 AM
10/09 UK Foreign Trade 3:30 AM
10/09 UK Monetary Policy 6:00 AM
10/09 Japan BOJ Minutes 6:50 PM
10/09 German Manufacturing Turnover Index
10/10 Swiss Employment 12:45 AM
10/10 France Industrial Production 1:45 AM
10/10 Canadian Labor Force Survey 6:00 AM
10/10 Canadian International Merchandise Trade 7:30 AM
10/10 Canadian New Housing Price Index 7:30 AM
10/13 UK Producer Price Index 3:30 AM
10/13 Japan Wholesale Prices (CGPI) 6:50 PM

DOLLAR: We still aren't totally sold on the idea that the US is the ultimate safe haven. However, with the overnight headline news suggesting that the Euro zone is in the midst of a huge financial sector containment effort, it is clear that the Dollar is still being seen as the favored currency. In fact, despite glaring signals of slowing inside the US, money seems to be flowing toward the US. We wondered last week if the ECB would be able to circle its wagons quickly or if they were destined to freeze in the headlines of the credit crisis like the US Congress and this morning it is clear that they are also behind the curve on the problem. While there is talk of a possible 50 basis point US rate cut, there is also talk of a possible coordinated rate cut among central banks and that could to a degree, reduce the currency market reaction to an upcoming US rate cut. In fact, if the US were to cut and it does so without any coordinated action, that could mean that the US is attempting to get out ahead of the severe slowing threat and that could simply add to the positive flow toward the Dollar. The September 30th Commitment of Traders with Options report for US Dollar showed the Non-commercial position to be net long 25,246 contracts, with the Non-reportable position net short 755 contracts and that made the "combined" spec and fund position net long 24,491 contracts. With the Dollar at the highs last week almost 200 points above the level where the COT report was measured we suspect that the net long positioning is moderately understated. With the record spec and fund long in the Dollar registered at 35,820 contracts on September 16th, the Dollar into the opening today probably isn't at an extremely overbought level yet. For now, we doubt that technical considerations are going to hold back the Dollar.

EURO: With troubles in the European real estate sector being tossed around this morning, it is clear that the ECB failed to stay out in front of the credit crisis. For the time being, money looks to flee the Euro, with the next downside target on the charts not seen until the 133.70 level on the weekly charts. While the September 30th Commitment of Traders with Options report for Euro showed the Non-commercial position to be net short 32,075 contracts, with the Non reportable position net short 3,423 contracts, that made the "combined" spec and fund position net short 35,498 contracts. However, we doubt that technical considerations are going to slow the erosion of the Euro in the wake of the ongoing credit market concerns. In fact, we would not be surprised to see the Euro slide all the way down to the 130 level at some point this week!

YEN: With a big range up extension in the Yen overnight it would seem like extreme risk aversion has pushed some buying toward the Yen. While the market might be lifted by some carry trade short covering, we suspect most of that influence has already run its course and that the buying of the Yen is geographical buying by traders looking to get away from the US and the Euro zone troubles. While Asia won't be totally immune to global slowing, we suspect that Asian currencies might avoid some of the significant travails seen in the West. The yen trend is pointing upward with the 100 level a possibility later this week.

SWISS: The Swiss is still out of favor despite the fact that the world seems to be drifting toward the crisis of the century. Unfortunately for flight to quality Swiss players, the Swiss is being locked into step with the declining Euro and the Euro zone credit crisis and that could put the December Swiss on a path to retest the 86.41 level at some point later this week.

POUND: For the time being, the Pound has managed to hold weekly chart support of 175, but with the UK working hard to contain its credit market turmoil close-in support probably won't be able to hold up the currency. Therefore, the path of least resistance remains down and the December Pound could easily return to the September lows down around 173.50 at some point later this week.

CANADIAN DOLLAR: With another range down washout coming in the wake of the flight to quality toward the US Dollar, it is clear that the Canadian is going to de-link from its fundamental value in the face of the global meltdown. Clearly expectations of a sharp and sustained slide in commodity prices adds to the downside tilt in the Canadian Dollar and that could leave the currency on a path to re-test the mid 2006 consolidation zone that starts at 91.50 on the weekly charts.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures 93.16 *hit second objective of 92.80. *Re-Sell Dec Canadian again at 93.54. Hold the calls for a futures move above 98.00.
2) Short the October Euro 149 call 130 and long a November Euro 150 call for 204. Risk the position to a net loss of $900. *Hit the objective of 40 on the short call keep an objective of 500 on the long call. 3) Long the October Canadian 95 calls for 33 with an objective of 90. Risk the trade to 20.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 10/06/2008: The market rallied to a new contract high. Rising stochastics at overbought levels warrant some caution for bulls. The market's close above the 9-day moving average suggests the shortterm trend remains positive. It is a mildly bullish indicator that the market closed over the pivot swing number. The
next upside objective is 81.79. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 81.30 and 81.79, while 1st support hits today at 80.28 and below there at 79.74.

EURO (DEC) 10/06/2008: Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The market tilt is slightly negative with the close under the pivot. The next downside objective is 136.16. With a reading under 30, the 9-day RSI is approaching oversold levels. The next area of resistance is around 139.26 and 140.05, while 1st support hits today at 137.32 and below there at 136.16.

JAPANESE YEN (DEC) 10/06/2008: The daily stochastics have crossed over up which is a bullish indication. Momentum studies are rising from mid-range, which could accelerate a move higher if resistance levels are penetrated. The close above the 9-day moving average is a positive short-term indicator for trend. The downside closing price reversal on the daily chart is somewhat negative. It is a slightly negative indicator that the close was lower than the pivot swing number. The next upside objective is 97.23. The next area of resistance is around 96.43 and 97.23, while 1st support hits today at 94.83 and below there at 94.04.

SWISS (DEC) 10/06/2008: Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. A negative signal for trend short-term was given on a close under the 9-bar moving
average. Since the close was above the 2nd swing resistance number, the market's posture is bullish and could see more upside follow-through early in the session. The next downside objective is now at 87.52. The next area of resistance is around 89.72 and 90.21, while 1st support hits today at 88.38 and below there at 87.52.

30-Sep 2008

2008-09-30T01:54:00.002+02:00

CURRENCIES COMMENTARY

For the near term the Dollar looks to dominate

Upcoming International Reports (all times CT)

09/30 France Housing Starts 1:45 AM
09/30 France Producer Price Index 1:45 AM
09/30 German Employment Situation 3:00 AM
09/30 UK Consumer Confidence (GfK) 4:30 AM
09/30 Canadian GDP (By Industry) 7:30 AM
09/30 Canadian Industrial Product and Raw Materials7:30 AM
09/30 Canadian Producer Price Index 7:30 AM
10/01 Swiss PMI 2:30 AM
10/01 German Manufacturing PMI 2:55 AM
10/01 Euro-Zone RBS\NTC Research Manufacturing PMI 3:00 AM
10/01 Euro-zone Unemployment Rate 4:00 AM
10/01 Japan Tankan Survey 6:50 PM
10/02 German Retail Sales 1:00 AM
10/02 Euro-zone Industrial Producer Prices (PPI) 4:00 AM
10/02 Euro-zone Monetary Policy 6:45 AM
10/02 UK Halifax Housing Price Index
10/03 Swiss Consumer Price Index 12:45 AM
10/03 German Service PMI 2:55 AM
10/03 Euro-Zone RBS\NTC Research Services PMI 3:00 AM
10/03 Euro-zone ECRI Future Inflation Gauge 3:30 AM
10/03 France ECRI Future Inflation Gauge 3:30 AM
10/03 Germany ECRI Future Inflation Gauge 3:30 AM
10/03 UK CIPS/NTC Research Services PMI 3:30 AM
10/03 UK ECRI Future Inflation Gauge 3:30 AM
10/03 Euro-zone Retail Trade 4:00 AM
10/06 Canadian Building Permits 7:30 AM
10/06 Japan BOJ Meeting

DOLLAR: For the time being, the Dollar is being lifted by the "hope" that US actions to contain the financial crisis might limit the damage to the US economy. It is also possible that coordinated intervention to support the Dollar by global central banks is providing the Dollar with its lift this morning. Clearly the failure of two European Financial entities over the weekend, slow economic readings from the Euro zone and a sharp decline in UK lending figures has also added to the Dollar strength this morning. In the short term, the Dollar looks to enjoy an edge and that might allow the Dollar to rise to the next resistance level on the charts up around the 79.00 level. However, the September 23rd Commitment of Traders with Options report for US Dollar showed the Noncommercial position to be net long 28,145 contracts, with the Non-reportable position net short 702 contracts and that made the "combined" spec and fund position net long 27,443 contracts as of early last week. With the Dollar to this morning's highs, adding another 180 points of upside gains, that probably means that the net spec long in the Dollar has expanded moderately. However, given the flow of news and the prospect of ongoing intervention, a rise toward 79.50 in the December Dollar index can't be ruled out in the near term.

EURO: With a big range down failure on the charts this morning and accompanying bearish macro economic news, the December Euro would appear to be poised to fall all the way back down to the early September consolidation zone around the 140 level. In fact, with the fear of severe slowing given credence in much slower than expected European Business and Consumer survey figures overnight and the awareness that the credit crisis is possibly spreading to Europe that should leave the Euro in an extremely bearish position. While the September 23rd Commitment of Traders with Options report for Euro showed the Non-commercial position to be
net short 35,288 contracts, with the Non-reportable position net short 1,164 contracts, that made the "combined" spec and fund position net short 36,452 contracts but we doubt that oversold technical considerations are capable of discouraging fundamentally based selling interest. In fact, we see a near term slide below the 140 level, especially if there is the slightest hint of any additional financial sector failures in the Euro zone.

YEN: The Yen has generally managed to respect a pattern of lower highs on the charts, and for the time being the path of least resistance in the Yen appears to be pointing downward. With the Press apparently trumpeting the concern of severe global slowing, the Japanese economy and particularly the Japanese export industry are probably going to come under more intense pressure. While we doubt that the Yen will see as much pressure as the Euro, in the wake of the current Dollar surge, we do think that the December yen will see at least a temporary probe back below the 94.00 level.

SWISS: With the big range down washout in the Swiss it would seem like the prospect of a US bailout plan has prompted a mass liquidation of flight to quality longs. With the added concern of financial troubles in the Euro zone that could even prompt some outright fresh selling in the Swiss and a potential slide to back to the 89.00 level in the coming trading sessions. While we doubt that the classic flight to quality angle will be completely extracted from the Swiss, fears of coordinated intervention to support the Dollar, could easily keep the Swiss down for most of the coming week.

POUND: With two bank/financial sector failures in the Euro zone over the weekend and evidence of sharply declining UK lending figures, it is clear that the financial crisis remains a major threat to the UK economy and to the Pound. In fact, as in other markets, the Pound might also seeing spillover pressure in the wake of Dollar support and that combined with the concerning macro economic condition in the UK could easily result in the December Pound sliding all the way back down to the 175.00 consolidation low zone at some time later this week.

CANADIAN DOLLAR: With a big downside washout in the Canadian overnight it would seem like the revival of the Dollar has served to prompt a moderately aggressive profit taking wave in the Canadian. With concerns of global slowing also being seen overnight that clearly undermines the Canadian from a physical commodity price perspective. In fact, in the face of severe global slowing concerns and a rising US Dollar, one has to expect the Canadian to fall back to 95.00 and perhaps even lower if the threat of global slowing really gains momentum.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk thecombination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures at 93.16 with an objective of 92.80. Hold the calls fora futures move above 98.00.
2) Short the October Euro 149 call 130 and long a November Euro 150 call for 204.Risk the position to a net loss of $900. Use an objective of 60 on the short call and an objective of 500 on the long call.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 09/29/2008: Momentum studies are declining, but have fallen to oversold levels. The close below the 9-day moving average is a negative short-term indicator for trend. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside target is 76.64. The next area of resistance is around 77.26 and 77.47, while 1st support hits today at 76.85 and below there at 76.64.

EURO (DEC) 09/29/2008: The major trend could be turning up with the close back above the 40-day moving average. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The close above the 9-day moving average is a positive short-term indicator for trend. The market tilt is slightly negative with the close under the pivot. The next upside target is 147.07. The next area of resistance is around 146.65 and 147.07, while 1st support hits today at 145.81 and below there at 145.38.

JAPANESE YEN (DEC) 09/29/2008: Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. A negative signal for trend short-term was given on a close under the 9- bar moving average. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next downside objective is 95.03. The next area of resistance is around 95.02 and 95.02, while 1st support hits today at 95.03 and below there at 95.03.

SWISS (DEC) 09/29/2008: Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market tilt is slightly negative with the close under the pivot. The next upside objective is 92.84. The next area of resistance is around 92.48 and 92.84, while 1st support hits today at 91.96 and below there at 91.79.

Feds Bailout Plan

2008-09-29T04:04:00.012+02:00

This Feds bailout bill is a "Bill of BS". Oh my god! They rushed it over the weekend and come out with trash. It's a big screw-up on the Tax payers money. How can it be possible using US$700 BILLIONS to save US$15 TRILLIONS Debt. Its' 4.6%. Don't tell me, they gonna leverage again. In Trading, don't use good money go after bad money. All I can says its' just "OUTRAGEOUS". Further, its' totally "MADNESS". Foreign Banks in USA may also tap into this US$700 Billions. This amount is not enough for American itself and yet Paulson want to help the rest of the World. I, not sure how the American Tax payer gonna swollows this BS.

Here is the Bailout Bill

27-Sep 2008

2008-09-27T03:46:00.002+02:00

CURRENCIES COMMENTARY

THE DOLLAR SEEMS TO HE ABLE TO RETAIN FAVOR DESPITE BAD POLITICS

Upcoming International Reports (all times CT)

09/28 Japan Retail Sales 6:50 PM
09/29 Japan Housing Starts 1:00 AM
09/29 France Employment Situation 1:45 AM
09/29 Euro-zone Business and Consumer Survey 4:00 AM
09/29 Japan Manufacturing PMI 6:15 PM
09/29 Japan Household Spending 6:30 PM
09/29 Japan Unemployment Rate 6:30 PM
09/29 Japan Industrial Production 6:50 PM
09/30 France Housing Starts 1:45 AM
09/30 France Producer Price Index 1:45 AM
09/30 German Employment Situation 3:00 AM
09/30 UK Consumer Confidence (GfK) 4:30 AM
09/30 Canadian GDP (By Industry) 7:30 AM
09/30 Canadian Industrial Product and Raw Materials7:30
09/30 Canadian Producer Price Index 7:30 AM
10/01 Swiss PMI 2:30 AM
10/01 German Manufacturing PMI 2:55 AM
10/01 Euro-Zone RBS\NTC Research Manufacturing PMI 3:00
10/01 Euro-zone Unemployment Rate 4:00 AM
10/01 Japan Tankan Survey 6:50 PM

DOLLAR: Surprisingly the Dollar is showing signs of strength this morning despite the breakdown of the negotiations on the US bailout plan. Even more surprising is the fact that the Dollar wasn't seriously undermined by another round of much weaker than expected scheduled economic readings. Apparently the promise of a sweeping bailout and the potential for a stimulus package along with the bailout effort is giving the Dollar some support. Perhaps seeing a contraction in French GDP readings for the 2nd quarter has also prompted the trade to compare that weakness with the anticipated US 2nd quarter GDP reading of +3.3% that are due out this morning and that suggests that the US came into the severe slowdown with more momentum than the Euro zone. In fact, seeing the Dollar generally remain firm in the face of the political breakdown in Washington suggests to us that the currency trade is ultimately going to be bullish toward the Dollar. In other words, the markets think that some plan will be forth coming and unless there is an event that suggests the delay has fomented further significant deterioration in the US situation, the December Dollar looks to hold above critical support on the charts of 76.65.

EURO: The Euro is showing a quasi technical failure on the charts this morning and since that weakness comes in the face of a US legislative breakdown and slightly better than expected French Consumer Confidence readings, it would not seem like the Euro is destined to come into favor. In fact, the Euro even seems to be undermined as a result of the delays in the US bailout effort and the Euro also seems to be undermined as a result of the latest large US bank failure. Perhaps the promise of a US stimulus plan puts the Fed ahead of the ECB in the effort to pull out of the economic dive. Next downside targeting in the December Euro is seen at 145.53 and perhaps not until the 144.88 level. Since the Euro hasn't given that much ground in the build up to the eventual passage of the US bailout, we suspect that the Euro retains a downside capacity of perhaps 144 in the coming two trading sessions.

YEN: Clearly the Yen has thrown off the downward bias that was in place for most of this week and we suspect that the delay in Washington has prompted yet another layer of risk averse carry trade positions to stand aside. While we can't rule out a jump in the December Yen back up to 97.17 we can't get on board with the view that the Yen is poised for a sustained upward extension on the charts. In fact, traders should consider the purchase of December yen 93.50 puts on a run up to the 97.17 level today.

SWISS: The Swiss has been mostly caught in a trading range this week, but the currency has given some ground off the idea that the US bailout plan has dampened the flight to quality status of the Swiss. It would seem like the 92.00 level is being seen as a critical pivot point, but the failure to see the Swiss rally in the wake of a political breakdown in the US overnight and another "largest ever US bank failure" that would seem to suggest that the bull camp in the Swiss lacks definitive control over the currency. With Swiss KOF readings also softening overnight, it is clear that even the macro economic condition favors the bear camp in the Swiss.

POUND: The Pound has certainly displayed a two sided trade this week but the failure to see a noted rally in the face of the developments of the last 24 hours would seem to suggest that the bulls aren't exactly in control of the Pound action. Pushed into the market we would be a seller of the Pound today on a bounce back up to 186.30. In fact, if the US somewhat wraps up its financial mess today that could leave some headline room for concerns on the UK situation.

CANADIAN DOLLAR: The Canadian has pretty much held favor this week despite the meandering of the US political process and the wild back and forth action in global equity prices. In fact, the Canadian even held ground in the face of significant weakness in energy and metals prices yesterday. Therefore we are not sure if Canadian numbers this morning will have a significant impact on the Canada today, especially since the US numbers in the prior trading session were given little attention. However, there is a very low bar of economic strength present in the marketplace and some decent numbers from Canada this morning could shore up close-in consolidation support on the charts around 96.42 today.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures at 93.16 with an objective of 92.80. Hold the calls for a futures move above 98.00.
2) Short the October Euro 149 call 130 and long a November Euro 150 call for 204. Risk the position to a net loss of $900. Use an objective of 60 on the short call and an objective of 500 on the long call.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 09/26/2008: Momentum studies are declining, but have fallen to oversold levels. The market's short-term trend is negative as the close remains below the 9-day moving average. The daily closing price reversal up on the daily chart is somewhat positive. The close over the pivot swing is a somewhat positive setup. The next downside objective is now at 76.04. The next area of resistance is around 77.64 and 78.02, while 1st support hits today at 76.65 and below there at 76.04.

EURO (DEC) 09/26/2008: The market back below the 40-day moving average suggests the longer-term trend could be turning down. Momentum studies are trending higher but have entered overbought levels. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market tilt is slightly negative with the close under the pivot. The next upside target is 147.93. The next area of resistance is around 147.01 and 147.93, while 1st support hits today at 145.41 and below there at 144.73.

JAPANESE YEN (DEC) 09/26/2008: Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. A negative signal for trend short-term was given on a close under the 9- bar moving average. The market is in a bearish position with the close below the 2nd swing support number. The next downside objective is 93.69. The next area of resistance is around 95.28 and 95.89, while 1st support hits today at 94.18 and below there at 93.69.

SWISS (DEC) 09/26/2008: Rising stochastics at overbought levels warrant some caution for bulls. The market's short-term trend is positive on the close above the 9-day moving average. The downside closing price reversal on the daily chart is somewhat negative. The market's close below the pivot swing number is a mildly negative setup. The near-term upside target is at 93.29. The next area of resistance is around 92.68 and 93.29, while 1st support hits today at 91.68 and below there at 91.29.

26-Sep 2008

2008-09-25T16:50:00.002+02:00

CURRENCIES COMMENTARY

BEWARE OF HISTORIC TWO SIDED ACTION IN ALL MARKETS

Upcoming International Reports (all times CT)

09/26 France Consumer Confidence 1:45 AM
09/26 Swiss KOF Leading Indicator 4:30 AM
09/28 Japan Retail Sales 6:50 PM
09/29 Japan Housing Starts 1:00 AM
09/29 France Employment Situation 1:45 AM
09/29 Euro-zone Business and Consumer Survey 4:00 AM
09/29 Japan Manufacturing PMI 6:15 PM
09/29 Japan Household Spending 6:30 PM
09/29 Japan Unemployment Rate 6:30 PM
09/29 Japan Industrial Production 6:50 PM
09/30 France Housing Starts 1:45 AM
09/30 France Producer Price Index 1:45 AM
09/30 German Employment Situation 3:00 AM
09/30 UK Consumer Confidence (GfK) 4:30 AM
09/30 Canadian GDP (By Industry) 7:30 AM
09/30 Canadian Industrial Product and Raw Materials7:30 AM
09/30 Canadian Producer Price Index 7:30 AM

DOLLAR: While the Dollar is down this morning, we are somewhat surprised that the Dollar isn't down much harder in the early going today. However, a unique situation is poised to present itself to the currency markets, as evidence of economic disaster are starting to show up outside of the US in the form of a run on a Hong Kong bank. Furthermore, concerns of extreme slowing in the Euro zone are also starting to flow and that has partially countervailed the ongoing negative bias piling up on the Dollar. In a big picture sense, one should expect the Dollar to fall down to and below the 76.00 level in the event that it becomes clear that a bailout package will not be completed before the coming weekend. In fact, with a sweep of scheduled US economic data this morning expected to fan the concerns of US slowing we suspect, that the Dollar will also be presented with classic fundamental selling pressure. However, those that are short the Dollar need to be aware of the potential for a massive influx into the Dollar in the face of a passage, or in the face of talk that a global recession is unavoidable. Given the potential two sided extreme volatility ahead, traders should utilize option strategies to make bets in the coming historical reaction! Bearish toward the Dollar, get short December futures, Buy a December 79 call and sell a December 70 put.

EURO: The Euro seems to have forged a quasi triple bottom low around the 146.10 level and that level could be seen as a critical pivot point in the early trade today. While we think that the US numbers will push up the Euro
this morning and we also think that the failure to pass the bailout bill will leave the Euro bulls with an edge, we have to fret over the prospect of a major reversal in the Euro in the wake of an eventual passage of the US bailout plan, especially since the expectation of a full blown European recession is starting to surface. The Euro might be able to rally in the near term, but when one considers the magnitude of the Euro rally off the September lows, those that are long appear to have very substantial risk over the coming five trading sessions.

YEN: Over the last several sessions the yen has lost its bullish buzz and with a pattern of lower highs present on the charts. It would almost seem like the Yen is seeing some weakness from the Hong Kong bank run and clearly the trade is becoming more concerned about a sharp decline in Japanese exports in the face of a global recession. In fact, the new leadership in Japan has suggested that economic recovery will be the top priority of the Japanese government and that highlights the deterioration of confidence toward the Japanese economy.

SWISS: With the US bailout effort reportedly moving toward a bailout plan that could deflate some of the flight to quality flow toward the Swiss the bulls have to brace for some potential adversity. However, many traders think that a sharp slide in the Swiss in the wake of an "official plan" will be a temporary event and that the Swiss will retain a large measure of flight to quality status. In the short term, traders seem to have made the 92.00 level some sort of bull/bear line.

POUND: The Pound generally remains in favor despite the potential backlash from severe problems in the US. Like the rest of the currency markets, the Pound trade seems poised for a major decision on the charts with the 185 level seemingly a bull/bear line and therefore the next move in the Pound might be a pronounced explosion. We would suggest that traders utilize long put and long call premium to position in the market rather than futures because there might not be any small moves in the coming five trading sessions.

CANADIAN DOLLAR: Like a number of other currencies the Canadian has pulled up to the 97.00 level as if that is some form of critical pivot point. As in every other currency, the market is simply waiting on the outcome on the Dollar and unfortunately the Dollar might temporarily rally in the face of a bailout passage and that rally might ultimately fail. We suggest that traders be short futures and long multiple calls against that position and wait for a historical reaction ahead.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
Strategy could be everything in the coming sessions.

PREVIOUS RECOMMENDATIONS:
1) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures at 93.16 with an objective of 92.80. Hold the calls for a futures move above 98.00. 2) Short the October Euro 149 call 130 and long a November Euro 150 call for 204. Risk the position to a net loss of $900. Use an objective of 60 on the short call and an objective of 500 on the long call.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 09/25/2008: Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. A negative signal for trend short-term was given on a close under the 9-bar moving average. Market positioning is positive with the close over the 1st swing resistance. The next downside objective is now at 76.40. The next area of resistance is around 77.37 and 77.51, while 1st support hits today at 76.81 and below there at 76.40.

EURO (DEC) 09/25/2008: Momentum studies are trending higher but have entered overbought levels. The close above the 9-day moving average is a positive short-term indicator for trend. It is a slightly negative indicator that the close was lower than the pivot swing number. The next upside objective is 147.71. The next area of resistance is around 147.07 and 147.71, while 1st support hits today at 146.03 and below there at 145.62.

JAPANESE YEN (DEC) 09/25/2008: Declining momentum studies in the neutral zone will tend to reinforce lower price action. The market's short-term trend is positive on the close above the 9-day moving average. The gap down on the day session chart is bearish with more selling pressure possible today. The defensive setup, with the close under the 2nd swing support, could cause some early weakness. The next downside objective is 94.90. The next area of resistance is around 95.44 and 95.69, while 1st support hits today at 95.04 and below there at 94.90.

SWISS (DEC) 09/25/2008: Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The close above the 9-day moving average is a positive short-term indicator for trend. The market's close below the 1st swing support number suggests a moderately negative setup for today. The nearterm upside target is at 93.13. The next area of resistance is around 92.59 and 93.13, while 1st support hits today at 91.79 and below there at 91.52.

25-Sep 2008

2008-09-25T02:23:00.002+02:00

CURRENCIES COMMENTARY

EXPECT A RANGE TRADE AS THE MARKET AWAITS A CONGRESSIONAL DECISION

Upcoming International Reports (all times CT)

09/25 Japan Consumer Price Index 6:30 PM
09/26 France Consumer Confidence 1:45 AM
09/26 Swiss KOF Leading Indicator 4:30 AM
09/28 Japan Retail Sales 6:50 PM
09/29 Japan Housing Starts 1:00 AM
09/29 France Employment Situation 1:45 AM
09/29 Euro-zone Business and Consumer Survey 4:00 AM
09/29 Japan Manufacturing PMI 6:15 PM
09/29 Japan Household Spending 6:30 PM
09/29 Japan Unemployment Rate 6:30 PM
09/29 Japan Industrial Production 6:50 PM

DOLLAR: The Dollar has managed to forge a bounce off this week's lows off the idea that some form of bailout plan is forth coming. We also suspect that talk of the potential for a smaller bailout has temporarily downgraded the fear that the US is going to exhaust its borrowing capacity. However, it is also possible that the Buffett move to purchase a $5 billion stake in Goldman is also serving to lift the Dollar this morning. On the other hand, we get the sense that even in the face of a bailout passage that might not fully turn the Dollar up. In fact, over the coming three trading sessions, the evidence of classic slowing is expected to show up in the US numbers and that could serve to keep up the pressure on the Greenback. In the end, we suspect Congress will take as long as the market will allow and that could mean that quasi normalcy reigns over the coming two trading sessions, but into Friday morning, we suspect that a host of markets will become impatient with the delay and that many markets like the Dollar will suffer some punishment, when it becomes clear that passage of the plan will be pushed into next week. Therefore, traders might see a temporary rally back above the 77.00 level, as a place to get short the Dollar for a short term trade.

EURO: The Euro has fallen back from the prior session's highs and clearly "US Financial sector injection news" is at least partially behind the weakness in the Euro. With a French Business Survey and a German Ifo Business climate Index showing weakness overnight, the Euro would also seem to have a macro economic reason to fall back toward the next critical chart support point of 146.00. In fact, in the face of Fed testimony this morning, we can't rule out a temporary slide down to 145.62. Unless Bernanke testimony manages to shift the tide toward a passage of the bailout, the odds that the Euro will chop around both sides of 146.00 is very high.

YEN: For the time being, the Yen appears to be in a weakened posture but until something definitive on the US situation surfaces, one could expect a trading range bound by 94.00 and 96.20 in the December Yen. Apparently testimony and debate on the US bailout is not something that fuels sustained carry trade liquidation in the yen and therefore we suspect that the Yen will manage to temporarily return to the 94.00 level in the coming two trading sessions.

SWISS: With the Buffett news and some positive action in global equity prices overnight, the Swiss is seeing some initial profit taking liquidation. However, we would suspect that the December Swiss will respect support at the 92.00 level. In fact, if the US scheduled numbers from the existing home sales report this morning are found to be markedly weaker than expectations this morning that could reverse the initial slide in the Swiss. For now, the path of least resistance in the Swiss is pointing downward.

POUND: The Pound has remained within close proximity to the recent highs and apparently the trade is keeping the Pound firmly bid because of the debate over the bailout plan. It also seems as if dire expectations for the UK CBI September retail sales readings were not realized overnight and that might actually be giving the Pound some minor macro economic lift, which is certainly a change of pace. However, as long as the US bailout plan is in limbo, it is unlikely that the December Pound will be able to get out of a range defined as 184.04 to 185.68.

CANADIAN DOLLAR: Clearly the December Canadian has run into some form of resistance at the 97.00 level, probably because that level was such a significant support zone for the first 7 months of the year. On the other hand, some traders are concerned that a tempering of Canadian inflation expectations, is the real force serving to cap off the September rally. In fact, we would suggest that market action in precious metals and energy markets has become the real measure of inflationary expectations and not the typical official Canadian inflation readings.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures at 93.16 with an objective of 92.80. Hold the calls for a futures move above 98.00. 2) Short the October Euro 149 call 130 and long a November Euro 150 call for 204. Risk the position to a net loss of $900. Use an objective of 60 on the short call and an objective of 500 on the long call.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 09/24/2008: The downside crossover of the 9 and 18 bar moving average is a negative signal. Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The market's close below the 9-day moving average is an indication the short term trend remains negative. The market has a slightly positive tilt with the close over the swing pivot. The next downside objective is now at 75.85. The next area of resistance is around 77.20 and 77.60, while 1st support hits today at 76.33 and below there at 75.85.

EURO (DEC) 09/24/2008: The upside crossover (9 above 18) of the moving averages suggests a developing short-term uptrend. Rising stochastics at overbought levels warrant some caution for bulls. The market's shortterm trend is positive on the close above the 9-day moving average. It is a slightly negative indicator that the close was lower than the pivot swing number. The near-term upside target is at 148.56. The next area of resistance is around 147.82 and 148.56, while 1st support hits today at 146.22 and below there at 145.36.

JAPANESE YEN (DEC) 09/24/2008: Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The market's short-term trend is positive on the close above the 9-day moving average. The gap up on the day session chart gave a bullish indicator and more follow through could be seen this session. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next downside objective is 95.67. The next area of resistance is around 95.66 and 95.66, while 1st support hits today at 95.67 and below there at 95.67.

SWISS (DEC) 09/24/2008: The upside crossover (9 above 18) of the moving averages suggests a developing short-term uptrend. Momentum studies are trending higher but have entered overbought levels. The market's short-term trend is positive on the close above the 9 day moving average. It is a slightly negative indicator that the close was lower than the pivot swing number. The next upside target is 93.56. The next area of resistance is around 93.23 and 93.56, while 1st support hits today at 92.43 and below there at 91.97.

23-Sep 2008

2008-09-24T02:09:00.003+02:00

CURRENCIES COMMENTARY

EXPECT THE SWISS AND EURO TO GAIN OVER THE DOLLAR TODAY OVERNIGHT

Upcoming International Reports

09/24 France Business Survey 1:45 AM
09/24 Euro-zone Balance of Payments 3:00 AM
09/24 German IFO Business Climate Index 3:00 AM
09/24 Japan Trade Balance 6:50 PM
09/25 Japan Consumer Price Index 6:30 PM
09/26 France Consumer Confidence 1:45 AM
09/26 Swiss KOF Leading Indicator 4:30 AM
09/28 Japan Retail Sales 6:50 PM
09/29 Japan Housing Starts 1:00 AM
09/29 France Employment Situation 1:45 AM
09/29 Euro-zone Business and Consumer Survey 4:00 AM
09/29 Japan Manufacturing PMI 6:15 PM
09/29 Japan Household Spending 6:30 PM
09/29 Japan Unemployment Rate 6:30 PM
09/29 Japan Industrial Production 6:50 PM

DOLLAR: The Dollar is holding up relatively well this morning and that might be the result of a slight rekindling of international slowing fears overnight. However, while the Dollar looks to benefit from ongoing talk about severe global slowing (off the idea that the US has historically handled slowing better than other central banks) the Dollar could fail to benefit from classic relationships in the face of the US borrowing binge. Certainly the Dollar seems to have found some temporary support above the 76.00 level, but in the event that US stocks start to fall or the bailout plan expands significantly, that could be the catalyst that yanks the rug out from under the Dollar again. In fact, while we can't rule out a temporary bounce in the Dollar today back toward 76.86, we assume that the overall path of least resistance is still pointing downward. However, the 76.00 level could be a quasi line in the sand between normal anxiety and severe anxiety! We suspect that the scheduled US data today will favor the bear camp in the Dollar, but that losses in the Dollar early in the trading session look to be tempered by the expectation for severe slowing outside of the US. Aggressive traders should be sellers of the Dollar on a rise back above 76.60, or traders should look to purchase a November Dollar index 74 put for 52.

EURO: The fact that household spending in the Euro zone contracted in the latest reading seems to be having only a minimal impact on the Euro this morning. In fact, talk of increased odds of a global recession overnight, in a host of international equity markets, also doesn't seem to be undermining the Euro and that could mean that sentiment in the Euro is set to remain mostly positive. Clearly the Dollar's travails are a benefit to the Euro and with the US Congress poised to take its time on the bailout package that would seem to clear the way for another high anxiety event, which in turn could funnel capital toward the Euro. Given the sharp upward extension in the Euro, off the September lows, traders should consider utilizing a calendar call spread of selling the October Euro 149 call for 130 and using that capital to purchase a longer term November Euro 150 call for 204. The October options have 10 days until expiration and the Euro will need to rally consistently to offset heavy time decay.

YEN: The yen would seem to be poised to forge another upside breakout, as a risk aversion mentality continues to surface and in turn that looks to force the carry trade shorts out of the Yen. However, when one considers that the Yen has already seen a rather dramatic run up off the August lows and given that the yen has balked at levels above 96.00, it would seem that the magnitude of short covering buying has begun to taper off a bit. Therefore, traders that get long the yen at current levels should consider carrying along some put coverage in hopes of weathering violent two sided trade action ahead.

SWISS: With the gold market literally exploding, it would appear that the US flight to quality incident underway has finally achieved a historical pedigree and that in turn could really turn up the capital flow toward the Swiss. In fact, with the US Congress expected to take its time on the bailout package and the Swiss only yesterday managing to regain the first retracement point off the March through September washout move, it would appear that the Swiss has ongoing upside capacity. In the near term, the next upside target in the December Swiss is the 50% retracement point of the March through September slide, which stands at 94.45.

POUND: The Pound remains pegged on an upside breakout point on the charts, but we are somewhat surprised to see the Pound manage such an impressive run up in the face of the latest Dollar troubles. In fact, in the event that the US situation markedly worsens, we suspect that the UK economy could see a ripple affect. Therefore, we are inclined to think that the December Pound will have rather significant resistance at 186.10 and that buyers of the Pound at current levels are potentially assuming more risk than reward. Like the Yen suggestions this morning, those that buy the Pound at current levels should consider the purchase of Pound puts, financed by the sale of out of the money Pound calls.

CANADIAN DOLLAR: Now that the Canadian has returned to the underside of an extended consolidation zone we suspect that upside action will become a little more reserved. Certainly sharp gains in oil and metals prices added a tailwind to the upside action in the Canadian, but a serious deterioration in the US economic outlook again and or expectations for a severe global recession would not be a big positive for the Canadian economy or Canadian commodities. Therefore, while we can't discount the prospect of an upward extension in the Canadian, the 97.00 level won't be easily usurped.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
Sell the October Euro 149 call for 130 and using that capital to purchase a November Euro 150 call for 204. Risk the position to a net loss of $900. Use an objective of 60 on the short call and an objective of 500 on the long call.

PREVIOUS RECOMMENDATIONS:
Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures at 93.16 with an objective of 92.80. Hold the calls for a futures move above 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 09/23/2008: The major trend has turned down with the cross over back below the 40-day moving average. Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The close below the 9-day moving average is a negative short-term indicator for trend. The market is in a bearish position with the close below the 2nd swing support number. The next downside objective is 74.90. Some caution in pressing the downside is warranted with the RSI under 30. The next area of resistance is around 77.19 and 78.42, while 1st support hits today at 75.44 and below there at 74.90.

EURO (DEC) 09/23/2008: The cross over and close above the 40-day moving average indicates the longer-term trend has turned up. Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The close above the 9-day moving average is a positive short-term indicator for trend. If yesterday's gap higher on the day session chart holds, additional buying could develop this session. The market's close above the 2nd swing resistance number is a bullish indication. The near-term upside target is at 149.87. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 149.15 and 149.87, while 1st support hits today at 146.45 and below there at 144.48.

JAPANESE YEN (DEC) 09/23/2008: Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The close above the 9-day moving average is a positive short-term indicator for trend. If yesterday's gap higher on the day session chart holds, additional buying could develop this session. The market has a bullish tilt coming into today's trade with the close above the 2nd swing resistance. The next downside target is 93.98. The next area of resistance is around 96.23 and 96.55, while 1st support hits today at 94.95 and below there at 93.98.

SWISS (DEC) 09/23/2008: The market now above the 40-day moving average suggests the longer-term trend has turned up. Rising stochastics at overbought levels warrant some caution for bulls. The market's close above the 9-day moving average suggests the short-term trend remains positive. The gap upmove on the day session chart is a bullish indicator for trend. There could be more upside follow through since the market closed above the 2nd swing resistance. The next upside target is 94.86. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 94.30 and 94.86, while 1st support hits today at 92.28 and below there at 90.81.

22-Sep 2008

2008-09-22T17:58:00.002+02:00

CURRENCIES COMMENTARY

EXPECT THE DOLLAR TO LOSE GROUND THROUGHOUT THIS WEEK!

Upcoming International Reports

09/22 Canadian Retail Trade 7:30 AM
09/23 Euro-zone Industrial New Orders 4:00 AM
09/24 France Business Survey 1:45 AM
09/24 Euro-zone Balance of Payments 3:00 AM
09/24 German IFO Business Climate Index 3:00 AM
09/24 Japan Trade Balance 6:50 PM
09/25 Japan Consumer Price Index 6:30 PM
09/26 France Consumer Confidence 1:45 AM
09/26 Swiss KOF Leading Indicator 4:30 AM
09/28 Japan Retail Sales 6:50 PM
09/29 Japan Housing Starts 1:00 AM
09/29 France Employment Situation 1:45 AM
09/29 Euro-zone Business and Consumer Survey 4:00 AM
09/29 Japan Manufacturing PMI 6:15 PM
09/29 Japan Household Spending 6:30 PM
09/29 Japan Unemployment Rate 6:30 PM
09/29 Japan Industrial Production 6:50 PM

DOLLAR: The Dollar is clearly under pressure this morning as a result of the magnitude of the US borrowing needed to undertake such a sweeping bailout. In fact, with the plan seemingly including a wider range of toxic assets, (than might have been expected in the bailout plan last week) it would seem like the political process is destined (as usual) to add to the size of the bailout. With the focus almost exclusively on the financial sector and almost no attention being paid to the real economy, it would appear that the US economy is destined to slow even further. While the "combined" spec and fund Net Long position in US Dollar hit a new record level at 35,820 contracts, off the September 16th COT report, the Dollar at times late last week was as much as 222 points below the level where the COT report was measured and that might have tempered the overbought condition somewhat. In the end, the path of least resistance in the Dollar would seem to be pointing downward, with the next significant support zone not seen until the 77.00 level and perhaps not until the August consolidation low support zone of 76.55. For the time being, uncertainty toward the US bailout plan and evidence of more classic US slowing should leave the Dollar in a downward mode.

EURO: The Euro has already forged another upside breakout in the early action today and it would appear that the December Euro is at least poised for a quick run up to the 147.50 level. Clearly the Dollar's vulnerability is the main element behind the sharp rise in the Euro, but in looking at the latest positioning figures, it is also likely that technical considerations are providing some addition lift to the Euro. While the "combined" spec and fund Net Short position in Euro hit a new record level at 46,370 contracts early last week, the Euro at times late last week, was as much as 433 points above the level where the COT report was measured and therefore a modest portion of the extremely oversold condition in the Euro was probably reduced. In the near term, the trade looks to grant the Euro the interest rate and macro economic differential edge and that could allow for a run up to the 148.12 level in the December Euro.

YEN: The yen clearly seems to have remained off balance in the wake of the historical US bailout plan. Given the standing of the yen in the crisis so far and the Yen's capacity to respect the 94.00 level this morning, we have to think that the Yen is poised to retain a slightly bullish posture on the charts. In fact, in the event that the market expresses dismay over the size of the US bailout plan or the bailout plan gets bogged down by political gridlock, that could rekindle the upward momentum in the Yen in the coming trading sessions. In short, one has to leave the edge with the bull camp in the Yen.

SWISS: With the early action in the Swiss this morning clearly showing a bullish bias, it would appear that flight to quality concerns remain in control of the Swiss. While we are not sure that the December Swiss will be able to rise definitively above the 92.40 level, it would appear that the currency has the capacity to return to that level in the early action this week. Solid support in the December Swiss is current pegged down at 91.01.

POUND: Clearly the trade is focused on putting some value back into the Pound after the massive August and September slide. 50% back on the August/September washout is seen up at 185.36, but a rally back to the top of the mid August consolidation zone to 186.35 can't be ruled out in the coming Trading sessions. In fact, the Pound might be able to rally as long as the US plan is merely anticipated and is not enacted.

CANADIAN DOLLAR: The Canadian continues to derive a direct benefit from overt weakness in the US Dollar. However, now that the Canadian has returned to the consolidation highs of 95.91, it is possible that something more definitive toward the Canadian economy might have to be forth coming to result in a definitive upside extension. However, strength in commodity prices and less overall anxiety toward the North American economic situation could allow for a continued rise in the Canadian Dollar toward the 97.00 level, which is the underside of an extended consolidation pattern from earlier in the year.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long the October Dollar Index 79 puts for 800, *Traders should have liquidated the put at the market for roughly 800 to 1,010. 2)*Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures at 93.16 with an objective of 92.80. Hold the calls for a futures move to 97.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 09/22/2008: Declining momentum studies in the neutral zone will tend to reinforce lower price action. The close below the 9-day moving average is a negative short-term indicator for trend. The daily closing price reversal down puts the market on the defensive. It is a slightly negative indicator that the close was lower than the pivot swing number. The next downside objective is now at 76.63. The next area of resistance is around 78.59 and 79.77, while 1st support hits today at 77.02 and below there at 76.63.

EURO (DEC) 09/22/2008: Stochastics are at mid-range but trending higher, which should reinforce a move higher if resistance levels are taken out. The market's close above the 9-day moving average suggests the short-term trend remains positive. The upside daily closing price reversal gives the market a bullish tilt. The market has a slightly positive tilt with the close over the swing pivot. The near-term upside objective is at 146.34. The next area of resistance is around 145.68 and 146.34, while 1st support hits today at 143.18 and below there at 141.34.

JAPANESE YEN (DEC) 09/22/2008: The daily stochastics have crossed over down which is a bearish indication. Momentum studies trending lower at mid range could accelerate a price break if support levels are broken. The market's short-term trend is negative as the close remains below the 9-day moving average. The gap lower on the day session chart is bearish and puts the market on the defensive. There could be some early pressure today given the market's negative setup with the close below the 2nd swing support. The next downside target is 92.99. The next area of resistance is around 94.62 and 94.88, while 1st support hits today at 93.68 and below there at 92.99.

SWISS (DEC) 09/22/2008: Momentum studies are rising from mid-range, which could accelerate a move higher if resistance levels are penetrated. The market's short-term trend is positive on the close above the 9-day moving average. More selling pressure is likely given yesterday's gap lower price action on the day session chart. The market's close below the pivot swing number is a mildly negative setup. The near-term upside objective is at 92.25. The next area of resistance is around 91.84 and 92.25, while 1st support hits today at 90.20 and below there at 88.97.

20-Sep 2008

2008-09-20T13:09:00.002+02:00

CURRENCIES COMMENTARY

FOR THE TIME BEING THE DOLLAR COMES BACK INTO FAVOR OVERNIGHT CHANGES THROUGH

Upcoming International Reports (all times CT)

09/19 German Producer Price Index 1:00 AM
09/21 Japan BOJ Minutes 6:50 PM
09/22 Canadian Retail Trade 7:30 AM
09/23 Euro-zone Industrial New Orders 4:00 AM
09/24 France Business Survey 1:45 AM
09/24 Euro-zone Balance of Payments 3:00 AM
09/24 German IFO Business Climate Index 3:00 AM
09/24 Japan Trade Balance 6:50 PM

DOLLAR: After clearly being on the ropes this week, the Dollar forthe time being has been saved. Given the euphoria in global equity markets it would seem like the trade is going to accept the idea that the "plan" will hit to the heart of the problem and therefore a certain amount of euphoria impact will probably be seen in the near term. With the US economic report slate empty today, the Dollar won't be faced with much in the way of contrary information. However, we would suggest that once the December Dollar manages a rise back above the 80.00 level, the risk and reward of fresh longs could be called into question. Certainly the bulls will have control today, but the magnitude of the optimism is fairly extensive and sometimes Washington has the capacity to take a good idea and water it down, alter its structure or perhaps even delay its implementation. In other words, voting on a long Dollar move after another upward extension this morning, is voting on the idea that the US Congress is a well oiled and efficient machine. In our opinion, to see the Dollar resume it's July through early September rally probably requires what appears to be a final financial solution and perhaps even evidence of some form of additional stimulus and that would require Congress to cancel an upcoming recess.

EURO: Just when it appeared that the Euro was poised for a win by default rally, the deck was reshuffled and the trade for the time being probably sees the Euro as a currency without the capacity to trend. In fact, we suspect that the action in the currency markets will center on the beat up currencies of the Dollar and the Canadian. However, the international currency trade might not be as willing to go home long the Dollar and short the Euro for the weekend unless there is something more concrete from Washington. Therefore, the December Euro looks to remain under pressure this morning, with close-in chart support seen at 141.32 and then again down at 140.15. In fact, we seriously doubt that the market will have the capacity to push the Euro below the 140 level, without something final on the "plan".

YEN: The yen is clearly suffering from its flight to quality status and until the pendulum shifts again, it is possible that the December Yen is poised to fall back to the next lower consolidation zone of 93.06. However, in order to send the Yen below the 93.00 level could be difficult, as the market has spent a lot of time around that zone and the economic picture in the US is anything but resolved. For the time being, euphoria looks to dominate over reason and reality.

SWISS: Live by the sword, die by the sword. The Swiss stubbornly came alive after the September low and began to exhibit its historic roots as a classic flight to quality currency. Now however, the trade is clearly exhaling the extreme anxiety that has been in place for most of the last two weeks. Therefore, one should expect the Swiss to fall directly back to the vicinity of the 88.00 consolidation lows. In fact, until the US situation hits another bump in the road, one can't rule out at least a periodic violation of the September lows.

POUND: The Pound would also seem to be poised to give back some of its recent gains, but since the Pound and the UK economy were recently presented with a bit of financial turmoil, it is possible that the pressure on the Pound tapers off quicker than the pressure that expected in other non Dollar currencies. In fact, with the UK seeing some threats of financial failures earlier this week, the reversal of fortunes in the US might help the December Pound check up at closer in support around the 177.50 level. However, like the US, the UK economy really needs to stimulate its economy and get that potentially negative reaction out of the way before one can expect a sustained upward march in the Pound.

CANADIAN DOLLAR: The problem with the Canadian today is that the weakness in the Dollar brought the Canadian quickly off the September lows and now that the crisis seems to have lifted, the Canadian windfall off a better North American outlook and the lift off a better commodity price outlook is probably going to be countervailed by the sharp recovery in the US Dollar. In short, we still think that the Canadian will make a major bottom soon, but we can't rule out another slide back to and below the 93.00 level. Traders that took our advice to be long multiple calls and short futures again, should be licking their chops for another slide below 93.00 to liquidate the short futures and further finance the long call play!

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long the October Dollar Index 79 puts for 800, *Liquidate the put at the market for a profit this morning.
2)*Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the initial short futures 92.30, which more than finances the long call play. **Re-Sold the December futures at 93.16 with an objective of 92.80. Hold the calls for a futures move to 96.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 09/19/2008: Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The close below the 9-day moving average is a negative short-term indicator for trend. It is a slightly negative indicator that the close was lower than the pivot swing number. The next downside objective is 76.82. The next area of resistance is around 78.86 and 79.36, while 1st support hits today at 77.60 and below there at 76.82.

EURO (DEC) 09/19/2008: Momentum studies are rising from mid-range, which could accelerate a move higher if resistance levels are penetrated. The close above the 9-day moving average is a positive short-term indicator for trend. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The near-term upside target is at 145.59. The next area of resistance is around 144.57 and 145.59, while 1st support hits today at 143.05 and below there at 142.54.

JAPANESE YEN (DEC) 09/19/2008: The daily stochastics have crossed over up which is a bullish indication. Momentum studies are trending higher but have entered overbought levels. The market's close above the 9-day moving average suggests the short-term trend remains positive. With the close over the 1st swing resistance number, the market is in a moderately positive position. The next upside target is 97.75. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 97.24 and 97.75, while 1st support hits today at 96.12 and below there at 95.50.

SWISS (DEC) 09/19/2008: Positive momentum studies in the neutral zone will tend to reinforce higher price action. The market's short-term trend is positive on the close above the 9-day moving average. It is a mildly bullish indicator that the market closed over the pivot swing number. The near-term upside target is at 92.67. The next area of resistance is around 92.07 and 92.67, while 1st support hits today at 90.99 and below there at 90.52.

The wrong way of trading. . . .

2008-09-19T04:49:00.000+02:00

I have been trading the financial arena for many years. Always use "Stop Loss" and use "One cancel the other", "OCO". Rule of thumb, if your guts tell you to get out, just run and don't look back. I rather lose a finger then an arm. I am here to impart on ways to made money and if you took a wrong position, just cut it. Normally, a 5% of your trading margin is a good estimate to put your stop loss and a 10% to take your profit. Trading, is not about an ego trip. Look at this trader, he is going for an ego trip and see what happened. Its' fine to lose a battle but not the war. Frankly speaking, this trader got wipe-out.

Stock Futures Trader losses it all and flips out - Watch more free videos

19-Sep-2008

2008-09-18T23:57:00.000+02:00

CURRENCIES COMMENTARY

THE DOLLAR IS POISED TO FALL SHARPLY BECAUSE A LACK OF SOLUTIONS

Upcoming International Reports

09/19 German Producer Price Index 1:00 AM
09/21 Japan BOJ Minutes 6:50 PM
09/22 Canadian Retail Trade 7:30 AM
09/23 Euro-zone Industrial New Orders 4:00 AM

DOLLAR: It shouldn't be a big surprise that the US failed to get leadership from the Fed and the US Congress during the biggest financial crisis of the century. Granted the immediate problem facing officials had to dealt with in order to prevent a systemic breakdown, but with the Dollar sliding again this morning it is clear that market attitudes have shifted and that the market is currently convinced that the US Dollar is not the place to be. In fact, the bears can suggest that the US financial crisis is already into a chain reaction mode or that ultimately the events in motion now are certainly laying the ground work for significant US slowing. As we suggested ahead of the FOMC meeting, the failure to cut rates will lump the US into the same category as the ECB, which recently was thought to be prepared to sit on their hands until the last flicker of inflation was eradicated. However, the really damaging element sitting on the back of the Dollar is the fact that the trade fears an explosion of US deficits and perhaps more importantly, many investors think that the US problem is so complicated that a solution might not be forth coming in the near future. In other words, without some major fresh and positive headline development, we suspect that the December Dollar index is poised for a quick slide below 76.46 and perhaps even back into the 75.00 to 73.00 range in the event that the Fed, Congress and foreign central banks continue to play defense, instead of offense.

EURO: As we suggested yesterday, the Euro is going to win by default and the fear that the ECB will be slow to act, is mostly forgotten. In fact, one might even suggest that the composition of the Euro (a diversified group of countries) actually serves to attract capital that is set to flee the Dollar. As suggested in the Dollar coverage this morning, the US situation appears to be a Gordian knot that isn't being unwound. In the end, the Euro is benefiting from any port in a storm psychology and not because of macro economic or interest rate differential arguments. However, in the near term the December Euro looks to be poised to return to the mid to late August Euro consolidation zone that was bound by 145.53 to 148.

YEN: While the Yen hasn't made another new high for the move this morning, that isn't surprising considering that conditions this morning are somewhat under control. However, it certainly doesn't appear as is de-leveraging, credit market turmoil and ongoing vulnerability has gone away and therefore the Yen probably remains poised to rise up into a range defined as 97.00 to 98.10. To a degree, the Yen is set to trade like the gold market. In the face of a temporary lull in anxiety, the December Yen might not have initial support until the 96.21 level.

SWISS: The Swiss continues to be a somewhat pure flight to quality play and with the gold market in the prior trading session managing its biggest gain ever, that clearly gives the current situation a pedigree as one of the most historic flight to quality events ever. In fact, we have to think that the Swiss offers an unfettered safe haven play and that the December Swiss has probably made the 92.00 level solid support and that the currency now has the capacity to streak back up to the underside of the March through July consolidation zone (just under 95.00) in the event that US stock prices resume their sharp declines.

POUND: One can't under sell the benefit of favorable UK retail sales readings this morning, as that serves to take the markets attention away from the UK financial and real estate sectors and in turn would seem to facilitate the idea that the Pound could actually be seen as a flight to quality instrument for money attempting to get away from the US. However, the Pound would seem to run into consolidation resistance somewhat quicker than other currencies at the 183.58 level.

CANADIAN DOLLAR: We are not sure what the main impetus is for the recent recovery in the Canadian, as the bounce in commodity prices or the overt slide in the US Dollar might be behind the run up. While we continue to think that the Canadian is poised to make a major long term bottom, we are not convinced this is the beginning salvo. However, in the near term the December Canadian could easily spring back to the 96.00 level in the wake of coming Dollar washout that could be seen over the coming two trading sessions. Ultimately, the Dollar slide will be stopped by coordinated global central bank intervention, as central banks can't solve the US crisis, but they can discourage a near term run against the Dollar.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
1) Long the October Dollar Index 79 puts for 800, with an objective of 3000. Risk the position to a close below 200. 2)*Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the short futures 92.30, which more than finances the long call play. **Re-Sell the December futures at 93.16 or better looking for another probe of the 92.30 level. Hold the calls for a futures move to 96.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 09/18/2008: Momentum studies trending lower at mid range should accelerate a move lower if support levels are taken out. The market back below the 18-day moving average suggests the intermediateterm trend could be turning down. The outside day down is somewhat negative. The close below the 2nd swing support number puts the market on the defensive. The next downside target is now at 76.96. The next area of resistance is around 79.07 and 80.16, while 1st support hits today at 77.47 and below there at 76.96.

EURO (DEC) 09/18/2008: Momentum studies are trending higher from mid-range, which should support a move higher if resistance levels are penetrated. The market now above the 18-day moving average suggests the intermediate-term trend has turned up. Since the close was above the 2nd swing resistance number, the market's posture is bullish and could see more upside follow-through early in the session. The next upside objective is 145.93. The next area of resistance is around 145.16 and 145.93, while 1st support hits today at 142.26 and below there at 140.13.

JAPANESE YEN (DEC) 09/18/2008: Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. The market's short-term trend is positive on the close above the 9-day moving average. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside target is 95.16. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 96.48 and 96.93, while 1st support hits today at 95.60 and below there at 95.16.

SWISS (DEC) 09/18/2008: Positive momentum studies in the neutral zone will tend to reinforce higher price action. The market now above the 18-day moving average suggests the intermediate-term trend has turned up. The market's close above the 2nd swing resistance number is a bullish indication. The near-term upside target is at 92.84. The next area of resistance is around 92.34 and 92.84, while 1st support hits today at 90.40 and below there at 88.95.

17-Sep-2008

2008-09-17T00:16:00.000+02:00

CURRENCIES COMMENTARY

THE DOLLAR LOOKS VULNERABLE TO GOLDMAN EARNINGS AND THE FOMC

Upcoming International Reports

09/16 Japan Consumer Confidence Survey 12:00 AM
09/16 German Consumer Price Index 1:00 AM
09/16 UK Consumer Price Index 3:30 AM
09/16 German ZEW Indicator of Economic Sentiment 4:00 AM
09/16 Canadian Monthly Survey of Manufacturing 7:30 AM
09/16 Japan BOJ Meeting
09/17 Japan BOJ Report 1:00 AM
09/17 UK Employment Situation - Claim Count 3:30 AM
09/17 Euro-zone Foreign Trade 4:00 AM
09/17 Swiss ZEW Investor Sentiment 4:00 AM
09/17 Japan BOJ Rate
09/18 Swiss Trade Balance 1:15 AM
09/18 Swiss Monetary Policy 3:30 AM
09/18 UK Retail Sales 3:30 AM
09/18 Canadian Leading Indicators 7:30 AM
09/18 Canadian Wholesale Trade 7:30 AM
09/19 German Producer Price Index 1:00 AM
09/21 Japan BOJ Minutes 6:50 PM
09/22 Canadian Retail Trade 7:30 AM

DOLLAR: The Dollar is currently sitting in a very precarious position, as the market clearly acknowledges the potential for a continuation of the chain reaction of failures in the US financial sector. In fact, despite recent views that the US Fed would remain on hold with interest rates today, the developments yesterday (specifically the AIG downgrade) seems to have fostered ideas that the US Fed could be forced to act today. While a number of central banks have moved to provide significant liquidity over the last 24 hours, the only really important official rate cut came from the Chinese. From the action over the last two months, the currency trade seems to favor the Dollar, but clearly there has been too much residual baggage thrown on the back of the US economy over the last three days for the bull camp to maintain control over the Greenback. With Goldman earnings and an FOMC rate decision hitting the markets today, it would seem like the Dollar bears will maintain an edge in the trade today. In fact, unless the AIG situation is contained or temporarily solved that could serve to yank the rug out from under the Dollar and send it back down toward the 77.00 level before the end of the week. Furthermore, with the German ZEW indicator actually showing an improvement in the month of September overnight and the US Fed meeting this afternoon, we think the trade will be able to push the Dollar back toward the prior session's lows ahead of the FOMC decision.

EURO: The Euro continues to hold modestly above the lows forged last week and while the December Euro at times this morning, managed to push the Euro back above the prior session's close, the Euro bulls have to be somewhat disappointed with the failure to rally the Euro in the face of better than expected German ZEW economic sentiment figures. On the other hand, one also comes away from the last several sessions, with the view that it will take very significant US financial uncertainty just to put the Euro back into favor. In fact, the Euro condition would seem to mirror that of the gold market, where extreme economic conditions are needed to make the bull case dominant. In the event that the worst case fears on the US economy even temporarily subside, that could quickly yank the rug out from under the Euro. Critical support in the December Euro today is initially seen at 139.80 but the trend in the Euro for the day should be set in the wake of the Goldman earnings release early in the session.

YEN: With another upward extension on the charts it would seem like the Yen is one of the primary flight to quality currencies. With the Japanese recognizing the threat of slowing weeks ago and moving to provide a series of stimulus plans and the Japanese economy not only geographically removed from the US, but also more tightly associated with the Chinese economy, we can understand the Yen's temporary favor. In the short term, the presence of more US financial turmoil could prompt a run up to 98.00 in the December Yen.

SWISS: The Swiss has been seen as a flight to quality currency over the last 4 trading sessions, but in the end, the magnitude of the run up in the Swiss, in the light of potentially historic events has to be somewhat disappointing to the Swiss bulls. However, like the Yen, the Swiss looks to continue to garner support from ongoing US financial market turmoil and that could in turn pave the way for a near term run up to 92.00 level in the December Swiss.

POUND: The Pound would seem to be caught in a policy pickle, as the potential need to cut interest rates continues to collide with fresh evidence of surging UK inflation. In fact, UK CPI readings for the month of August actually accelerated overnight but surprising that has prompted members of the MPC to proclaim that inflation levels in the UK will come down and that some muted economic growth is needed for the economy to get through the crisis. In other words, the BOE would seem to be acknowledging the potential need to reduce interest rates ahead and that could begin to undermine the recent bullishness toward the Pound. In short, we think the path of least resistance in the Pound is pointing downward and that rallies above 178.40 should be sold.

CANADIAN DOLLAR: The Canadian Dollar remains in a very vulnerable mode with the outlook for key Canadian commodities remaining suspect and the potential negative economic spillover from south of its borders also a key concern to currency traders. We continue to suggest that traders look to finance a longer term bull leveraged play in the Canadian with a short December futures/long 3 December Canadian 96.50 call combination.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
*Long 3 December Canadian 98.50 calls from 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the short futures 92.30, which more than finances the long call play. **Re-Sell the December futures at 93.16 or better looking for another probe of the 92.30 level. Hold the calls for a futures move to 96.00.

CURRENCIES TECHNICAL OUTLOOK:

Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 09/16/2008: Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The market tilt is slightly negative with the close under the pivot. The next downside target is 77.25. The next area of resistance is around 79.78and 80.68, while 1st support hits today at 78.07 and below there at 77.25.

EURO (DEC) 09/16/2008: Daily momentum studies are on the rise from low levels and should accelerate a move higher on a push through the 1st swing resistance. A positive signal for trend short-term was given on a close over the 9 bar moving average. The close over the pivot swing is a somewhat positive setup. The near-term upside target is at 142.21. The next area of resistance is around 141.82 and 142.21, while 1st support hits today at 140.82 and below there at 140.21.

JAPANESE YEN (DEC) 09/16/2008: The cross over and close above the 6 -day moving average is an indication the longer-term trend has turned positive. Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. The market's short-term trend is positive on the close above the 9-day moving average. Follow through buying looks likely if the market can hold yesterday's gap on the day session chart. There could be more upside follow through since the market closed above the 2nd swing resistance. The next downside target is 94.64. The next area of resistance is around 95.17 and 95.47, while 1st support hits today at 94.75 and below there at 94.64.

SWISS (DEC) 09/16/2008: Rising from oversold levels, daily momentum studies would support higher prices, especially on a close above resistance. The market's short-term trend is positive on the close above the 9-day moving average. If yesterday's gap higher on the day session chart holds, additional buying could develop this session. The market's close above the 2nd swing resistance number is a bullish indication. The next upside target is 90.02. The next area of resistance is around 89.80 and 90.02, while 1st support hits today at 89.16 and below there at 88.73.

Lehman Brothers Holding Chapter 11 Bankruptcy

2008-09-16T06:46:00.000+02:00

I received a couple of requests for a copy of Lehmans Brothers Chapter 11 Bankruptcy. Here is it. Please read it carefully and know who are their creditors. The download link is here.

Lehman Brothers Holding

yours,

GWS

16-Sep-2008

2008-09-16T00:09:00.000+02:00

CURRENCIES COMMENTARY

TODAY IS A MAJOR DECISION POINT TODAY FOR THE US DOLLAR

Upcoming International Reports (all times CT)

09/15 Euro-zone Labor Cost Index 4:00 AM
09/15 Canadian New Motor Vehicle Sales 7:30 AM
09/16 German Consumer Price Index 1:00 AM
09/16 UK Consumer Price Index 3:30 AM
09/16 German ZEW Indicator of Economic Sentiment 4:00 AM
09/16 Japan Consumer Confidence Survey 12:00 AM
09/16 Canadian Monthly Survey of Manufacturing 7:30 AM
09/16 Japan BOJ Meeting
09/17 UK Employment Situation - Claim Count 3:30 AM
09/17 Euro-zone Foreign Trade 4:00 AM
09/17 Japan BOJ Report 1:00 AM
09/17 Swiss ZEW Investor Sentiment 4:00 AM
09/17 Japan BOJ Rate
09/18 UK Retail Sales 3:30 AM
09/18 Swiss Trade Balance 1:15 AM
09/18 Swiss Monetary Policy 3:30 AM
09/18 Canadian Wholesale Trade 7:30 AM
09/18 Canadian Leading Indicators 7:30 AM
09/19 German Producer Price Index 1:00 AM
09/21 Japan BOJ Minutes 6:50 PM
09/22 Canadian Retail Trade 7:30 AM

DOLLAR: While we doubt that the US financial crisis has reached its low point, the overnight washout in the Dollar and the attempt to recover shouldn't be discounted. Clearly the US seems to have made the right decision to allow some failures, because the markets have recently fretted over the magnitude of the "US Backstop". However, one might expect a certain amount of follow through panic in the US stock market today and with the trade watching for other failures in a chain reaction type mode that could keep the Dollar generally off balance. In fact, the market is watching AIG intently and until the fate of that entity is known, many players may be expecting another shoe to drop in the US. In the mean time, there is some hope for the US economy, generated by the fact that many other markets are functioning as they should. In other words, seeing a sharp decline in oil and gasoline prices (as well as weakness in many other critical physical commodity prices) could help the US avoid a serious slowdown. The September 9th Commitment of Traders with Options report for US Dollar showed the Noncommercial position to be net long 34,204 contracts, with the Non-reportable position net long 1,579 contracts and that made the "combined" spec and fund position net long 35,783 contracts as of early last week. While the Dollar looks to start the week out sharply below the level where the COT report was marked off, it should be noted that the Dollar did manage to rally as much as 100 points above the level where the COT report was measured and that probably temporarily expanded what was already a record spec and fund long positioning. In short, the technical condition of the Dollar highlights a significantly overbought condition and that combined with rising concern for US liquidity, has at least temporarily tainted the patently bullish environment that has been in place for the Dollar since the July lows! If you think the Dollar has reached an inflection point, look to purchase October Dollar Index 81 calls.

EURO: The September 9th Commitment of Traders with Options report for Euro showed the Non-commercial position to be net short 38,973 contracts, with the Non-reportable position net long 1,319 contracts and that made the "combined" spec and fund position net short 37,654 contracts as of early last week. With the Non-Commercial Net Short position in Euro hitting a new record level at 38,973 contracts in last week's report, it goes without saying that the Euro has significant technical short covering buying capacity into the trade this week. However, unless there is a sustained flight to quality shock away from the Dollar, off the fear of an ongoing chain reaction of US financial failures, we suspect that the Euro has already reached its zenith. In fact, with the ECB President overnight continuing to pound the inflation drum, by suggesting in the face of the latest turmoil, that "Price Stability is a Prerequisite for financial stability", it is clear that the ECB is poised to remain slow in its fight against slowing. In other words, money might temporarily rush into the Euro, but in the face of further global slowing fears, money will want out of the Euro. Buy the October Euro 140.50 puts today.

YEN: Clearly the Yen is being lifted by a combination of carry trade liquidation and perhaps by fresh outright buying in the wake of the latest US bombshell. In other words, it is possible that an aggressive repatriation of money back into the Yen is providing some fresh outright buying of the currency this morning. In fact, with the Chinese cutting interest rates overnight and the Japanese clearly moving to provide government stimulus to its economy, one could suggest that the BOJ is at least attempting to get ahead of the curve in the face of slowing pressures that are being thrown off by the US economy. Near term upside targeting in the December Yen is seen at 96.45.

SWISS: While the Swiss did manage a massive gap up extension early this morning, one could have expected the Swiss to be the ultimate safe haven instrument, but instead, the Swiss has only seen a moderate influx. In fact, if the December Swiss can't manage to close above 90.00 today, that could be seen as a major disappointment.

POUND: Surprisingly the Pound has managed to sidestep the spillover from US financial sector turmoil. In fact, in the recent past the UK was thought to be tightly linked with the US financial sector, and it was also clear that UK real estate was seeing the same type of washout as was being seen in the US. Therefore, it is quite impressive to see the Pound forging gains over the last two trading sessions. We think the Pound is highly suspect in its overnight bounce back up to the 180 level, especially if the US stock market signals more turmoil ahead.

CANADIAN DOLLAR: The Canadian Dollar this morning is mostly within the last three weeks trading range, but one has to think that the path of least resistance is still pointing downward in the near term. In fact, with weak oil prices and ongoing concern toward the US economy weighing on the Canadian, we can't rule out a retest of the September lows. Traders could put on another short Canadian futures/long 3 December Canadian Dollar call play, as near term weakness could serve to totally finance the long call position.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
*Long 3 December Canadian 98.50 calls for 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Hit objective on the short futures 92.30, which more than finances the long call play. Hold the calls for a futures move to 96.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (DEC) 09/15/2008: A bearish signal was triggered on a crossover down in the daily stochastics. Daily stochastics turning lower from overbought levels is bearish and will tend to reinforce a downside break especially if near term support is penetrated. The close below the 9-day moving average is a negative short-term indicator for trend. The close below the 2nd swing support number puts the market on the defensive. The next downside objective is 78.61. The next area of resistance is around 80.04 and 80.89, while 1st support hits today at 78.91 and below there at 78.61.

EURO (DEC) 09/15/2008: The crossover up in the daily stochastics is a bullish signal. The stochastics indicators are rising from oversold levels, which is bullish and should support higher prices. A negative signal for trend shortterm was given on a close under the 9-bar moving average. If yesterday's gap higher on the day session chart holds, additional buying could develop this session. There could be more upside follow through since the market closed above the 2nd swing resistance. The near-term upside objective is at 142.60. The next area of resistance is around 142.20 and 142.60, while 1st support hits today at 140.64 and below there at 139.47.

JAPANESE YEN (DEC) 09/15/2008: The market back below the 60-day moving average suggests the longerterm trend could be turning down. The daily stochastics gave a bearish indicator with a crossover down. Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. A negative signal for trend short-term was given on a close under the 9-bar moving average. The gap lower price action on the day session chart is a bearish indicator for trend. There could be some early pressure today given the market's negative setup with the close below the 2nd swing support. The next downside objective is 92.58. The next area of resistance is around 93.63 and 94.26, while 1st support hits today at 92.79 and below there at 92.58.

SWISS (DEC) 09/15/2008: The crossover up in the daily stochastics is a bullish signal. Daily momentum studies are on the rise from low levels and should accelerate a move higher on a push through the 1st swing resistance. A negative signal for trend short-term was given on a close under the 9-bar moving average. The market's close above the 2nd swing resistance number is a bullish indication. The next upside objective is 88.92. The next area of resistance is around 88.70 and 88.92, while 1st support hits today at 88.12 and below there at 87.75.

12-Sep-2008

2008-09-12T02:07:00.000+02:00

DESPITE US RECESSION FEARS THE TRADE HAS CONFIDENCE IN THE US FED

Upcoming International Reports

09/12 France Consumer Price Index 1:45 AM
09/12 Euro-zone Industrial Production 4:00 AM
09/12 Canadian Industrial Capacity Utilization Rate7:30 AM
09/15 Euro-zone Labor Cost Index 4:00 AM
09/15 Canadian New Motor Vehicle Sales 7:30 AM
09/16 German Consumer Price Index 1:00 AM
09/16 UK Consumer Price Index 3:30 AM
09/16 German ZEW Indicator of Economic Sentiment 4:00 AM
09/16 Japan Consumer Confidence Survey 12:00 AM
09/16 Canadian Monthly Survey of Manufacturing 7:30 AM
09/16 Japan BOJ Meeting

DOLLAR:
The Dollar has managed another new high for the move overnight and even though the talking heads are pumping the prospect of a US recession, that doesn't seem to be discouraging Dollar buying interest. It should be noted that the Dollar saw an initial boost overnight, because of a New Zealand interest rate cut. However, to put things in bigger picture perspective this morning, it should be noted that despite the sharp July through September run up in the Dollar, the Dollar still remains 33% below its July 2001 highs. In other words, the Dollar has certainly forged an aggressive run up, but on a longer term basis the current rally hasn't even reached the magnitude of the 2004 to 2005 bounce. With the ECB President recently suggesting that inflation would remain a problem for the foreseeable future, it is clear that the trade thinks the ECB is failing to recognize the threat of slowing and that in turn leaves money flowing toward the US. We suspect that the trade balance readings this morning will benefit the Dollar temporarily and that near term solid support will be respected in the Dollar at 80.12.

EURO: With another range down new low for the move overnight it is clear that the flood of EU and ECB dialogue over the last 24 hours is doing nothing to alter patently bearish views toward the Euro. In fact, the ECB yesterday seemed to be suggesting that inflation was going to remain the primary problem and that a recovery was likely being pushed off into the future. In other words, the market just doesn't see the ECB to be in a position to guard against the threat of too much slowing, as they look to remain fixated on inflation fighting even though it is really clear that inflation has been at least temporarily punctured by sharply falling physical commodity prices. Next downside targeting in the Euro is 138.70 on the weekly charts.

YEN: While the Yen isn't benefiting from a specific development, it is clear that Wall Street continues to fret over the prospect of ongoing troubles at Lehman, potential troubles at AIG and the always present threat of global recession. Therefore, liquidation of the carry trade looks to continue but it is also possible that the Yen is benefiting because of the prospect that slowing in China, might actually provide the Yen with a capital flow windfall. In short, the path of least resistance in the Yen over the coming two sessions should favor the bull camp, with the Yen poised to make the 94.00 resistance level, into a 94.00 support level.

SWISS: Despite the lingering US financial sector concerns, talk of a US recession and rising fears of the coming US bank year end, the trade apparently has no interest in the long side of the Swiss. While some might suggest that the Swiss will have support at 87.00, there is a closer in support zone today at the 87.40 level. In the end, the trend looks set to remain down in the Swiss.

POUND: Without another new low for the move in the Pound this morning, it is clear that the currency remains out of favor. In fact, it almost seems as if the expectation for a recession in the US is justification for hammering the Pound. With BOE officials floating patently concerning views on the UK economy, like "the Euro zone will see quite a large increase in jobless" and "the recovery will take longer than others expect" it would seem like those in charge are very worried. In short, the Pound looks destined to slide to at least the early 2006 consolidation lows of 172.35.

CANADIAN DOLLAR: We continue to think that the Canadian is poised to make a major bottom, but we also recognize that the Canadian is going to make more lows for the move before a bottom is found. In fact, we wouldn't be surprised to see a spike down probe and return to the August 2007 spike lows of 92.05 on the weekly charts (that represents another 100 points down).

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
*Long 3 December Canadian 98.50 calls for 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Objective on the short futures 92.30, look to hold the long calls for a futures move to at least 98.00

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (SEP) 09/11/2008: The market made a new contract high on the rally. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The market's close above the 9-day moving average suggests the short-term trend remains positive. Market positioning is positive with the close over the 1st swing resistance. The next upside target is 80.53. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around 80.30 and 80.53, while 1st support hits today at 79.55 and below there at 79.04.

EURO (SEP) 09/11/2008: The daily stochastics gave a bearish indicator with a crossover down. Momentum studies are declining, but have fallen to oversold levels. The market's short-term trend is negative as the close remains below the 9-day moving average. The market setup is somewhat negative with the close under the 1st swing support. The next downside target is now at 139.22. More downside action may be limited by the RSI under 20 putting the market in extremely oversold territory. The next area of resistance is around 140.97 and 141.91, while 1st support hits today at 139.63 and below there at 139.22.

JAPANESE YEN (SEP) 09/11/2008: The close below the 60-day moving average is an indication the longer-term trend has turned down. Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The market's short-term trend is positive on the close above the 9 day moving average. The downside closing price reversal on the daily chart is somewhat negative. The swing indicator gave a moderately negative reading with the close below the 1st support number. The next downside target is now at 92.19. The next area of resistance is around 93.25 and 93.86, while 1st support hits today at 92.41 and below there at 92.19.

SWISS (SEP) 09/11/2008: A bearish signal was triggered on a crossover down in the daily stochastics. Momentum studies are declining, but have fallen to oversold levels. The close below the 9-day moving average is a negative short-term indicator for trend. The market setup is somewhat negative with the close under the 1st swing support. The next downside target is now at 87.89. The market is approaching oversold levels on an RSI reading under 30. The next area of resistance is around 88.32 and 88.53, while 1st support hits today at 88.00 and below there at 87.89.

11-Sep-2008

2008-09-11T01:05:00.000+02:00

Upcoming International Reports

09/11 Euro-zone Quarterly Balance of Payments
09/11 Canadian International Merchandise Trade 7:30 AM
09/11 Canadian New Housing Price Index 7:30 AM
09/11 Japan GDP 6:50 PM
09/12 France Consumer Price Index 1:45 AM
09/12 Euro-zone Industrial Production 4:00 AM
09/12 Canadian Industrial Capacity Utilization Rate7:30 AM
09/15 Euro-zone Labor Cost Index 4:00 AM
09/15 Canadian New Motor Vehicle Sales 7:30 AM

DOLLAR: With some US financial shares bid higher this morning one might have expected the Dollar to be showing more strength, especially in the wake of the last two months up trend pattern. Certainly the Dollar is higher in the early going and it remains within relatively close proximity to its highs, but the market seems to be somewhat caught within the prior session's trading range. In a positive development for the US economy, a major US delivery company posted better than expected earnings and cited the recent windfall of falling oil prices as the cause of the improvement and that in turn could mean that lower oil prices are indeed a reason to bid up the Dollar. With the EU suggesting that the UK economy was going to fall into a recession, in the second half of the year, one would think that the Dollar is poised to make another big upside run. However, news that Lehman has pulled forward its earnings report and will release its earnings today probably means that the Dollar will take its cue from the Lehman news. At least initially, the street seems to be bidding up some financial shares this morning and that would suggest the market expects something Dollar supportive from the Lehman earnings report. With the US economic report slate virtually devoid of scheduled data today, the Lehman news looks to be the "event" of the day.

EURO: Apparently the Euro isn't the least bit emboldened by the slight up tick in French Industrial Production readings overnight and that is surprising considering that the figures actually managed a rise of 1.2% over the prior month. Perhaps seeing the Italian GDP contract countervailed the support from the French numbers. With Trichet overnight flooding the market with a long list of statements in his testimony to the EU Parliament, it would seem like the ECB will remain focused on battling inflation, instead of addressing slowing. In other words, the trade comes away from the overnight news with the view that the Euro zone might not be the place to be in the event of a spreading global recession.

YEN: At least initially the Yen managed a fresh new high for the move in the wake of the spike in concern toward Lehman. However, with a slightly positive bid being seen in a number of US financial sector shares this morning, that has prompted a profit taking setback in the Yen in the early going. However, with the Lehman earnings report scheduled for release today, that could mean the Yen is poised for a major trend decision today. We have to favor the downside in the Yen, as the recovery rally over the last three weeks has come because of a lack of alternative investments and not because the Yen offers stellar returns.

SWISS: Once again the Swiss doesn't seem to be garnering flight to quality interest off the latest concern toward Lehman. Apparently the fear of slowing in the Euro zone has simply taken control of the Swiss and that condition probably won't change much in the event that the US investment banker woes today are contained. Therefore, traders should continue to sell rallies in the Swiss. POUND: While the Pound did show some short covering capacity yesterday, it would seem like the market retains a dismal view for the UK economy over the second half of the year. In fact, the ECB President overnight suggested that the UK economy would be in a recession in the 2nd half of the year and that seems to have applied fresh pressure to the Pound in the early going today. Down trend channel resistance in the Pound is seen at 178.67 today, and that level falls to 178.16 on Thursday.

CANADIAN DOLLAR: The Canadian doesn't appear to have a very impressive chart setup for a currency trying to bottom. In other words, the Canadian seems to have an interest in the bottom of the recent consolidation pattern and with the Dollar remaining strong, many physical commodities under pressure and the global economic outlook highly suspect, the odds of more near term weakness in the Canadian Dollar looks to be a high probability. Look for a possible decline to an even lower trading range ahead.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
*Long 3 December Canadian 98.50 calls for 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Objective on the short futures 92.50, look to hold the long calls for a futures move to at least 98.00

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (SEP) 09/10/2008: Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The close above the 9-day moving average is a positive short-term indicator for trend. It is a mildly bullish indicator that the market closed over the pivot swing number. The near-term upside objective is at 80.26. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 79.94 and 80.26, while 1st support hits today at 79.18 and below there at 78.73.

EURO (SEP) 09/10/2008: The daily stochastics have crossed over up which is a bullish indication. Daily stochastics are showing positive momentum from oversold levels, which should reinforce a move higher if near term resistance is taken out. The market's close below the 9-day moving average is an indication the short-term trend remains negative. It is a mildly bullish indicator that the market closed over the pivot swing number. The near-term upside objective is at 143.13. With a reading under 30, the 9-day RSI is approaching oversold levels. The next area of resistance is around 142.44 and 143.13, while 1st support hits today at 140.84 and below there at 139.92.

JAPANESE YEN (SEP) 09/10/2008: The cross over and close above the 6 -day moving average indicates the longer-term trend has turned up. Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The market's close above the 9-day moving average suggests the short-term trend remains positive. The market has a bullish tilt coming into today's trade with the close above the 2nd swing resistance. The next downside objective is 92.26. The next area of resistance is around 93.96 and 94.26, while 1st support hits today at 92.97 and below there at 92.26.

SWISS (SEP) 09/10/2008: The daily stochastics have crossed over up which is a bullish indication. Daily momentum studies are on the rise from low levels and should accelerate a move higher on a push through the 1st swing resistance. The market's close below the 9-day moving average is an indication the short-term trend remains negative. Market positioning is positive with the close over the 1st swing resistance. The near-term upside target is at 89.90. The 9-day RSI under 30 indicates the market is approaching oversold levels. The next area of resistance is around 89.50 and 89.90, while 1st support hits today at 88.36 and below there at 87.61.

10-Sep-2008

2008-09-09T23:38:00.000+02:00

Upcoming International Reports

09/10 France Industrial Production 1:45 AM
09/10 France Trade Balance 1:45 AM
09/10 UK Foreign Trade 3:30 AM
09/10 Japan Leading Indicators 12:00 AM
09/10 Japan Machinery Orders 6:50 PM
09/10 Japan Index of Business Conditions
09/11 Euro-zone Quarterly Balance of Payments
09/11 Canadian International Merchandise Trade 7:30 AM
09/11 Canadian New Housing Price Index 7:30 AM
09/11 Japan GDP 6:50 PM
09/12 France Consumer Price Index 1:45 AM
09/12 Euro-zone Industrial Production 4:00 AM
09/12 Canadian Industrial Capacity Utilization Rate7:30 AM
09/15 Euro-zone Labor Cost Index 4:00 AM
09/15 Canadian New Motor Vehicle Sales 7:30 AM

DOLLAR: The Dollar failed to make another new high overnight and that in conjunction with the expectation of soft US number flow this morning could result in another retest of the sub 79.00 level. Certainly the Dollar was supported by the latest flow of weak economic readings from the UK overnight and certainly the Dollar remains underpinned by the ongoing weakness in the energy markets, but we have to think that the euphoria from the US agency bailout is destined to wane and that the September Dollar Index in a sense, will begin to waffle around both sides of the 79.00 level. Detracting from the Dollar strength is the fact that the Yen is starting to show signs of strength and the Canadian is also acting like it has forged a significant bottom. In other words, the Dollar might continue to make periodically strong against the Euro and Pound, but we suspect that weak scheduled numbers from the US over the coming three trading sessions will allow some currencies to make an inroad against the Greenback. However, one has to leave the overall trend with the bull camp, as the numbers outside of the US are expected to remain soft and the prospect of a sub $100 crude oil trade is something that might rekindle bullishness toward the Dollar later this week. In the mean time, we expect the Dollar to back and fill in the face of upcoming data, but for the Dollar to eventually firm up in the Thursday/Friday time frame.

EURO: While the Euro has managed to reject a fresh new low for the move overnight, the currency did make a fresh new low and that leaves the technical picture in the Euro in an extremely vulnerable condition. In fact, with Euro zone officials overnight suggesting that inflation threats have peaked, we are surprised to see the Euro in an attempt to regain the 142.00 level. With the Euro also managing the recovery bounce in the wake of a weak foreign trade balance release for July from Germany it would seem like the trade has at least temporarily began to discount the pace of some Euro zone readings. Perhaps predictions by other ECB officials this morning that 4th quarter Euro zone GDP readings would be positive, prompted some shorts in the Euro to take profits this morning. In the near term, the Euro might bounce but we doubt that the overall down trend pattern has ended.

YEN: With an impressive spike up move overnight it is clear that the US Agency bailout has tempered global risk concerns and that in turn has prompted money to move back into the long side of the Yen. However, we suspect that the renewed confidence wave in the Yen will be extremely short lived, especially in the event that scheduled US economic data over the coming two trading session's highlights a long troublesome road ahead for US real estate and banking. In short, we can't rule out a temporary return to levels above 93.00, but we just don't see the Yen throwing off the down trend pattern that has been in place since March.
SWISS: Clearly the Swiss was excessively oversold around the prior session's lows and clearly many officials think that the US government bailout move will reduce the overall threat of global slowing. However, the US agency bailout move probably won't alter the upcoming flow of weak numbers inside and outside of the US and that in turn should leave the Swiss on a track to test the December 2007 lows down around 87.50 sometime later this week.

POUND: The Pound like a number of other currencies reached an excessively oversold technical condition around the prior trading session's lows and therefore one should not be surprised to see the Pound attempt at least a weak recovery bounce. However, with UK Industrial Production readings overnight showing another contraction (the reading was the weakest reading in almost 3 years) we doubt that the down trend pattern will be thrown off. In fact, the bull camp might be lucky just to engineer a sustained bounce back above the 177.50 level in the September contract today.

CANADIAN DOLLAR: The Canadian continues to build a thick consolidation pattern on the charts just below the 94.00 level. Clearly the Canadian has been periodically undermined by the overt strength in the Dollar and clearly the Canadian continues to be undermined by the ongoing weakness in key Canadian commodities, but we still think that the Canadian is poised to make a major long term bottom and that returns to levels back above 94.70 in the December contract should prompt traders to sell futures and buy 3 Dec Canadian 97 calls for a position play. In the event that the Canadian falls back to consolidation support of 93.11, bank profits on the futures as a way to finance part of the call play.

TODAY'S MARKET IDEAS:
None.

NEW RECOMMENDATIONS:
None.

PREVIOUS RECOMMENDATIONS:
*Long 3 December Canadian 98.50 calls for 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Objective on the short futures 92.50, look to hold the long calls for a futures move to at least 98.00

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (SEP) 09/09/2008: The market made a new contract high on the rally. The daily stochastics gave a bullish indicator with a crossover up. Momentum studies are trending higher but have entered overbought levels. The market's close above the 9-day moving average suggests the short-term trend remains positive. A positive signal was given by the outside day up. Market positioning is positive with the close over the 1st swing resistance. The near-term upside objective is at 80.93. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 80.30 and 80.93, while 1st support hits today at 78.66 and below there at 77.63.

EURO (SEP) 09/09/2008: Daily stochastics are trending lower but have declined into oversold territory. A negative signal for trend short-term was given on a close under the 9-bar moving average. The market is in a bearish position with the close below the 2nd swing support number. The next downside target is now at 139.39. With a reading under 20, the 9-day RSI indicates the market is extremely oversold. The next area of resistance is around 141.91 and 143.00, while 1st support hits today at 140.11 and below there at 139.39.

JAPANESE YEN (SEP) 09/09/2008: The major trend has turned down with the cross over back below the 60-day moving average. A crossover down in the daily stochastics is a bearish signal. Declining momentum studies in the neutral zone will tend to reinforce lower price action. The close above the 9-day moving average is a positive short-term indicator for trend. The gap lower price action on the day session chart is a bearish indicator for trend. The market setup is somewhat negative with the close under the 1st swing support. The next downside target is 91.89. The next area of resistance is around 92.91 and 93.06, while 1st support hits today at 92.33 and below there at 91.89.

SWISS (SEP) 09/09/2008: Daily stochastics declining into oversold territory suggest the selling may be drying up soon. A negative signal for trend short-term was given on a close under the 9-bar moving average. The gap lower on the day session chart is bearish and puts the market on the defensive. The market is in a bearish position with the close below the 2nd swing support number. The next downside target is 87.52. With a reading under 20, the 9-day RSI indicates the market is extremely oversold. The next area of resistance is around 88.78 and 89.21, while 1st support hits today at 87.94 and below there at 87.52.

05-Sep-2008

2008-09-05T04:23:00.000+02:00

Upcoming International Reports

09/05 UK ECRI Future Inflation Gauge 3:30 AM
09/05 Euro-zone ECRI Future Inflation Gauge 3:30 AM
09/05 France ECRI Future Inflation Gauge 3:30 AM
09/05 Germany ECRI Future Inflation Gauge 3:30 AM
09/05 German Industrial Production 5:00 AM
09/05 Canadian Labor Force Survey 6:00 AM
09/08 UK Producer Price Index 3:30 AM
09/08 German Manufacturing Turnover Index
09/08 Swiss Employment 12:45 AM
09/08 Canadian Building Permits 7:30 AM
09/09 German Foreign Trade 1:00 AM
09/09 UK Industrial Production 3:30 AM
09/09 Japan Wholesale Prices (CGPI) 6:50 PM

DOLLAR: The Dollar is showing ongoing corrective action after another new high for the move pulse up in the prior trading session. We suspect that some longs are balking at the Dollar into the Monthly Non farm payroll report, especially since the Dollar failed to hold the latest round of new highs in the wake of better than expected US numbers yesterday and also failed to benefit from more weakness in key international readings overnight. We suspect that part of the weakness in the Dollar this morning is the result of news that a series of international interest rates are going to be left unchanged. While the Dollar hasn't shown that much direct reaction to its scheduled numbers this week, the presence of the monthly employment readings always seems to have a big impact on the Dollar trade and that could mean that the September Dollar is poised to see at least a temporary setback to a prior pivot point of 77.72 over the coming 24 hours. However, given the generally bullish bias in the Dollar recently, anything even remotely favorable from the upcoming US numbers could result in a fresh upside explosion in the Dollar, especially if the Dollar corrects even further today!

EURO: With German manufacturing activity posting a very soft reading overnight and that reading coming the wake of another sharp slide in UK house prices, the theme of global slowing looks to remain in place. However, the Euro seems to have managed a temporary corrective bounce off the idea that the ECB will continue to leave rates unchanged and that in turn seems to be suggesting that the slow down in the Euro zone doesn't appear to be that severe to the ECB. However, not cutting rates should only be a temporary support to the Euro, but since that sentiment comes directly ahead of a potentially weak US employment report, the Euro probably manages to avoid another wave of selling pressure for the coming trading session. However, we would suggest that players go with a breakout system in the Euro, with the range defined as 145.24 to 144.69 but we also want to emphasize a lingering preference for the short side of the Euro.

YEN: The yen would appear to have a critical pivot point on the charts around the 92.28 level and then again down at 92.19. Some players are pointing to an up trend channel support line at 91.82, with that key level climbing to 91.92 on Friday. In the short term, the yen might continue to win by default, but we seriously doubt that the yen is poised to fully throw off the down trend pattern that has been in place since the March highs.

SWISS: The Swiss might have reached a temporary oversold status around the prior session's lows and the trade might also have become too negative toward the Swiss economy relative to the Euro zone economy. However, we doubt that the Swiss is poised to throw off its entrenched down trend pattern. On the other hand, the Swiss could certainly managed a more noted bounce in the wake of upcoming critical US economic readings and therefore traders should not be surprised to see the September Swiss manage at least temporarily return to the 91.38 level.

POUND: With the Pound managing to bounce in the face of more bad news from its housing sector, we get them sense that the currency has temporarily reached an overdone status. In fact, the market was rightly disappointed in the lack of a rate move, especially when one considers the magnitude of the UK slowing fears in the marketplace recently. Therefore, a temporary corrective bounce looks to be in order, but if the Pound isn't soaring in the aftermath of the US data Friday morning, one should expect the corrective bounce effort to come to a quick end. Near term corrective targeting on the upside is 178.20.

CANADIAN DOLLAR: The Canadian saw a relief rally in the wake of the decision to leave rates on hold yesterday. However, we would suggest that traders be poised to buy the December Canadian on dips below the 93.50 level in the coming 24 hours of trade, as we expect the economic outlook for the US to begin to improve rapidly after the upcoming US Non farm payroll report disappointment. Once the US economic outlook begins to improve, we suspect the global outlook will also improve, but that could mean a bout of extreme volatility in the Canadian over the coming 24 hours.

PREVIOUS RECOMMENDATIONS:

*Long 3 December Canadian 98.50 calls for 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Lower the objective on the short futures to 92.50 and look to hold the long calls for a futures move to at least 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report.

US DOLLAR (SEP) 09/04/2008: The daily stochastics gave a bearish indicator with a crossover down. Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. The market's close above the 9-day moving average suggests the short-term trend remains positive. The daily closing price reversal down puts the market on the defensive. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside objective is now at 77.62. With a reading over 70, the 9- day RSI is approaching overbought levels. The next area of resistance is around 78.44 and 78.9 , while 1st support hits today at 77.80 and below there at 77.62.

EURO (SEP) 09/04/2008: Daily stochastics are trending lower but have declined into oversold territory. The market's short-term trend is negative as the close remains below the 9-day moving average. It is a slightly negative indicator that the close was lower than the pivot swing number. The next downside target is 144.07. The 9-day RSI under 30 indicates the market is approaching oversold levels. The next area of resistance is around 145.13 and 145.35, while 1st support hits today at 144.49 and below there at 144.07.

JAPANESE YEN (SEP) 09/04/2008: Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The market's close above the 9-day moving average suggests the short-term trend remains positive. The market's close above the 2nd swing resistance number is a bullish indication. The near term upside objective is at 92.76. The next area of resistance is around 92.67 and 92.76, while 1st support hits today at 92.29 and below there at 92.01.

SWISS (SEP) 09/04/2008: The stochastics indicators are rising from oversold levels, which is bullish and should support higher prices. The close below the 9-day moving average is a negative short-term indicator for trend. The outside day up is somewhat positive. With the close higher than the pivot swing number, the market is in a slightlyn bullish posture. The next upside target is 90.88. The market is approaching oversold levels on an RSI reading under 30. The next area of resistance is around 90.73 and 90.88, while 1st support hits today at 90.17 and below there at 89.77.

04-Sep-2008

2008-09-04T09:01:00.000+02:00

Upcoming International Reports

09/04 German Manufacturing Orders Received 5:00 AM
09/04 UK Monetary Policy 6:00 AM
09/04 Euro-zone Monetary Policy 6:45 AM
09/05 UK ECRI Future Inflation Gauge 3:30 AM
09/05 Euro-zone ECRI Future Inflation Gauge 3:30 AM
09/05 France ECRI Future Inflation Gauge 3:30 AM
09/05 Germany ECRI Future Inflation Gauge 3:30 AM
09/05 German Industrial Production 5:00 AM
09/05 Canadian Labor Force Survey 6:00 AM
09/08 UK Producer Price Index 3:30 AM
09/08 German Manufacturing Turnover Index
09/08 Swiss Employment 12:45 AM
09/08 Canadian Building Permits 7:30 AM

DOLLAR: The Dollar continues to rise sharply despite a slight resurrection of slowing concerns within the US.Apparently the market is fixated on the idea that slowing outside of the US has significantly further progression ahead and that yields will remain highest inside the US. With the fear of recession clearly in the UK headlines, slowing fears surfacing throughout Asia and Australia and even the Canadian under aggressive attack because of sharply falling commodity prices, the US Dollar has very little resistance. In fact, even the Chinese currency is suspect, with the Chinese concerned enough to bring forth stimulus plans. With the Dollar extending on the upside in the early action today, it is possible that even lower oil and commodity prices will be seen and that in turn could solidify the idea that the US economy will indeed be the first economy to get out from under the current slow down. In the near term, the Dollar looks set to return to the 80.00 level but in the event that the Dollar manages an extended run up ahead of the Friday payroll report, we suspect that will set the stage for one of the most volatile Friday trades in the last five years.

PREVIOUS RECOMMENDATIONS:
*Long 3 December Canadian 98.50 calls for 82 and short the December Canadian futures at 95.38. Risk the combination to a net loss in excess of $1,000. *Lower the objective on the short futures to 92.50 and look to hold the long calls for a futures move to at least 98.00.

CURRENCIES TECHNICAL OUTLOOK:
Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis thatmay appear elsewhere in this report.

US DOLLAR (SEP) 09/03/2008: Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The close above the 9-day moving average is a positive short-term indicator for trend. The market has a bullish tilt coming into today's trade with the close above the 2nd swing resistance. The next
upside target is 78.75. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 78.48 and 78.75, while 1st support hits today at 77.85 and below there at 77.48.

EURO (SEP) 09/03/2008: A bearish signal was triggered on a crossover down in the daily stochastics. Daily stochastics are trending lower but have declined into oversold territory. The close below the 9-day moving average is a negative short-term indicator for trend. More selling pressure is likely given yesterday's gap lower price action on the day session chart. The close below the 2nd swing support number puts the market on the defensive. The next downside objective is now at 144.66. The 9-day RSI under 30 indicates the market is approaching oversold levels. The next area of resistance is around 145.19 and 145.27, while 1st support hits today at 144.89 and below there at 144.66.

JAPANESE YEN (SEP) 09/03/2008: Momentum studies are rising from mid-range, which could accelerate a move higher if resistance levels are penetrated. The close above the 9-day moving average is a positive short-term indicator for trend. The outside day up is somewhat positive. Since the close was above the 2nd swing resistance number, the market's posture is bullish and could see more upside follow-through early in the session. The next upside objective is 92.46. The next area of resistance is around 92.33 and 92.46, while 1st support hits
today at 91.91 and below there at 91.62.

SWISS (SEP) 09/03/2008: Daily stochastics are showing positive momentum from oversold levels, which should reinforce a move higher if near term resistance is taken out. The close below the 9-day moving average is a negative short-term indicator for trend. More selling pressure is likely given yesterday's gap lower price action on the day session chart. It is a slightly negative indicator that the close was under the swing pivot. The next upside target is 90.66. The 9-day RSI under 30 indicates the market is approaching oversold levels. The next area of resistance is around 90.57 and 90.66, while 1st support hits today at 90.23 and below there at 89.97.