Weekly Markets Update

25 avril 2010 [WEEKLY MARKETS UPDATE]
Weekly Markets Update
1 Weekly Markets Update| SFM Finanz , S. Optyker, C. Guizelli +41.21.566.16.22 Mob: +41.79.202.19.58 & +41 79.673.64.61
Fundamental Outlook:
Risk correction fails to materialize, so far

Last Friday's sell-off in risky assets suggested this past week might see a broader correction lower in risk, but it only lasted a few hours at the
start of this past week. Markets quickly shrugged off the fraud indictment of a US investment bank and took some solace in ongoing US
corporate earnings surprises (more below). Greece funding concerns weighed on the EUR and risk appetites most of this past week, but news
on Friday that Greece has requested access to the EU/IMF loan package has allowed a mild relief rally to unfold. Whereas last week risky assets
(stock, commodities, JPY-crosses) finished out at the bottom of recent ranges, this past week sees them closing nearer to recent range highs.
The key word here is 'range' and we're still stuck in them. The most puzzling development of this past week is not that we're back at recent
range highs, but that we're not above them.
Incoming economic data has mostly been surprising to the upside (e.g. better ZEW, Eurozone PMI's, IFO, US durable goods and housing
reports) and would seem to suggest the global recovery is gaining momentum, which should have seen risk assets test higher. That's the dog
that isn't barking. Perhaps we're just impatient and the market needs more time to digest recent news before the risk rally can extend, but it
certainly feels as though markets are at a critical inflection point. In last week's update, we outlined many of the market internals that
supported a correction lower in risk, and those factors may still see that downside scenario play out. In light of this week's developments,
though, we have to focus on the upside potential for risk trades, and we will be ever-mindful of recent range highs (especially USD/JPY 95.00,
AUD/JPY 87.50, and S&P 500 1227 61.8% retracement).
Looking ahead to next week, talk is that a deal may be struck as soon as this weekend among US lawmakers hashing out financial regulatory
reform. US banks don't seem to be in line for serious punishment, at least not according to the KBW Bank index, which is set to close at its
highest level yet in the current rally. Details of any FinReg deal will be important, so we'll stay flexible on this. Also likely over the weekend
will be loads of Greece supportive comments coming from G-20/IMF/World Bank officials meeting in Washington. As of Friday's close, Greek
CDS's (and other Eurozone peripheral nations') show little sign of buying into the rescue package as the end of the funding concerns, so we're
also wary about the bounce in EUR(more below). We don't expect any material changes from the Fed when they release their statement on
Wednesday. On Friday, markets seemed to latch on to talk that the Fed might begin selling some balance sheet assets in the near future,
sending US Treasuries lower and yields higher, supporting USD/JPY. However, we don't think any asset sales are imminent in light of recent
Bernanke comments suggesting he thinks the Fed's balance sheet holdings are appropriate. As always, we'll be alert for any additional credit
tightening moves out of China. Lastly, next week will be month-end, and we fully expect the usual disjointed moves around the month-end
fixings. Overall, with US stocks having gained for the month, USD-selling is likely to be dominant as asset managers rebalance currency hedges.
Weaker Q1 GDP may give the Tory party, and GBP a short-term boost
At just +0.2% q/q, UK Q1 GDP expanded at only half the expected pace. Unsurprisingly the data knocked sterling lower. It will also have
knocked the spirits of the incumbent labour government which has been spinning the line that its careful management has helped steer from
the worst recession in living memory. Opinion polls released earlier in the week indicated that the preferred election outcome as far as the
market was concerned was for a majority government of any persuasion. If the poor GDP data help the Tory party extend its lead in the
weekend opinion polls then sterling could regain its losses. Exit polls following the latest televised debate from the leaders of the three main
political parties imply that the Tory's Cameron and the Lib-Dem's Clegg both performed equally well. Overall, polls suggest while more people
appear likely to vote for the Tory party on May 6, the surge in popularity of Clegg over the past week means that the election could be a three
horse race. While a hung parliament would not be a surprise for the market, fears that this would lead to more inter-government bickering,
which could delay action on budget deficit reduction, would reduce the chances of a significant and sustained sterling recovery this year.
Greece enters the next phase of its funding crisis

Greece has entered into the next phase of its funding crisis and admitted that it needs to accept loans from the EU and the IMF in order to avoid
default in the coming months. The markets initially warmed to the announcement that the Greek government had given up pretending that it
could still sell its debt on the open market. However, since Greek bond yields had several weeks ago risen above levels at which the
government could realistically afford to issue, Greece's decision was inevitable. It is also nothing to celebrate. The risk of default this year had
been effectively cancelled out earlier in the month when the EU made it clear that funds were on offer. The risk of default next year or after the
next recession can only be cancelled out when Greece can prove that it can live within its means. This week the EU warned that the 2009
budget deficit could be as large as 14% of GDP. With this in mind, the fear of the Greek people is that more austerity measures will be piled on
top of those which have already been announced. The civil unrest that has been sparked by these austerity measures suggest that there is still
a risk that Greece will be unable to tolerate further budget slashing measures. This implies that the risk of default may merely be delayed.
While official rhetoric continues to suggest that default or an exit from EMU (and a competitive devaluation) are not on the table, the market is
likely to stay skeptical until such time that the Greek budget deficit begins to show signs of improvement. Insofar as budget reform is a lengthy
process, downside pressure on the EUR could persist for months. Pressure on the EUR may also appear from other parts of the EMU. The Irish
government announced a blood curdling austerity budget at the end of last year which involved 20% pay cuts for some public sector workers.
The Irish will now be asked to contribute to the Greek bail-out as will Portugal and Spain. Germany may have an opportunity to express its
sentiments on Chancellor Merkel's recent caving in on the topic of EMU bailout at the May 9 regional elections. Given prospects for only weak
growth in EMU this year, the risk of disgruntlement on the topic of the Greece aid is high. EUR/USD may still have a long way to fall.
US corporate earnings well ahead of expectations
This past week was a busy one for US earnings reports. We have now seen just about 30% of the S&P 500 report 1Q10 results and the
outcomes remain encouraging. Bottom-line earnings (the well advertised EPS numbers) are coming in 22% above the consensus estimates and
48% higher than 1Q09 to boot. This compares with a beat of roughly 5% for the 4Q09 reporting period when earnings rose nearly 100% from
the financial crisis driven 4Q08 period.
More importantly is the fact that sales numbers (or top-line results) have come in 3% higher than what the market had anticipated. This
includes an 8% beat for the financial sector where just about half of the 76 companies have reported. This semblance of organic growth
dovetails with what we saw in 4Q09 when sales beat by about 1.5% after a few very difficult quarters.
The positive earnings results along with what was another very strong durable goods report (the core business spending number that feeds
into GDP was up 4% on the month) suggest businesses will continue to add a considerable amount to US economic growth. The better tone to
business spending should continue to put downward pressure on the unemployment rate as employers look to add jobs in order to take the
pressure off of the current workforce - which has ratcheted up productivity to a near 6% annual rate! In the near-term, these trends should
continue to drive equity markets and interest rates higher.
The areas investors would do well to be in should 2010 correlations remain intact are long both AUD/JPY and CAD/JPY. Both have moved
about 95% of the time with equities and 85% of time with US rates. CAD/JPY looks to have formed a nice inverted head and shoulders on the 4-
hour charts and we will look for a break north of 94 to elicit considerable upside here. Meanwhile, AUD/JPY continues to find formidable
resistance into 87.50 and thus we will look for a break through there before becoming overly optimistic.
Key data and events to watch next week

The calendar in the United States kicks off with the Case-Shiller home price index and consumer confidence on Tuesday. Wednesday is the
highlight of the week with the FOMC rate decision and press statement. We expect the Fed to stand pat on rates but the potential for a shift in
the statement is non-trivial. The usual initial jobless claims numbers are due Thursday while the first cut of 1Q GDP, Chicago PMI and the
University of Michigan confidence index are due Friday.
The data flow slows down in the Eurozone next week but keep in mind that headline risk with regards to the Greek bailout could be quite
prevalent. Tuesday kicks it off with French consumer confidence, German GfK confidence and German import prices. German CPI is due on
Wednesday while Thursday brings Eurozone consumer confidence and German employment. Eurozone employment and French PPI round out
the week on Friday.
It is extremely light in the UK next week with home loans on Tuesday and consumer confidence on Thursday the only noteworthy releases.
Japan has a busier than usual week ahead. Tuesday starts the week with retail trade. On Thursday we'll see manufacturing PMI, employment,
consumer prices and industrial production. Friday closes out the week with the BoJ rate decision and housing starts.
Canada is characteristically light. Home prices are up on Wednesday while monthly GDP is due Friday. Look for BOC Governor Carney to speak
on Thursday as well.
It is pretty busy down under. Australia sees PPI and business confidence on Tuesday, CPI on Wednesday, leading indicators on Thursday and
new home sales on Friday. The highlight in New Zealand is the RBNZ rate decision on Wednesday. The bank is expected to leave rates on hold
at 2.5% until its July meeting.
EURUSD
The Technical out look for the EUR/USD Sunday, April the 25th, 2010, level 1.3377
Position Strategy: current position FLAT,

Enter SHORT on a break of 1.3202 or near 1.3437/44 stop 1.3354 or 1.3590 target 1.3111/47 first for 1.3000 next
Enter LONG on a break of 1.3584 with a stop 1.3355 target 1.3566
The EUR/USD has dropped to as low as 1.3202 last week before recovering strongly. As noted before, the break of 1.3267 confirm that the
correction from 1.3266 have completed with three waves up to 1.3692 already and we are in now in the resumption of the down trend and
further decline is expected between 1.3111/47, the 61.8% projection of 1.4578 to 1.3443 from 1.3815 at 1.3111 or the 150.0% projection of
1.5143 to 1.4217 from 1.4578 at 1.3147. While recovery from 1.3202 might continue, we expect upside to be limited by first by 1.3437/44
levels, the long term trend indicator (the light green line on the chart) and Fibonacci retracement, secondly by 1.3493 and bring fall
resumption. But as said previously there is no sign of bottoming: it’s only a correction of the bear trend. The first sign of bottoming will be a break
of 1.3447 and 1.3584 will be the second and 1.3692 the confirmation. On the downside, break of 1.3201 will target 1.3111/47 and then to the 1.3
psychological level The trading strategy will be to sell on rally (1.3437/44) or on a break of 1.3202
Furthermore in an Elliott Wave point of view, in the bigger picture, the break of 1.3267 support confirms that whole medium term decline
from 1.5143 has resumed. As discussed before, the three wave consolidation from 2008 low of 1.2329 has completed at 1.5143 already and fall
from there is resuming whole down trend from 2008 high of 1.6039. We'd expect fall from 1.5143 to break through 1.2329 low eventually. On
the upside, break of 1.3692 resistance is needed to be the first signal of bottoming. Otherwise, outlook will remain bearish and the EURO IS IN
A BEAR TREND as far that 1.4217 is not broken up
In the long term picture, long term up trend from 2000 low of 0.8223 has made an important top at 1.6039 in 2008. Subsequent price actions
are so far viewed as a correction only, in form of three waves. First wave has completed at 1.2329 while secondly should have completed at
1.5143. Fall from 1.5143, as the third wave of correction, is in progress and should extend to 1.1639 support, and possibly further to 100%
projection of 1.6039 to 1.2329 from 1.5143 at 1.1424. Nevertheless, we'd expect strong support from 61.8% retracement of 0.8223 to 1.6039
at 1.1209 to conclude the correction and bring another long term up trend.
USD/CHF:
The technical outlook for USD/CHF Sunday, April the 25th, 2010, level 1.0728
Position Strategy: Current position FLAT

Enter LONG on a break 1.0850 or near 1.0695/1.0664 stop 1.0750 or 1.0556target 1.0897 /1.0911
Enter SHORT on a break 1.0556 stop 1.0664 target 1.0435
USD/CHF surged to as high as 1.0849 last week before treating. The development suggests that correction from 1.0898 has already completed
with three waves down to 1.0434 already. Retreat from 1.0849 is expected to be brief and should be contained first by 1.0695 Fibonacci
retracement and by 1.0664 Fibonacci retracement and long term trend indicator( light green line on the chart) and will bring another rise to
retest 1.0898 resistance. Only a break of 1.0556 will indicate that a top is in place at 1.0849. Decisive break of 1.0898 will confirm that whole
medium term rise from 0.9916 has resumed and will pave the way to 61.8% projection of 0.10131to 1.0898 from 1.0506 at 1.0911 a break of
this level should then target 100% projection of 1.0131 to 1.0897 from 1.0434 at 1.1200 next.
Furthermore in an Elliott wave point of view, the bigger picture, the three waves corrective structure of the fall from 1.0897 to 1.0434 affirmed
the view that whole rally from 0.9916 is still in progress. USD/CHF's strong break of medium term falling trend line also affirms the view that
whole correction from 1.2296 has completed with three waves down to 0.9916. Break of 1.0898 will confirm rally resumption and we should
then be seeing another medium term rise towards 1.1963/2296 resistance zone. On the downside, though, break of 1.0434 will invalidate this
view and turn outlook mixed. Furthermore, we're neutral in the long term outlook for the moment and would wait for further evidence from
the markets before taking a stance.
EUR/CHF:
The technical outlook for EUR/CHF Sunday, April the 25th, 2010, level 1.4354
Position Strategy:
Current position : SHORT at 1.4309 stop 1.4387 target 1.4143 first for 1.4005next
Enter LONG if we break 1.4387 with a stop 1.4310 target 1.4466.
Despite dipping to 1.4292 briefly, there was no follow through selling and EUR/CHF recovered back into familiar range. Outlook is turned
neutral again and more choppy sideway trading might be seen. On the downside, break of 1.4292 will argue that rebound from 1.4143 is
completed at 1.4465 already and turn bias to the downside for this support first. On the upside, a move above 1.4386 will suggest that stronger
recovery might be seen and another high above 1.4466 would be seen before corrective rise from 1.4143 completes. But after all, we'd
continue to expect strong resistance near to 1.4557 support turned resistance to limit upside and bring fall resumption sooner or later.
Furthermore in an Elliott wave point of view, the bigger picture, the strong break of 1.4135 (2008 low) confirms that whole long term down
trend from 1.6287 has resumed. Next medium term target will be 61.8% projection of 1.6368 to 1.4315 from 1.5138 at 1.3869. On the upside,
break of 1.4557 spike low resistance is needed to be first signal of bottoming. Otherwise, medium term outlook will remain bearish.
In the long term picture, fall from 1.6827 should be resuming whole down trend from 1993 high of 1.8234. We'd expect such down trend to
extend towards 100% projection of 1.8234 to 1.4391 from 1.6827 at 1.2984 in the longer run.
GBP/USD:
The technical outlook for GBP/USD Sunday, April the 25th, 2010, level 1.5375
Position Strategy: Current position: Flat,

Enter SHORT near 1.5618 or on a break of 1.5190 stop 1.5650 or 1.5295 target 1.5042 first for 1.4780 next
The GBP/USD dipped to as low as 1.5192 last week but recovered since then. Initial bias remains neutral this week and more sideway trading
might be seen. Another rise cannot be ruled out yet. However, upside is expected to be limited by 50% retracement of 1.6456 to 1.4780 at
1.5618 to conclude the whole three wave consolidation from 1.4780 and bring down trend resumption. On the downside, a move below 1.5192
will argue that such consolidation from 1.4783 is completed and will flip intraday bias to the downside for retesting 1.4780 low first. A break o
this last level will confirm that whole decline from 1.6456 has resumed for 1.4364/37 (200% projection of 1.6875 to 1.5829 from 1.6456 at
1.4364 or 61.8% projection from 1.6456 to 1.4783 from 1.5381 at 1.4337and 76.4% retracement from 1.3500 to 1.6875 at 1.4337).
Furthermore in an Elliott wave point of view, the bigger picture, there is no change, we're holding on the bearish view that medium term
rebound from 1.3503, which is treated as a correction to down trend from 2.1161, has completed at 1.7043 already. Fall from there is
tentatively treated as resumption of the down trend from 2.1161 and should target a new low below 1.3503. On the upside, break of 1.5815
resistance is needed to invalidate this view. Otherwise, outlook will remain bearish.
In the longer term picture, the corrective nature of the multi-decade advance from 1.0463 (1985 low) to 2.1161 as well as the impulsive nature
of the fall from there suggests that GBP/USD is now in an early stage of a long term down trend. Rebound from 1.3503 should have completed
and the whole fall from 2.1161 is likely resuming for 61.8% projection (2.1161 to 1.3503 from 1.7043) at 1.2310 next.
AUD/USD
The technical outlook for AUD/USD Sunday, April the 25th, level 0.9272
Position Strategy: Current position FLAT, have been stopped on SHORT position from 0.9189 at 0.9257
Enter LONG if we break 0.9327 with a stop 0.9189 target 0.9836 next
The AUD/USD's consolidation from 0.9380 continued last week but after all it's still contained inside near term rising channel, green line on
the chart. But last week the AUD/USD rally after braking of the support at 0.9190 and closed over the minor support at .9263, now further
rally is still in favor and decisive break of 0.9404 high will confirm medium term rally resumption. On the downside, however, now a break of
0.9157 support will indicate that rise from 0.8577 has completed and deeper decline should be seen to 0.9001 support and below.
Furthermore in an Elliott wave point of view, the bigger picture, the AUD/USD is still trading well inside the rising channel, green line on the
chart, with the lower band now at 0.9198 and rise from 0.6008 should still be in progress. A break again of 0.9327 resistance will affirms the
view that rise from 0.8577 will resume such rally and break of 0.9404 will confirm. If we treat the rise from 0.8577 as the fifth wave in the rise
from 0.6008 with equal length as the first wave from 0.6008 to 0.7267, upside target will be 0.9836, which is close to 2008 high of 0.9849. On
the downside, break of 0.9001 support will, however, suggests that AUD/USD's rally might have completed prematurely and would turn focus
back to 0.8577 support instead.
In the longer term picture, long term correction from 0.9849 has likely completed at 0.6008 already, after being supported slightly above
76.4% retracement of 0.4773 (01 low) to 0.9849 (08 high). Rise from 0.6008 is possibly developing into a new uptrend which will extend the
long term rise from 0.4773. We'll continue to favor the long term bullish case as long as 0.7702 cluster support holds and expect an eventual
break of 0.9849 high. However, a break of 0.7702 support will firstly argue that whole rise from 0.6008 has completed. Secondly this will open
up the case that AUD/USD is in phase of a long term consolidation and will gyrate in the large range of 0.6008/0.9849 for some time.
USD/JPY
The technical outlook for USD/JPY Sunday, April the 25th, 2010, level 93.95
Position Strategy: Current position LONG at 93.63 stop 93.29 target 94.68 for 97.06 next
Enter SHORT at 91.66 with stop 0.9257 target 89.67
USD/JPY's correction from 94.68 was supported by 61.8% Fibonacci retracement from 94.68 to 89.75 at 91.66 and rebounded strongly since
then. Initial bias remains on the upside this week for a test on 94.68 resistance first. Break there will confirm that whole rally from 88.13 has
resumed and should target 100% projection of 84.81 to 93.74 from 88.13 at 97.06 next. On the downside, below 93.33 minor support will
delay the bullish case and bring more sideway trading first. But after all, downside should be contained by 91.66 support and finally bring rally
resumption.
Furthermore in an Elliott wave point of view, the bigger picture, current development suggests that whole down trend form 124.13 is
completed at 84.81 on bullish convergence condition in daily AO and Stochastic. We'd expect stronger rally towards 101.43/65 medium term
resistance zone for confirming this bullish case. On the downside, break of 88.13 support is needed to indicate that rebound from 84.81 is
finished. Otherwise, outlook will remain bullish.
In the long term picture, downside momentum is clearly diminishing and bullish convergence condition in weekly oscillators; the long term
down trend in USD/JPY might have reversed. Focus now turns to 101.43/65 medium term resistance zone and decisive break there will also
break the lower high lower low pattern since 124.13. This will suggest that a long term bottom is in place and another rising leg of the sideway
pattern that started at 79.75 in 1995 should then be in progress for upper side of the range at 147.68.
EUR/JPY
The technical outlook for EUR/JPY Sunday, April the 25th, 2010, level 125.7
Position Strategy: Current position : LONG at 125.63 stop at 124.55 target 127.67/91 first for 128.41next
The EUR/JPY dipped to 123.15 last week but was supported above near term rising trend line, light brown line on the chart, now at 123.25 and
turned sideways. While Friday's rebound was strong, EUR/JPY and broke the 125.60 resistance now turn support and went as far as 126.05.
But the rally is still limited well below 127.67/91 resistance zone, outlook remain mildly bullish to neutral. Some more sideway trading could
be seen initially this week first. On the upside, note that decisive break of 127.91 will confirm that whole rise from 119.64 is still in progress
and has resumed for the upper band of t the descending channel now at 128.41. On the downside, note that break of 123.14 support will now
indicate that choppy rise from 119.64 is possibly a correction in the larger down trend only and has completed at 127.91 already. Focus will
then be shifted for 121.05 support for confirming the bearish case.
Furthermore in an Elliott wave point of view, the bigger picture, price actions from 112.10 are treated as correction to long term down trend
from 2008 high of 169.96, no doubt. Question is whether such correction is completed at 139.21 already and another rise would still be seen.
The momentum of the rise from 119.64 is not strong enough to confirm the bullish case yet and we'll stay neutral. On the upside, another rise
above 127.91 will reaffirm the bullish case that rise from 112.10 is resuming for another high above 139.21 before completion. On the
downside, break of 121.05 support, however, will revive that case that EUR/JPY has already topped out in medium term at 139.21 and will
pave the wave for another low below 112.10 instead.
In the long term picture, the uptrend from 88.96 (00 low) was completed at 169.96 and made a long term top there. Fall from 169.96 should
develop into a three wave correction with first wave completed at 112.10. Second wave from 118.10 might still be in progress but after all,
we'd expect another long term fall to 118.10 and beyond after the third wave starts.
GBP/JPY
The technical outlook for GBP/JPY Sunday, April the 25th, 2010, level 144.45
Position Strategy:Current position : Flat

Enter SHORT on a break of 142.42 or near 144.80/145.05 stop 142.30 or 145.30 target 140.08 first for 134.53/33 next
Enter LONG on a break of 145.10 stop 143.27 target 150.68/151.23 first for 163.05 next
The GBP/JPY dropped sharply to as low as 139.36 last week but rebounded strongly since then. Nevertheless, upside is still limited below
145.04 resistance and hence, consolidation from there might still continue. Below 142.42 minor support will flip intraday bias back to the
downside for the 38.2% retracement of 132.13 to 145.04 at 140.08 first and to 61.8% retracement of 132.13 to 145.04 at 137.04 next and
possibly further to 134.53/134.33 support zone. On the upside, however, decisive break of 145.04 will confirm that rise from 132.13 has
resumed and should then target 150.68 resistance next.
Furthermore in an Elliott wave point of view, in the bigger picture, the choppy fall from 163.05 might have completed with three waves down
to 132.13 already and the corrective structure in turn argue that whole medium term rally from 2009 low of 118.18 is still in progress.
However, upside of the current rise from 132.13 is still limited by the near term falling channel and well below 150.68 resistance thus there is
no confirmation yet. We'll turn neutral first. On the upside, above 145.04 again will affirm the bullish case and the rise from 132.13 is
resuming medium term rally from 118.18. Sustained trading above 61.8% retracement of 163.05 to 132.13 at 151.23 will affirm this case and
set the stage for another high above 163.05. On the downside, however, break of 134.53/33 support zone will revive the case that GBP/JPY has
topped out at 163.05 and will turn outlook bearish again for 118.18.
In the longer term picture, fall from 251.09 is treated as resumption of multi decade down trend. Note that the fall from 215.87 is not treated
as the fifth wave, but the third wave inside the third wave that started at 241.35. Another long term decline is still expected after completion of
the correction from 118.81.
USD/CAD
The technical outlook for USD/CAD Sunday, April the 25th, 2010, level 0.9990
Position Strategy: Current position Flat,

Enter SHORT near 1.0162 now with a stop at 1.0214 target 0.9830 or on a break of 0.9929 stop 1.0005 target 0.9830 first for 0.9444 next
Enter LONG on a break of 1.0214 stop 1.0005 target 1.0302
The USD/CAD's down trend resumed last week and edged lower to 0.9929 before recovering. Initial bias remains neutral this week as
consolidation from 0.9929 might continue. Nevertheless, upside is expected to be limited well below 1.0214 resistance and bring fall
resumption or the upper band of the descending channel now at 1.0162, green line on the chart. Break of 0.9929 will target 61.8% projection
of 1.1723 to 1.0205 from 1.0779 at 0.9841, which is close to 0.9823 support. On the upside, note that decisive break of 1.0214 resistance is
needed to indicate that USD/CAD has bottomed. Otherwise, outlook will remain bearish.
Furthermore in an Elliott wave point of view, In the bigger picture, whole medium term fall from 1.3063 is still in progress. It's unclear
whether such fall is resuming the long term down trend from 1.6196 (2002 high) or it's part of a consolidation pattern that started at 0.9056
(2007 low). In either case, fall from 1.3063 is now expected to continue towards 100% projection of 1.3063 to 1.0784 from 1.1723 at 0.9444
next. On the upside, break of 1.0779 resistance is needed to confirm medium term reversal. Otherwise, outlook remains bearish even in case of
strong rebound.
In the longer term picture, while long term down trend from 1.6196 (2002 high) has made an important low at 0.9056, the sustained trading
below the long trend indicators now at 1.0153, green line on the chart, again argues that the long term trend has not reversed yet. Fall from
1.3063 is either resuming the long term down trend or is part of a sideway consolidation pattern that started at 0.9056 (2007 low). We'll stay
neutral for the moment until the fall from 1.3063 finally confirms whether it's impulsive or corrective in nature.
GOLD
The technical outlook for GOLD: Sunday, April the 25th, 2010, level 1156.1
Position Strategy: Current position Flat, have been stopped on my SHORT from 1138.3 at 1150.6
Enter SHORT on a close below 1135.2 stop 1150.6 target 1024.3 first for 1084.8 next
Gold's choppy recover from 1124.3 continued last week and reached as high as 1157.9. Further rise would probably be seen initially this week.
However, since the recovery from 1124.3 is looking corrective in nature, we'd expect upside to be limited by 1170.7 resistance and bring one
more fall to continue the whole consolidation. Below 1135.2 minor support will flip intraday bias back to the downside for 61.8% retracement
if 1084.8 to 1170.7 at 1117.6 and will bring deep fall towards 1084.8 support.
Furthermore in an Elliott wave point of view, the bigger picture, the lack of impulsive structure of the rise from 1044.5 so far suggests that it's
the second leg of the whole consolidation pattern that started at 1227.5. At this moment, there is no confirmation that rise from 1044.5 is
completed yet and another rise might still be seen. However, even in that case, strong resistance should be seen above 100% projection of
1044.5 to 1145.8 from 1084.8 at 1186 to complete the rise and bring the another fall to retest 1044.5 before consolidation from 1227.5
completes. Meanwhile, break of 1084.8 support will indicate that the third falling leg has likely started and will then target a new low below
1044 before completing consolidations from 1227.5.
In the long term picture, rise from 681 is treated as resumption of the long term up trend from 1999 low of 253 after interim consolidation
from 1033.9 has completed in form of an expanding triangle. Next long term target is 100% projection of 253 to 1033.9 from 681 at 1462 level.
We'll hold on to the bullish view as long as 931.3 structural support holds.
CrudeOIL
The technical outlook for OIL Sunday, April the 25th, level 85.02
Current position : LONG at 85.02 stop 83.70 target 86.39

Enter SHORT on a break 81.73 stop 82.9 target 80.37 first for 76.22 next
Crude oil's rebound from 80.53 resumed towards the end after initial setback and closed strongly at 85.02. Further rise would be in favor to
retest 87.00/09 the 61.8% projection of 69.50 to 83.16 from 78.56 at 87.00 and 6 April high but after all, sustained break there is needed to
confirm rally resumption. Otherwise, another fall would still be seen before consolidation from 87.09 concludes. On the downside, below 81.73
minor support will flip intraday bias back to the downside for 38.2% retracement of 69.50 to 87.09 at 80.37 or possibly further to 61.8%
retracement at 76.22.
Furthermore in an Elliott wave point of view, in the bigger picture, that medium term rise from 33.20 is viewed as a correction to the whole
correction that started at 2008 at 147.27. Our preferred view is that rise from 33.2 is in form of a three wave structure (73.23, 65.05, ?) and
should be near to completion. Strong resistance is expected around 90 psychological level, which coincide with 50% retracement of 147.27 to
33.2 at 90.24 and 61.8% projection of 33.2 to 73.23 from 65.05 at 89.79, and bring reversal. Hence, even though another rally cannot be ruled
out, upside potential should be limited. On the downside, break of 69.50 support will break the series of higher low pattern from 33.2 and will
be an important indication that the trend has reversed. In such case, we'll turn bearish on crude oil.
In the long term picture, there is no change in the view that fall from 147.27 is part of the correction to the five wave sequence from 1998 low
of 10.65. While the rebound from 33.2 is strong and might continue, there is no solid evidence that suggest fall 147.27 is completed and we still
prefer the case that rebound from 33.2 is merely a corrective rise only. Having said that, strong resistance should be seen between
76.77/90.24 Fibonacci resistance zone and bring reversal for another low before completing the whole correction from 147.27.
DOW JONES INDU. Future June 2010
The technical outlook for DJI: Sunday, April the 25th, 2010, level 1142.6
Current position LONG at 10381.4 stop profit 10915 target 11211.75
The Dow rally last week and reached as high as 11151.15 and we are now trading above the target at 11135.9 and by the way confirm the rally
resumption and we are heading now to the next target at 11211.75. On the down side, the lower band of the ascending channel now at
11000.70, green line on the chart will bring support and a close under 10917.15 support will be the primary sign of top in place.
Furthermore in an Elliott wave point of view, the count suggests that the bear market ended in Mar 09.The anticipated 50% retracement rally
was actually the start of a new 70-80 year super cycle bull market. The three waves up are only Major waves 1-2-3 of Primary wave I of Cycle
wave I of this bull market. The downtrend from 10723.4 to 9789.9 is wave 4 conclude with alternation with the Jun/July downtrend, and hold
the 10% correction, and we are now Major wave 5.Following our count: we are perhaps still in 3 of 5 of I and with the clear of 11135.9 we may
reach 11211.77. For remember Wave I is the start of a super bullish super cycle of 50-70 years and will be followed by a wave II in correction that
may be very profound.
TRACK from April

RECORD 16th, 2010
Current Closed P&L
Currency Long/Short Open price Price Stop Target Open P&L pips Pips Total P&L pips
EUR/USD Flat 0 197 197
CHF/USD Flat 74 74
EUR/CHF Short 1.431 1.4354 1.4387 1.4143 -44 -44
GBP/USD Flat 0 -57 -57
AUD/USD Flat 0 -117 -117
USD/JPY Long 93.63 93.95 93.3 94.68 32 130 162
EUR/JPY Long 125.63 125.7 124.55 127.67 7 151 158
GBP/JPY Flat 0 203 203
USD/CAD Flat 66 66
TOTAL -5 647 642
Current Open P&L
Markets Long/Short Open price Price Stop points Close P&L pts Total P&L pts
Gold Flat 0.00 -12.3 -12.30
Oil Long 85.02 85.12 0.10 1.4 1.50
Dow Jones Long 10381.4 11142.6 10915 11211.75 761.20 761.20
Economic Calendar
Monday, Apr 26, 2010

GMT Ccy Events Consensus Previous
14:30 USD Dallas Fed Manufacturing 9.5% 7.2%
Activity Apr
Tuesday, Apr 27, 2010

01:30 AUD PPI Q/Q Q1 0.6% -0.4%
01:30 AUD PPI Y/Y Q1 -0.6% -1.5%
01:30 AUD NAB Business Confidence Q1 -- 18
05:00 JPY Small Business Confidence Apr -- 45.8
06:00 EUR German GfK Consumer 3.2 3.2
Confidence Survey May
06:00 EUR German Import Price Index Y/Y 4.2% 2.6%
Mar
06:00 EUR German Import Price Index 1.1% 1.0%
M/M Mar
06:00 CHF UBS Consumption Indicator -- 1.199
Mar
06:45 EUR French Consumer Confidence -33 -34
Indicator Apr
07:30 EUR Italian Consumer Confidence 106.3 106.3
Index s.a. Apr
08:30 GBP BBA Loans for House Purchase 38 000
Mar
10:00 GBP U.K. CBI Distributive Trades -- 13
Apr
13:00 USD S&P/Case-Shiller Composite-20 -0.15% 0.32%

s.a. M/M Feb
13:00 USD S&P/Case-Shiller Composite-20 0.8% -0.7%
Y/Y Feb
13:00 USD S&P/Case-Shiller Home Price -- 145.32
Index Feb
14:00 USD Consumer Confidence Apr 53.7 52.5
14:00 USD Richmond Fed Manufacturing 9 6
Index Apr
14:00 USD Fed Chairman Ben Bernanke -- --
Speaks in Washington D.C.
17:00 EUR French Total Jobseekers Change 3.7 3.3
Mar
17:00 EUR French Total Jobseekers Mar 2667 2667.9
20:30 USD API U.S. Crude Oil Inventories -- -741K
(APR 23)
20:30 USD API U.S. Gasoline Inventories -- -1743K
(APR 23)
20:30 USD API U.S. Distillate Inventory -- -3103K
(APR 23)
21:00 USD ABC Consumer Confidence (APR -- -50
25)
23:50 JPY Retail Trade s.a. M/M Mar -0.6% 0.9%
23:50 JPY Retail Trade Y/Y Mar 3.6% 4.2%
23:50 JPY Large Retailers' Sales Mar -5.0% -4.0%
Wednesday, Apr 28, 2010

-- EUR German CPI M/M Apr P 0.2% 0.5%
-- EUR German CPI Y/Y Apr P 1.2% 1.1%
-- EUR German HICP M/M Apr P 0.2% 0.6%
-- EUR German HICP Y/Y Apr P 1.3% 1.2%
01:30 AUD CPI Q/Q Q1 0.8% 0.5%
01:30 AUD CPI Y/Y Q1 2.8% 2.1%

01:30 AUD CPI RBA Trimmed Mean Q/Q Q1 0.6% 0.6%
01:30 AUD CPI RBA Trimmed Mean Y/Y Q1 2.9% 3.2%
01:30 AUD CPI RBA Weighted Median Q/Q 0.7% 0.7%
Q1
01:30 AUD CPI RBA Weighted Median Y/Y 3.0% 3.6%
Q1
03:00 NZD NBNZ Business Confidence Apr -- 42.5
07:30 EUR Italian Business Confidence Apr 85.0 84.1
11:00 USD MBA Mortgage Applications -- 13.6%
(APR 23)
13:00 CAD Canada House Price Index Y/Y -- 7.5%
Feb
14:30 USD DOE U.S. Crude Oil Inventories -- 1894K
(APR 23)
14:30 USD DOE U.S. Gasoline Inventories -- 3587K
(APR 23)
14:30 USD DOE U.S. Distillate Inventory -- 2096K
(APR 23)
18:15 USD FOMC Interest Rate Decision 0.25% 0.25%
21:00 NZD RBNZ Interest Rate Decision 2.50% 2.50%
22:45 NZD Trade Balance (NZD) Mar -- 321M

22:45 NZD Trade Balance (YTD) (NZD) Mar -- -347
22:45 NZD Imports (NZD) Mar -- 3.00B
22:45 NZD Exports (NZD) Mar -- 3.32B
Thursday, Apr 29, 2010

00:00 AUD Conference Board Leading -- -0.2%
Index Feb
03:00 NZD Money Supply M3 Y/Y Mar -- -5.1%
07:55 EUR German Unemployment Change -10K -31K
Apr
07:55 EUR German Unemployment Rate 8.0% 8.0%
s.a. Apr
08:00 EUR Eurozone M3 s.a. (3M) Mar -0.2% -0.2%
08:00 EUR Eurozone M3 s.a. Y/Y Mar -0.1% -0.4%
08:00 EUR Italian Hourly Wages M/M Mar -- 0.0%
08:00 EUR Italian Hourly Wages Y/Y Mar -- 2.1%
09:00 EUR Eurozone Economic Confidence 99.4 97.7
Apr
09:00 EUR Eurozone Business Climate -0.12 -0.32
Indicator Apr
09:00 EUR Eurozone Consumer Confidence -15 -15
Apr F
09:00 EUR Eurozone Industrial Confidence -8 -10
Apr
09:00 EUR Eurozone Services Confidence 3 1
Apr
12:30 USD Chicago Fed National Activity -- -0.64
Index Mar
12:30 USD Initial Jobless Claims (APR 24) 442K 456K
12:30 USD Continuing Claims (APR 17) 4613K 4646K
22:45 NZD Building Permits M/M Mar -- 5.9%
23:01 GBP GfK Consumer Confidence -15 -15
Survey Apr
23:15 JPY Nomura/JMMA Manufacturing -- 52.4
PMI Apr
23:30 JPY Tokyo CPI Y/Y Apr -2.1% -1.8%
23:30 JPY Tokyo CPI Ex-Fresh Food Y/Y -2.1% -1.8%
Apr
23:30 JPY Tokyo CPI Ex Food Energy Y/Y -1.6% -1.2%
Apr
23:30 JPY National CPI Y/Y Mar -1.1% -1.1%
23:30 JPY National CPI Ex-Fresh Food Y/Y -1.2% -1.2%
Mar
23:30 JPY National CPI Ex Food Energy -1.1% -1.1%
Y/Y Mar
23:30 JPY Jobless Rate Mar 4.9% 4.9%
23:30 JPY Job-To-Applicant Ratio Mar 0.48 0.47
23:30 JPY Household Spending Y/Y Mar 0.7% -0.5%
23:50 JPY Industrial Production M/M Mar 0.8% -0.7%
P
23:50 JPY Industrial Production Y/Y Mar 31.1% 31.3%
P
23:50 JPY Japan Buying Foreign Stocks -- -82.0B
(JPY) (APR 23)
23:50 JPY Japan Buying Foreign Bonds -- 435.8B
(JPY) (APR 23)
23:50 JPY Foreign Buying Japan Stocks -- 140.4B
(JPY) (APR 23)
23:50 JPY Foreign Buying Japan Bonds -- 201.2B
(JPY) (APR 23)
Friday, Apr 30, 2010

-- JPY BoJ Interest Rate Decision 0.10% 0.10%
01:00 AUD HIA New Home Sales M/M Mar -- -5.2%
01:30 AUD Private Sector Credit M/M Mar 0.4% 0.4%
01:30 AUD Private Sector Credit Y/Y Mar 1.9% 1.6%
01:30 JPY Labor Cash Earnings Y/Y Mar -0.4% -0.7%
04:00 JPY Vehicle Production Y/Y Mar -- 74.9%
05:00 JPY Housing Starts Y/Y Mar -5.8% -9.3%
05:00 JPY Annualized Housing Starts Mar 0.826M 0.794M
05:00 JPY Construction Orders Y/Y Mar -- -20.3%
06:45 EUR French Non-Farm Payrolls Q/Q -- -0.1%
(1Q P)
06:45 EUR French PPI M/M Mar 0.6% 0.1%
06:45 EUR French PPI Y/Y Mar 1.9% 1.0%
08:00 EUR Italian PPI M/M Mar 0.4% 0.1%
08:00 EUR Italian PPI Y/Y Mar 1.5% 0.4%
09:00 EUR Italian CPI (NIC incl. tobacco) 0.2% 0.3%
M/M Apr P
09:00 EUR Italian CPI (NIC incl. tobacco) 1.4% 1.4%
Y/Y Apr P
09:00 EUR Italian HICP M/M Apr P 0.6% 1.5%
09:00 EUR Italian HICP Y/Y Apr P 1.4% 1.4%
09:00 EUR Eurozone CPI Estimate Y/Y Apr 1.5% 1.4%
09:00 EUR Eurozone Unemployment Rate 10.0% 10.0%
Mar
09:30 CHF KOF Swiss Leading Indicator 1.99 1.93
Apr
10:00 EUR Italian Unemployment Rate s.a. 8.6% 8.5%

Mar
12:30 CAD GDP M/M Feb 0.4% 0.6%
12:30 CAD Industrial Product Price M/M -- 0.0%
Mar
12:30 CAD Raw Materials Price Index M/M -- 0.4%
Mar
12:30 USD GDP (Annualized) Q1 A 3.4% 5.6%
12:30 USD Personal Consumption Q1 A 3.1% 1.6%
12:30 USD Core PCE Q/Q Q1 A 0.5% 1.8%
12:30 USD GDP Price Index Q1 A 0.9% 0.5%
12:30 USD Employment Cost Index Q1 0.5% 0.5%
13:45 USD Chicago PMI Apr 60.0 58.8
13:55 USD U. of Michigan Confidence Apr F 71.0 69.5
14:00 USD NAPM-Milwaukee Apr -- 62
20:15 USD Bloomberg Financial -- 0.5
Conditions Index Apr Apr
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Weekly Markets Update

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25 avril 2010 [WEEKLY MARKETS UPDATE]

Weekly Markets Update

Risk correction fails to materialize, so far

Greece enters the next phase of its funding crisis

Key data and events to watch next week

Position Strategy: current position FLAT,

Position Strategy: Current position FLAT

Position Strategy: Current position: Flat,

Position Strategy:Current position : Flat

Position Strategy: Current position Flat,

Current position : LONG at 85.02 stop 83.70 target 86.39

DOW JONES INDU. Future June 2010

Current position LONG at 10381.4 stop profit 10915 target 11211.75

TRACK from April

Monday, Apr 26, 2010

Tuesday, Apr 27, 2010

13:00 USD S&P/Case-Shiller Composite-20 -0.15% 0.32%

Wednesday, Apr 28, 2010

01:30 AUD CPI Y/Y Q1 2.8% 2.1%

22:45 NZD Trade Balance (NZD) Mar -- 321M

Thursday, Apr 29, 2010

Friday, Apr 30, 2010

10:00 EUR Italian Unemployment Rate s.a. 8.6% 8.5%

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For clients of SFM Finanz.

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