Weekly

.
Short covering and portfolio balancing flows came as expected last week. IMM data showing a shift out of euro
shorts (half a billion USD from week prior). Major contracts near key levels, with everyone waiting to see who will
Journal make the first move. Watch rate statements from RBA, BoE and ECB this week. Watch EZ earnings. Watch the EIA
25 July 2010 petroleum report, and pay close attention when CL is close to 80. Finally, watch the CA and US unemployment rates.
6E needs close abv 1.3125 (!) ES nxt rez 1130, 1147 (!) DAX of two minds blw 6360 CL needs close abv 80 (!)

Calendar GMT Event Mkt Risk Exp Prev Remarks

Monday 0715 CH Retail sales Jun YoY Ccy Med 3.8 CHF pairs
0730 SVME PMI Jul Ccy Med 65.7 See above
0755 GE German PMI manufacturing Equ Med DAX intraday
1400 US ISM prices Jul C/E Med 57 DX, ES, DAX intraday
ISM manufacturing Jul C/E Med 56.2 See above
Tuesday 0130 AU Retail sales Jun MoM Ccy Med 0.2 AUD pairs, watch ex-inflation Q2
0430 RBA rate decision statement (Aug 3) Ccy High 4.50 4.50 AUD pairs
0715 CH CPI Jul YoY Ccy High 0.5 CHF pairs, watch MoM Jul
1230 US PCE deflator Jun YoY C/E High 1.9 ES, DAX, DX, CL, ccy majors, watch core
1400 Pending home sales Jun MoM C/E Med -30 See above, likely priced in
2100 ABC consumer confidence Equ Med Likely priced in
Wednesday 0130 AU House price index Q2 YoY/QoQ Ccy Med 20 AUD pairs, likely priced in
Trade Balance Ccy Med 1645M China references, likely prices in
0900 EU Retail sales Jun YoY, MoM C/E Med 0.2 DAX, euro pairs
1215 US ADP employment change C/E M/L 13K Watch for surprises, otherwise priced in
1430 US EIA petroleum status report Equ Med 7.3M CL, energy equities
2245 NZ Unemployment rate (and related) Q2 Ccy Med -0.1 NZD pairs
Thursday 0130 AU Monetary policy statement Ccy High Inflationary language
1000 GE Factory orders Jun YoY, MoM Equ M/L 24.8 DAX intraday, likely priced in
1100 UK BoE rate decision statement (TBD) Ccy High 0.50 0.50 GBP pairs, likely priced in
Asset purchase target Ccy High 200B 200B See above
1145 EU ECB monetary policy/rate statement C/E High 1.00 1.00 Likely priced in, but intraday volatility
1230 CA Building permits Jun MoM Ccy Med -10.8 CAD pairs, ES correlated
Friday 0400 UK NIESR GDP estimate Jul Ccy Med 0.7 GBP pairs
0545 CH Unemployment rate Jul Ccy Med 3.7 CHF pairs
0830 UK PPI Jul YoY, MoM Ccy Med 10.7 GBP pairs, likely priced in
Industrial production Jun YoY Ccy Med 2.6 See above
Manufacturing production Jun YoY Ccy Med 4.3 See above
1000 GE Industrial production Jun YoY C/E Med 12.4 DAX, euro pairs, likely priced in
1100 CA Unemployment rate Jul C/E High 7.9 ES, DX, CAD pairs, watch Ivey later
1230 US Unemployment rate Jul C/E High 9.5 All instruments, watch NFP change

A word about EURJPY.

The euro is the worst performing currency against the yen -- the pair itself is down 15.4%. No other currency pair is down so
much. EURJPY is my chosen barometer of macro risk sentiment and it doesn't look good. However, we are only half way through
the year. Given the euro (6E, EURUSD) is poised to break above 1.3125, and given the reasons for continued USD depreciation, I
am almost convinced EURJPY has formed a base. While I wanted to believe technical studies suggesting the euro, ES and DAX are
heading higher, I was skeptical of a similar direction in crude. My new EURJPY view means crude has a chance above 80 after all.
Recent weekly ranges have been muted by the summer season, shown on the candle volume charts below. VIX is hovering
above 22, with stronger downside probes on balance. Friday produced healthy volume, but this was probably due to end of month
portfolio balancing flows. This week should have lower volume than the last. At the moment, there is nothing to suggest the
corrective trend in the euro (and ES, etc.) has ended. In fact, I'll just call it a trend, and drop the word "corrective". IMM data
shows specs continuing to pare euro shorts (by about half a billion USD from the week before), suggesting concerns over the
sovereign debt crisis have eased, though perhaps not the threat itself.
This week, I wonder if the same relationship between US and EZ data will persist -- I believe the short covering in the euro
has all but unwound. The gurus (Laidi, et al) got the rally dead wrong. Laidi: "Enter short at 1.22, and leave it alone.") And I'm sure
this kind of thinking relieved unquestioning acolytes of a chunk of their (hard-earned?) money. Of course, it didn't cost the gurus
anything, except a few inconveniences with the odd makeup girl in front of the cameras.

The Lonely Trader

Disclaimer: All information is provided as market commentary and not as investment or trading advice. The Lonely Trader
expressly disclaims liability, without limitation, for losses or damages resulting from reliance on such information. Past
results are no guarantee of future performance. Please consult a registered financial advisor before risking your capital.
Euro weekly studies
Low volume on the ascent shows a lack of conviction either
way. My guess is this is short covering. Will need to see
buyers initiating trade above 1.3125/30 for me to be
convinced a new range has been established.

Weekly range extreme

Weekly range extreme

The euro has yet to break key resistance at 1.3125. The wave groupies were either wrong, or are readjusting their view. Either
way, the rally has not provided any early warning signs. The euro has held above 1.3, albeit on low volume and at the end of the
month. A key fib level was tested but not broken. This week the odds of a break are 50/50, if IMM data is anything to go by.
Whether a move higher can hold is another question. There are sure to be sizeable offers above 1.3140 up to 1.3450. High volume
nodes appear near 1.33xx and 1.40xx. The likely range this week will be between 300 and 400 pips. The high extreme is 1.3450.
The low extreme is 1.2740. Generally, I think the euro is in the process of establishing a range between 1.3450 and 1.2680 with
possible stabs at 1.35 and 1.25. My bias shifts to long above 1.3125/30, but I'm sure the euro will find some way to embarrass me.
Long term (6m to 1yr), my bias is to the downside, targeting 1.2000 and 1.1500 eventually.

The Lonely Trader

Disclaimer: All information is provided as market commentary and not as investment or trading advice. The Lonely Trader
expressly disclaims liability, without limitation, for losses or damages resulting from reliance on such information. Past
results are no guarantee of future performance. Please consult a registered financial advisor before risking your capital.
ES90 weekly studies

Weekly range extreme

Weekly range extreme

The ES September contract is rotating high on low(er) volume. The ES profile changed last week with the close above 1100. 1130
is the next significant obstacle. After this, 1147 comes into view and this is the line in the sand for me. Slow growth in the US has
not seemed to slow ES down. My bias is still short below 1130, long above 1147. Range studies put a close above 1130 by
Wednesday at 22%, which is down 10% from last week. Odds of a touch at 1110 before Wednesday are 56%. Odds of a touch at
1080 are 67%. Range extremes are at 1147 and 1050. Two week HVNs at 1110.50, 1107.75, 1105.50, and 1103, 1098.50, 1096.25,
1091.25, 1089.50, and 1079. It's a mess up here. There is a naked VPOC near 1060. Last week was a narrow range week of 35.25
points. My range studies indicate primary range projection of 45 points and an alternate of 55 points, give or take a few points.

The Lonely Trader

Disclaimer: All information is provided as market commentary and not as investment or trading advice. The Lonely Trader
expressly disclaims liability, without limitation, for losses or damages resulting from reliance on such information. Past
results are no guarantee of future performance. Please consult a registered financial advisor before risking your capital.
DAX weekly studies
Range extreme 6500 ↗

Likely range limit 6350

Likely range limit 5800

Range extreme 5750

I have NO IDEA where this market is going, other than to

say that the consolidation will continue until it doesn't .
My bias is long, but watching HLs and LHs very closely.
Composite volume profile isn't giving any clear signals.

The DAX 30 remains volatile and range bound. This index is coiling up and I believe a very sharp move is just around the corner.
Volume over the past three weeks has been consistent and a bit on the low side, which explains some of the chop. I continue to
believe that as long as this index remains above 5600, the uptrend is still intact. My bias is a break will occur on the high side
before it will return to value. Short term resistance levels are 6275/80 and 6350, with 6500 being the extreme of my weekly range
studies. Short term support levels are 6065 (technical), 6000 (range pivot), 5910 (rejection low), and 5800 (responsive buying).
Two week key HVNs roughly in the areas of 6220, 6178, and 6142. Others in the areas of 6240, 6195, 6155, 6113, 6096.5, 6080,
6053, 6047, 6027, and 5995. It's important to keep in mind that currently the DAX sits in the middle of a very large range -- from
the 2008 range high to the 2009 range low.

The Lonely Trader

Disclaimer: All information is provided as market commentary and not as investment or trading advice. The Lonely Trader
expressly disclaims liability, without limitation, for losses or damages resulting from reliance on such information. Past
results are no guarantee of future performance. Please consult a registered financial advisor before risking your capital.
 Crude weekly studies

Weekly range extreme

Weekly range extreme

Crude will continue to lose ground in a weak global economy, but buying continues. The persistence of buyers at this level is
roughly in line with the rest of a risk seeking market during the past two weeks. Like the euro, however, crude is printing a
conspicuous topping pattern below 80. Range studies suggest not more than 3.5 handles to the upside and not more than 5
handles to the downside, making 82.50 and 74.00 the projected extremes for the week, with 82 (fib, 150DMA), 80 (key level), 77
(supply), and 76 (weekly swing low) the only significant intermediate range references. A clear break to the upside targets 84,
then 85. I'll be watching the EIA petroleum status report as usual for near term direction through Friday.

Comments, insults welcome. Ideas and Jay Schneider -- FX and futures, range studies
San Diego Area, USA
critiques especially appreciated. Email
Blog

The Lonely Trader

Disclaimer: All information is provided as market commentary and not as investment or trading advice. The Lonely Trader
expressly disclaims liability, without limitation, for losses or damages resulting from reliance on such information. Past
results are no guarantee of future performance. Please consult a registered financial advisor before risking your capital.