FX Daily Report

Sterling fell broadly on Tuesday, hitting a four-month low versus the euro after Bank of England Governor Mervyn King said he was considering cutting the rate paid on reserves which UK banks park at the central bank.

The pound erased early gains made on a rise in UK house prices and data showing a slower than expected fall in domestic inflation, as King's statement fuelled speculation the BoE may use yet another device in its quantitative easing toolkit. In testimony to a Treasury committee, King said it would be 'sensible' to cut the rate at which banks reserves are remunerated, and that it was something the central bank was looking at.

Markets were taken off guard by the comments, which also sparked a rally in UK interest rate futures on the view that the BoE will keep lending rates on hold for some time, after last month increasing the amount of domestic assets it buys from the market to boost liquidity.

The European Central Bank might have to raise its interest rates before turmoil in money markets turmoil has fully subsided, ECB Executive Board member Juergen Stark said on Tuesday. Stark said the recent improvement in economic data suggested the euro zone could pull itself out of recession this quarter, earlier than expected. But he warned that a high degree of uncertainty remained. He said the bank may face the tricky situation of having to hike interest rates before unwinding the measures it has put in place to help money markets and banks through the financial crisis.

Federal Reserve Chairman Ben Bernanke said on Tuesday that the worst U.S. recession since the Great Depression was probably over, but the recovery would be slow and take time to create new jobs. U.S. unemployment has soared to 9.7 percent since the recession began in December 2007, and is forecast to push to 10 percent in the months ahead. Bernanke cautioned that growth next year would probably be not much faster than the economy's so-called long-run potential rate, which meant that it would be slow to take up slack and pare back the level of unemployment

EUR/USD: Yesterday the pair broke resistance at 1.4650 and reached 1.4686 high. Prefer buy moving down in 1.4650 - 1.4620 area for target 1.4720 (2008 12 18 high). Stop loss below 1.4590

GBP/USD: Despite bearish GBP view still hope that support in 1.6420 - 1.6400 should hold. Prefer buy dips till 1.6420 for correction till 1.6500 - 1.6550. Stop loss below 1.6380.

USD/JPY: Yesterday pair reached 91.60 high. Till support at 90.80 holds prefer follow yesterday’s strategy and buy at current 91.05 price and moving down till 90.80 for target 91.90. Stop loss below 90.50

USD/CHF: Prefer sell rally in 1.0350 - 1.0360 area for target 1.0260. Stop loss above 1.0420.

swiss pb

MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES

                                                (in billions of dollars)
                                               HOLDINGS 1/ AT END OF PERIOD


                       Jul     Jun     May     Apr     Mar     Feb     Jan     Dec     Nov     Oct     Sep     Aug     Jul
Country               2009    2009    2009    2009    2009    2009    2009    2008    2008    2008    2008    2008    2008
                     ------  ------  ------  ------  ------  ------  ------  ------  ------  ------  ------  ------  ------

China, Mainland       800.5   776.4   801.5   763.5   767.9   744.2   739.6   727.4   713.2   684.1   618.2   573.7   550.0
Japan                 724.5   711.8   677.2   685.9   686.7   661.9   634.8   626.0   625.2   629.6   617.5   630.3   637.6
United Kingdom 2/     220.0   214.0   163.8   152.8   128.2   129.1   123.9   130.9   132.4   133.2   112.8    82.5    66.1
Carib Bnkng Ctrs 4/   193.2   189.7   194.8   204.7   213.6   189.1   176.6   197.5   205.0   203.5   169.3   132.9   117.6
Oil Exporters 3/      189.2   191.0   192.9   189.5   192.0   181.7   186.6   186.2   187.2   176.7   171.2   169.6   162.9
Brazil                138.1   139.8   127.1   126.0   126.6   130.8   133.5   127.0   136.1   141.0   148.3   152.6   154.8
Russia                118.0   119.9   124.5   137.0   138.4   130.1   119.6   116.4   108.0   110.8    99.6   104.2   104.0
Hong Kong             115.3    99.8    93.2    80.9    78.9    76.3    71.7    77.2    70.6    69.8    65.5    65.8    65.2
Luxembourg             92.2   104.3    96.3    97.6   106.1    92.3    87.2    97.4    94.4   100.8   104.7    90.4    89.7
Taiwan                 77.4    77.0    75.7    78.3    74.8    72.6    73.3    71.8    70.2    65.9    63.0    66.2    67.9
Switzerland            68.1    71.6    63.7    64.2    67.7    68.2    62.1    62.3    63.8    62.0    49.7    45.9    45.7
Germany                56.3    53.9    55.2    54.6    55.0    56.6    56.4    56.1    54.0    53.7    51.6    51.8    51.7
Singapore              42.4    40.8    39.6    39.7    39.1    39.4    38.3    40.8    38.8    34.0    32.2    31.9    32.8
India                  38.9    39.3    38.8    38.5    38.2    34.6    32.5    29.2    22.3    18.3    20.3    20.2    19.0
Ireland                38.6    46.3    50.6    49.7    54.7    54.5    50.0    54.3    41.3    35.1    32.9    18.9    16.9
Korea                  37.6    36.3    37.4    35.4    33.1    33.3    31.3    31.3    32.7    36.2    40.2    42.1    39.4
Thailand               31.4    29.7    26.8    28.5    26.0    39.7    37.2    32.4    33.9    33.6    27.4    30.4    30.6
Norway                 28.9    28.7    28.3    27.5    26.2    21.1    21.9    23.1    20.2    11.5    13.2     2.4     2.8
Mexico                 27.7    29.5    31.6    35.4    36.3    37.9    34.9    34.8    33.8    32.2    32.5    32.6    34.3
Turkey                 27.3    27.5    28.8    27.2    30.2    32.4    31.3    30.8    29.0    27.9    31.5    34.3    32.7
France                 24.6    26.0    25.9    30.6    27.1    16.8    17.9    16.8    18.4    20.5    19.3    21.2    17.1
Netherlands            21.5    18.9    16.3    16.5    17.6    16.1    16.8    15.4    15.6    15.7    15.6    16.9    17.8
Canada                 20.2    19.0    11.5    13.1    11.9    10.9     9.0     8.2    12.7    14.0    16.0    23.5    22.3
Egypt                  18.6    17.3    18.6    18.5    18.5    19.1    16.9    17.2    16.8    16.7    15.5    14.5    15.1
Italy                  17.4    16.8    16.8    16.2    16.6    16.5    15.6    16.0    15.9    15.3    11.6    12.9    11.0
Israel                 16.9    18.1    19.0    19.1    19.4    17.4    16.9    18.8    13.8    12.4     8.7     7.6     8.1
Sweden                 16.5    16.5    13.0    12.7    12.5    12.7    12.4    12.7    13.1    13.5    13.6    14.7    14.4
Belgium                15.7    15.7    15.7    15.8    15.4    14.5    15.5    15.9    15.3    15.8    15.4    14.8    15.0
Colombia               14.8    11.8    11.9    11.4    11.2    11.4    11.3    11.1    11.5    11.3     9.9     9.0     9.3
Chile                  13.5    14.3    14.7    15.1    15.5    15.2    15.2    15.2    15.1    15.4    13.4    13.0    13.6
Malaysia               11.9    11.7    12.3    11.6    10.6     8.4     8.0     8.4     8.8     8.6     9.4    10.1    10.5
Philippines            11.4    11.6    11.8    12.0    12.4    12.6    11.6    11.7    11.5    12.1    12.0    12.3    12.4
All Other             159.6   157.6   157.8   153.5   156.7   164.9   162.5   156.5   156.2   149.1   137.8   139.2   135.6
Grand Total          3428.0  3382.5  3293.2  3262.7  3265.3  3162.0  3072.2  3076.9  3036.6  2980.3  2800.1  2688.4  2624.0

Of which:
For. Official       2346.2  2295.5  2287.5  2253.6  2248.6  2198.1  2165.8  2138.7  2104.1  2063.7  1981.0  1944.8  1926.9
 Treasury Bills      606.6   571.7   586.2   530.6   542.7   521.2   486.9   457.9   427.2   360.6   276.8   245.6   232.5
 T-Bonds & Notes    1739.6  1723.8  1701.3  1723.1  1705.9  1676.9  1678.9  1680.8  1676.9  1703.1  1704.2  1699.2  1694.4

Department of the Treasury/Federal Reserve Board
September 16, 2009

1/  Estimated foreign holdings of U.S. Treasury marketable and non-marketable bills, bonds, and notes
    reported under the Treasury International Capital (TIC) reporting system are based on annual
    Surveys of Foreign Holdings of U.S. Securities and on monthly data.
2/  United Kingdom includes Channel Islands and Isle of Man.
3/  Oil exporters include Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar,
    Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria.
4/  Caribbean Banking Centers include Bahamas, Bermuda, Cayman Islands, Netherlands Antilles and Panama.
    Beginning with new series for June 2006, also includes British Virgin Islands.

TREASURY INTERNATIONAL CAPITAL DATA FOR JULY

WASHINGTON – The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for July 2009. The next release, which will report on data for August 2009, is scheduled for October 16, 2009.

Net foreign purchases of long-term securities were $15.3 billion.

• Net foreign purchases of long-term U.S. securities were $44.0 billion. Of this, net purchases by private foreign investors were $32.1 billion, and net purchases by foreign official institutions were $12.0 billion.
• U.S. residents purchased a net $28.8 billion of long-term foreign securities.

Net foreign acquisition of long-term securities, taking into account adjustments, is estimated to have been negative $7.4 billion.

Foreign holdings of dollar-denominated short-term U.S. securities, including Treasury bills, and other custody liabilities decreased $4.5 billion. Foreign holdings of Treasury bills increased $14.4 billion.

Banks' own net dollar-denominated liabilities to foreign residents decreased $85.7 billion.

Monthly net TIC flows were negative $97.5 billion. Of this, net foreign private flows were negative $131.3 billion, and net foreign official flows were $33.8 billion.

Complete data are available on the Treasury website at www.treas.gov/tic

Note: The data for lines 22-32, and especially line 29, include data from a number of institutions previously reporting only quarterly as nonbanks, but which are now reporting monthly as banking entities. This change in reporter classification affects data going back to October 2008.

			TIC Monthly Reports on Cross-Border Financial Flows
			(Billions of dollars, not seasonally adjusted)
								12 Months Through
						2007	2008	Jul-08	Jul-09	Apr-09	May-09	Jun-09	Jul-09
		Foreigners' Acquisitions of Long-term Securities
1			Gross Purchases of Domestic U.S. Securities			29730.6	30673.4	33482.0	21998.0	1474.7	1544.7	2039.3	1655.4
2			Gross Sales of Domestic U.S. Securities			28724.8	30260.9	32742.1	21769.3	1440.5	1536.8	1915.7	1611.4
3			Domestic Securities Purchased, net (line 1 less line 2) /1			1005.8	412.5	739.9	228.7	34.3	7.9	123.6	44.0
4				Private, net /2		818.1	309.1	490.8	265.2	18.3	31.3	105.2	32.1
5					Treasury Bonds & Notes, net	195.0	239.4	245.1	269.0	24.8	-0.8	78.0	15.3
6					Gov't Agency Bonds, net	99.9	-6.2	76.4	-53.3	1.0	13.4	10.9	2.5
7					Corporate Bonds, net	342.8	58.5	143.2	-29.3	-11.2	1.9	-0.6	-9.8
8					Equities, net	180.4	17.4	26.2	78.8	3.7	16.8	16.9	24.0
9				Official, net /3		187.7	103.4	249.1	-36.5	16.0	-23.4	18.4	12.0
10					Treasury Bonds & Notes, net	3.0	76.6	90.3	45.1	17.1	-21.8	22.5	15.8
11					Gov't Agency Bonds, net	119.1	-31.5	64.9	-94.1	-3.5	-0.6	-5.9	-7.2
12					Corporate Bonds, net	50.6	34.9	61.4	0.2	1.5	-0.9	-0.4	-1.2
13					Equities, net	15.1	23.4	32.4	12.2	0.9	-0.1	2.2	4.6
14			Gross Purchases of Foreign Securities from U.S. Residents			8187.6	7701.4	8522.7	5445.9	379.2	397.9	483.2	438.6
15			Gross Sales of Foreign Securities to U.S. Residents			8416.8	7599.6	8636.6	5444.8	402.0	425.3	516.6	467.3
16			Foreign Securities Purchased, net (line 14 less line 15) /4			-229.2	101.8	-113.9	1.1	-22.8	-27.4	-33.4	-28.8
17					Foreign Bonds Purchased, net	-133.9	81.8	-71.1	2.2	-13.8	-16.2	-19.6	-14.2
18					Foreign Equities Purchased, net	-95.3	20.1	-42.8	-1.1	-8.9	-11.2	-13.8	-14.5
19			Net Long-term Securities Transactions (line 3 plus line 16):			776.6	514.3	626.0	229.8	11.5	-19.4	90.2	15.3
20			Other Acquisitions of Long-term Securities, net /5			-235.2	-198.1	-226.9	-199.1	-20.0	-17.5	-19.4	-22.7
21		Net Foreign Acquisitions of Long-term Securities
					(lines 19 and 20):	541.4	316.2	399.1	30.7	-8.5	-36.9	70.7	-7.4
22		Increase in Foreign Holdings of Dollar-denominated Short-term
					U.S. Securities and Other Custody Liabilities: /6	198.0	229.4	181.6	219.3	-42.1	21.5	-38.1	-4.5
23			U.S. Treasury Bills			49.7	456.0	134.4	489.8	-44.5	53.1	-11.3	14.4
24				Private, net		28.1	196.5	78.4	115.7	-32.4	-2.5	3.2	-20.5
25				Official, net		21.5	259.5	56.1	374.1	-12.1	55.6	-14.5	34.9
26			Other Negotiable Instruments
					and Selected Other Liabilities: /7	148.4	-226.6	47.2	-270.5	2.4	-31.6	-26.8	-18.9
27				Private, net		72.2	-107.2	-2.6	-146.9	-1.9	-28.5	-22.2	-9.9
28				Official, net		76.2	-119.4	49.8	-123.6	4.2	-3.1	-4.6	-8.9
29		Change in Banks' Own Net Dollar-denominated Liabilities				-127.2	130.3	-364.8	-210.7	-4.0	-41.6	-89.5	-85.7
30	Monthly Net TIC Flows (lines 21,22,29) /8					612.2	675.9	216.0	39.3	-54.6	-57.0	-56.8	-97.5
		of which
31			Private, net			329.1	516.3	-46.3	-59.2	-59.9	-72.6	-53.3	-131.3
32			Official, net			283.1	159.6	262.3	98.5	5.3	15.6	-3.5	33.8
/1			Net foreign purchases of U.S. securities (+)
/2			Includes international and regional organizations
/3			The reported division of net purchases of long-term securities between net purchases by foreign official institutions and net purchases
				of other foreign investors is subject to a "transaction bias" described in Frequently Asked Questions 7 and 10.a.4 on the TIC web site.
/4			Net transactions in foreign securities by U.S. residents. Foreign purchases of foreign securities = U.S. sales of foreign securities to foreigners.
				Thus negative entries indicate net U.S. purchases of foreign securities, or an outflow of capital from the United States; positive entries
				indicate net U.S. sales of foreign securities.
/5			Minus estimated unrecorded principal repayments to foreigners on domestic corporate and agency asset-backed securities +
				estimated foreign acquisitions of U.S. equity through stock swaps -
				estimated U.S. acquisitions of foreign equity through stock swaps +
				increase in nonmarketable Treasury Bonds and Notes Issued to Official Institutions and Other Residents of Foreign Countries
/6			These are primarily data on monthly changes in banks' and broker/dealers' custody liabilities. Data on custody claims are collected
				quarterly and published in the Treasury Bulletin and the TIC web site.
/7			"Selected Other Liabilities" are primarily the foreign liabilities of U.S. customers that are managed by U.S. banks or broker/dealers.
/8			TIC data cover most components of international financial flows, but do not include data on direct investment flows, which are collected
				and published by the Department of Commerce's Bureau of Economic Analysis. In addition to the monthly data summarized here, the
				TIC collects quarterly data on some banking and nonbanking assets and liabilities. Frequently Asked Question 1 on the TIC web
				site describes the scope of TIC data collection.

Foreign Exchange Market Commentary

EUR/USD closed higher on Tuesday as it extends this month's rally. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are overbought but remain bullish signalling that sideways to higher prices are possible near-term. If it extends the rally off August's low, the 75% retracement level of the 2008-decline crossing is the next upside target. Closes below the 20-day moving average crossing are needed to confirm that an important top has been posted.

USD/JPY closed lower due to profit taking on Tuesday as it consolidates below the 75% retracement level of the 2008-2009-decline crossing. A short covering rally tempered early session losses and the high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are diverging and are turning neutral to bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing are needed to confirm that a short-term top has been posted.

GBP/USD closed lower due to profit taking on Tuesday as it consolidated some of last week's rally. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are overbought and are turning neutral to bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing would temper the near-term bullish outlook in the market. If it extends this month's rally, August's high crossing is the next upside target.

USD/CHF closed slightly higher on Tuesday as it extends this month's rally. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are overbought but remain bullish signalling that sideways to higher prices are possible near-term. If it extends this summer's rally, the 87% retracement level of the 2008-2009-decline crossing is the next upside target. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted.

HY Markets
http://www.hymarkets.com

Daily Technical Analysis

EURUSD Outlook

My trading plan worked fine yesterday. On h4 chart below we can see that the pair made a downside rebound, bottomed at 1.4560 (around the rising wedge lower line) before made a bullish momentum topped at 1.4685 and closed at 1.4660. If you look at the rising wedge formation now, there is only a little room left for movement and a breakout/breakdown is imminent. A breakout to the upside will cancel the bearish reversal scenario while a breakdown to the downside should be seen at bearish scenario potential.

A look at daily chart below reveals that actually beside the rising wedge, we have another technical view which support the potential bearish reversal outlook, which is a CCI divergence, where price keep moving higher making new highs but CCI on the other hand is heading down. So, even the bullish momentum seems still in control right now, I will be very careful at this phase since we have two technical views that lead to potential bearish reversal (or at least a correction) scenario. Immediate support at 1.4570. Break below that area could be a valid breakdown from the rising wedge and could trigger a downside momentum. Initial resistance at 1.4719.

GBPUSD Outlook

The GBPUSD made another bearish momentum yesterday, bottomed at 1.6401 but closed higher at 1.6485. On h4 chart below we can see that the bullish channel has been convincingly violated to the downside indicating bullish failure. Price break below 1.6500 area (38.2% Fibo retracement of 1.6113 - 1.6740), slipped below the 50% Fibo but pullback to the upside and now struggling around 38.2% Fibo area around 1.6500. The bias is neutral in nearest term but I prefer a downside scenario testing 1.6353 area (61.8% Fibo). Immediate resistance at 1.6530. Break above that area should lead us into no trading zone.

USDJPY Outlook

The USDJPY attempted to push higher yesterday but failed to break above 91.80 before whipsawed to the downside and closed lower at 91.00. The way I see it, the bullish correction phase might over now and we are ready for a bearish continuation outlook. The bias is bearish in nearest term re-testing 90.20 area. Immediate resistance at 91.60/80 area. Break above that area should be seen as a potential threat to the current bearish outlook. CCI just cross the -100 line down on h1 chart suggesting potential downside pressure.

USDCHF Outlook

The USDCHF made indecisive movement yesterday. The pair is now clearly in consolidation phase where bearish momentum seem exhausted, but we also haven’t seen significant bullish correction yet. On daily chart below you can see that in the last 4 days, the pair formed 2 inverted hammer and 2 Doji indicating an intense battle between buyers and sellers with no winner so far. This situation is one of the market condition where I prefer to stay out and just wait for further development. Immediate support at 1.0300 - 1.0250 area. Initial resistance at 1.0420.

EURJPY Outlook

The EURJPY had a moderate bullish momentum yesterday, topped at 133.75 and closed at 133.47. On h4 chart below we have a shooting star appeared after some bullish momentum indicating potential bearish correction testing the bearish channel upper line (red) area. However, I still prefer to stand aside since like I said yesterday, the pair is in no trading zone. Immediate support at 132.80 followed by 132.20. Initial resistance at 134.36

GBPJPY Outlook

The GBPJPY attempted to push higher yesterday, topped at 151.74 but whipsawed to the downside and closed lower at 149.44. On my h4 chart below we can see that after had a significant bearish momentum from 163.05 and hit 149.02, the pair has been corrected higher but never really able to stay above the 23.6% Fibo before fell below it again. The bias is bearish in nearest term re-testing 149.02. Immediate resistance at 150.30. Break above that area should lead us into no trading zone.

AUDUSD Outlook

The AUDUSD made another indecisive movement yesterday, formed another a Doji on daily chart and we have 5 Dojis in a row for the last 5 trading days indicating a long consolidation after some bullish running. On h1 chart below we can see that the pair still trapped in range area of 0.8674 - 0.8570 area (0% - 23.6% Fibo retracement of 0.8239 - 0.8674) indicating consolidation but still in bullish context. I still prefer a bullish scenario but I think it’s better to stay out for now. The best place to put a long position is still around 0.8570 area with a tight stop loss or if we have a breakout above 0.8674 also with a tight stop loss

FX Instructor LLC
www.fxinstructor.com

ENERGY MARKET RECAP

October Crude Oil closed up 2.02 at 70.88. This was 2.40 up from the low and 0.31 off the high.

October Heating Oil closed up 3.62 at 177.84. This was 4.84 up from the low and 1.16 off the high.

October RBOB Gasoline finished up 4.42 at 178.75, 1.05 off the high and 5.75 up from the low.

October Natural Gas finished up 0.06 at 3.36, 0.24 off the high and 0.05 up from the low.



Technical Outlook
CRUDE OIL (OCT) 09/16/2009: The cross over and close above the 60-day moving average indicates the longer-term trend has turned up. A bullish signal was given with an upside crossover of the daily stochastics. Momentum studies are rising from mid-range, which could accelerate a move higher if resistance levels are penetrated. The intermediate trend could be turning up with the close back above the 18-day 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 near-term upside target is at 73.06. The next area of resistance is around 72.22 and 73.06, while 1st support hits today at 69.52 and below there at 67.65.

RBOB GAS (OCT) 09/16/2009: Momentum studies are declining, but have fallen to oversold levels. The market's close below the 9-day moving average is an indication the short-term trend remains negative. 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 170.75. The next area of resistance is around 182.10 and 184.35, while 1st support hits today at 175.30 and below there at 170.75.

HEATING OIL (OCT) 09/16/2009: A bullish signal was given with an upside crossover of the daily stochastics. 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 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 near-term upside target is at 182.89. The next area of resistance is around 180.77 and 182.89, while 1st support hits today at 174.78 and below there at 170.89.

PRECIOUS METALS RECAP

December Gold closed up 5.2 at 1006.3. This was 13.3 up from the low and 1.9 off the high.

December Silver finished up 0.377 at 17, 0.02 off the high and 0.49 up from the low.

Technical Outlook
COMEX SILVER (DEC) 09/16/2009: 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 setup is supportive for early gains with the close over the 1st swing resistance. The next upside target is 1754.0. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 1736.0 and 1754.0, while 1st support hits today at 1672.0 and below there at 1626.0.

COMEX GOLD (DEC) 09/16/2009: 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 upside daily closing price reversal gives the market a bullish tilt. The close over the pivot swing is a somewhat positive setup. The near-term upside objective is at 1023.9. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 1017.9 and 1023.9, while 1st support hits today at 999.5 and below there at 987.0.

CURRENCY MARKET RECAP

December US Dollar closed down 0.21 at 76.750. This was 0.090 up from the low and 0.565 off the high.

December Euro closed up 0.53 at 146.66. This was 1.08 up from the low and 0.19 off the high.

December Japanese Yen finished down 0.19 at 109.84, 0.38 off the high and 0.65 up from the low.

December Swiss finished up 0.07 at 96.75, 0.2 off the high and 0.71 up from the low.

December Canadian Dollar finished up 1.03 at 93.27, 0.11 off the high and 1.27 up from the low.

December British Pound closed down 0.74 at 164.99. This was 0.98 up from the low and 1.62 off the high.

Technical Outlook
JAPANESE YEN (DEC) 09/16/2009: A crossover down in the daily stochastics is a bearish signal. Momentum studies trending lower from overbought levels is a bearish indicator and would tend to reinforce lower price action. The close above the 9-day moving average is a positive short-term indicator for trend. The market's close below the pivot swing number is a mildly negative setup. The next downside target is 108.74. The next area of resistance is around 110.33 and 110.79, while 1st support hits today at 109.31 and below there at 108.74.

EURO (DEC) 09/16/2009: 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 close over the pivot swing is a somewhat positive setup. The next upside target is 147.70. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 147.28 and 147.70, while 1st support hits today at 146.02 and below there at 145.17.

STOCK INDICES RECAP

December S&P closed up 2.3 at 1045.8. This was 7.2 up from the low and 6.1 off the high. December S&P E-Mini finished up 2.75 at 1046.25, 5.75 off the high and 8 up from the low.

December Dow finished up 50 at 9600, 55 off the high and 75 up from the low.

Technical Outlook
S&P 500 (DEC) 09/16/2009: 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. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The near-term upside objective is at 1058.92. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 1052.65 and 1058.92, while 1st support hits today at 1039.35 and below there at 1032.33.

S&P E-MINI (DEC) 09/16/2009: 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. It is a mildly bullish indicator that the market closed over the pivot swing number. The next upside objective is 1059.43. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 1053.12 and 1059.43, while 1st support hits today at 1039.38 and below there at 1031.94.

NASDAQ (DEC) 09/16/2009: 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. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next upside target is 1714.81. With a reading over 70, the 9-day RSI is approaching overbought levels.The next area of resistance is around 1705.87 and 1714.81, while 1st support hits today at 1684.13 and below there at 1671.32.

DOW (DEC) 09/16/2009: The market rallied to a new contract high. 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. It is a mildly bullish indicator that the market closed over the pivot swing number. The next upside objective is 9633. The next area of resistance is around 9605 and 9633, while 1st support hits today at 9535 and below there at 9492.

BOND MARKET RECAP

December Bonds finished down 0-210 at 119-060, 0-150 off the high and 0-110 up from the low.

December 10 Yr Treasury Notes closed down 0-115 at 117-060. This was 0-090 up from the low and 0-055 off the high.

Technical Outlook
BONDS (DEC) 09/16/2009: Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The market back below the 18-day moving average suggests the intermediate-term trend could be turning down. The close below the 1st swing support could weigh on the market. The next downside objective is now at 118-060. The next area of resistance is around 119-240 and 120-130, while 1st support hits today at 118-210 and below there at 118-060.

10 YR TREASURY NOTES (DEC) 09/16/2009: 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. It is a slightly negative indicator that the close was under the swing pivot. The next downside target is now at 116-175. The next area of resistance is around 117-175 and 117-290, while 1st support hits today at 116-280 and below there at 116-175.