Daily Trading Stance Wednesday, October 21, 2009

Theme Comment
Stocks retreating a bit after disappointing housing figures yesterday. S&P500 trendline resistance @ 1116 today and
big picture fibo @ 1121. These levels will be the technical focus of the market, but earnings from MS et al might also
move the market.
Overnight, good figures from Australia, but AUD could see a small correction here, as USD looks strong and FX market
seems to favor safety over risk. Same goes for commodities with a top likely forming in Crude.

Economic Data Releases

Country Time (GMT) Name Expectation Prior Comment
UK 08:30 BoE Minutes - - -
US 18:00 FED’s Beige Book - - -

FX Daily stance Comment

EURUSD 0/- Likely to meet res at 1.4950 area. Sell for a test sub-1.49 for 1.4860. stop abv 1.4995
USDJPY 0/+ Look to buy dips to 90.50 lvl for a rebound through 91.0 for 91.35. Stop below 90.10
EURJPY 0/- Res at 136.0 looks solid. Likely ranging 134.80 -135.80 with preference to play from short side
GBPUSD 0/- Rebound seen limited to 1.6415-20 before lower. Downside target 1.6325, stop abv 1.6485
AUDUSD 0/- Risk of a deeper correction to 0.9125. Seen capped at 0.9250-60, abv targets 0.9315 again

FX-Options Comment
EURUSD 1.50 level seems to be key for this pair. Front end got sold as market players unload
gamma. Spot needs to take out that barrier before vols can move higher.
USDJPY Vols are contained but seeing a few interests to buy 2 week and under downside 88-89
strikes so won’t rule out broader dollar selloff taking spot to 8900 again.
AUDUSD Front end vols trading weaker in Asia. 1m traded down to 15.95 down from 16.10 in NY.
Mainly buyers of mid curve upside strikes so expect the trend to continue higher.

Equities Daily stance Comment

DAX 0/+ Buy on dips towards 5800 and target 5861. Stop below 5773.
FTSE100 0/+ Buy on dips towards 5226 and target 5270. Stop below 5204.
S&P 500 0/+ Buy on dips towards 1088 and target 1099. Stop below 1083.
Nasdaq100 0/+
Dow Jones 0/+

Commodities Daily Stance Comment

Gold 0/- Sell at the break of 1052 and target 1044. Stop above 1055.
Silver 0/- Sell at the break of 17.32 and target 17. Stop above 10.45.
Oil (CLZ9) 0/- Sell at the break 78.30 and target 77. Stop above 79.

Earnings Releases
Country Time (GMT) Name EPS exp. EPS prior Comment
US (G(GMT)(G
12:00 Wells Fargo 0.391 0.680
US 11:30
MT) Boeing -2.104 1.410
SP - Iberdrola 0.105 0.130
 Daily Trading Stance

Top 100 Global Stocks CDS Index

US Breakeven 10 Year 140
3

2,5
120

100
1,5

1 80

0,5

60

-0,5 40
10-jun 10-aug 10-okt 10-dec 10-feb 10-apr 10-jun 10-aug 10-okt 21-10-2008 21-12-2008 21-02-2009 21-04-2009 21-06-2009 21-08-2009
US Br eakeven 10 Year Saxo CDS Index

USD breakeven 10 Year – an expression for measuring Credit Default Swaps are expressions for the
inflation expectations. perceived default risk in a company. Now at 55.
AAA and BAA Corporate Bonds vs. 30yr US Treasuries
EURUSD Opt. Vol.
35 7

6
30

5
25

4
20
3
15
2

10
1

5
0
mar-08 jun-08 sep-08 dec-08 mar-09 jun-09 sep-09
0
okt-07 dec-07 feb-08 apr-08 jun-08 aug-08 okt-08 dec-08 feb-09 apr-09 jun-09 aug-09 okt-09
M o o d y B A A - US Ge n eri c Go vt 3 0 Ye ar Yi e l d M o o d y A A A - US Ge n eri c Go vt 3 0 Ye ar Yi e l d
EUR- USD OPT VOL 1W EUR- USD OPT VOL 1M EUR- USD OPT VOL 1Y

Volatility at different time horizons. Too low, now? Spreads are easing, but still showing tight
corporate debt markets.
CEE-German Govt. Bond Spreads CBOE SPX VOLATILITY INDEX
12 45

40
10
35

8 30

25
6
20

15
4

10

2
5

0
0
apr-09 maj-09 jun-09 jul-09 aug-09 sep-09 okt-09
dec-08 jan-09 feb-09 mar-09 apr-09 maj-09 jun-09 jul-09 aug-09 sep-09
CBOE SPX VOLATI LI TY I NDX

GDM AHungar ian - Ger m an Cz echRepublic - Ger m an Poland - Ger m an

The VIX Index is edging lower, now at 21.

1
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