21 st February 2011

1. FuTechs futechs@futex.co.uk 21st February 2011 Equities were generally subdued on Friday. Equities on this side of the pond were generally contained within their recent ranges of the last 2-3 days. US equities saw fresh YTD highs again. The USD was notably weaker on the day, materially, against most currency pairs. The Bund saw a sharp deterioration over the course of the day, although recovered form its lows, somewhat, heading into the evening. Today is the US President’s Day holiday, which may result in very quiet market volumes. Support Resistance The Dax closed marginally higher yesterday. A short-lived move lower during the European am session saw the market test lows around the 7383.5 level. However a bounce heading into the afternoon, saw the market close small up on the day. A break the bias f the market remains bullish,. A break down below the 7353.5-60 level may unnerve a few longs however. Support Resistance The EuroStoxx closed flat on the day. The market had traded lower in the morning, and tracked down to 3047 before rallying heading into the afternoon/evening. The weekly close above the 3044-54 area should signal further medium term strength. The short-term target for this current bullish move is 3107. A close below the 3043 may be the first sign that this move higher since the start of the month is waning. The FTSE briefly failed again around the 6077.0 level yesterday. The market then held a probe back to around the 6020-27.0 level before bouncing into the afternoon/evening. The market must look to take out the recent high prints if it is to build on recent momentum. The lack of inertia at these highs may prove to be the markets undoing and so we would need to see a sustained move above 6077.0 today. If this fails to materialise, a deep and sharp pullback should occur. Support Resistance The Bund traded lower yesterday. The market failed around the 123.89 level in early trade, before moving sharply lower heading into the afternoon. Misquoted hawkish ECB comments were the catalyst for this. However, the market’s reaction was telling. It took out the 123.13 lows from Thursday on the way to bouncing off 123.00, thus potentially forming an outside day reversal. A move to below the 122.95-123.01 may then result in an extended sell-off which takes out the 122.29-34 lows. If bulls see the market back above 123.44-53, it should settle nerves. Support Resistance