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Daily Trading Stance Wednesday, December 09, 2009

Theme Comment
The USD goes higher and now firmly trades above its 55 DMA in most crosses (but not USDJPY). This development is
confirming the negative correlation break-down from Friday and suggests that USD bulls have more to hope for in the
short term. That also means that stocks are likely to be under pressure.
The S&P500 edged lower and now flirts with the trendline support since March (1085 today). The technical picture
has produced a risk-reward favoring “dip-buying”, but only above the trendline support.
Geithner seeks to extend the $700B TARP until next October.

Economic Data Releases

Country Time (GMT) Name Saxo Consensus Prior
US 15:00 Wholesale Inventories MoM (OCT) -0.5% -0.9%

FX Daily stance Comment

EURUSD - Sell upticks toward 1.4750. Next downside objective at 1.4635, then <1.4500.
USDJPY 0/+ Beware large range. Interested in strategic long, but only at good price (low 87.00’s perhaps).
EURJPY 0/- Might be overdone short term. Sell ahead of 131.00, for a try lower again.
GBPUSD - Sell as the big 1.6250 support area is giving way – could try 1.6000 soon.
USDCAD + Interesting upside down head and shoulders in play around 1.07. Buy with stops below 1.0550.

FX-Options Comment
EURUSD Vols follows higher as dollar bullishness continues. Back end risk reversals still point
towards a higher dollar so expect this theme to continue.
USDJPY Mid to back end continues to see good bids as spot fails to rally. Upside JPY puts are
also being aggressively bid so the market is well positioned for a move higher in spot.
AUDUSD Few downside strikes starting to see good bids. The rest of the curve remains steady.
Gamma is expected to ease after tomorrow’s employment report.

Equities Daily stance Comment

DAX 0/- Sell at the break of 5665 targeting 5635. S/L above 5682.
FTSE 0/- Sell at the break of 5217 targeting 5191. S/L above 5233.
S&P500 0/- Sell at the break of 1087 targeting 1079. S/L above 1090.
NASDAQ100 0/-
DJIA 0/-

Commodities Daily Stance Comment

Gold 0/- Sell at the break of 1124 and target 1110. Stop above 1130.
Silver 0/- Sell at the break of 17.42 and target 17.15. Stop above 17.50.
Oil (CLF0) 0/- Sell at the break of 72.35 and target 70.50. Stop above 72.80.

Earnings Releases
Country Time (GMT) Name EPS exp. EPS prior Comment
Daily Trading Stance

Top 100 Global Stocks CDS Index

US Breakeven 10 Year 140

2 120





30-jul 30-sep 30-nov 30-jan 30-mar 30-maj 30-jul 30-sep 30-nov
10-12-2008 10-02-2009 10-04-2009 10-06-2009 10-08-2009 10-10-2009
US Breakeven 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 52.
AAA and BAA Corporate Bonds vs. 30yr US Treasuries
EURUSD Opt. Vol.
35 7

30 6

25 5

20 4

15 3



apr-08 jul-08 okt-08 jan-09 apr-09 jul-09 okt-09
nov-07 jan-08 mar-08 maj-08 jul-08 sep-08 nov-08 jan-09 mar-09 maj-09 jul-09 sep-09 nov-09

EUR-USD OPT VOL 1W EUR-USD OPT VOL 1M EUR-USD OPT VOL 1Y Moody BAA - US Generic Govt 30 Year Yield Moody AAA - US Generic Govt 30 Year Yield

Volatility at different time horizons. Too low, now? Spreads are easing, but still showing tight
corporate debt markets.
12 35






2 5

maj-09 jun-09 jul-09 aug-09 sep-09 okt-09 nov-09
feb-09 mar-09 apr-09 maj-09 jun-09 jul-09 aug-09 sep-09 okt-09 nov-09
GDMA Hungarian - German Czech Republic - German Poland - German

The VIX Index is now at 24.

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