Review The S&P 500 was little changed at 1,090.25 yesterday at 4:15 p.m. in New York after losing as much as 1.3 percent as BP Plc said it temporarily halted the flow of oil from its Gulf of Mexico well for the first time in about three month, and Goldman Sachs Group Inc. rallied before settling the federal govern-ment’s fraud lawsuit. Google Inc. reported after the close profit that missed estimates as the company ramped up spending. Excluding some items, profit was $6.45 a share in the second quarter, where analysts had estimated $6.52. Strategy Looking ahead we are expecting a continuation of the recent rally based on a positive outlook for company earnings. Our view is that last quarter’s sell-off has been overdone and we are continuing to a long bias with a buying opportunity just above 1,083.00. We think that last night’s positive news from BP to Goldman Sachs represent a victory for both companies and may reassure the market in the short-term. Looking at the economic cal-endar for today , we think that solid earnings from Citigroup to General Electric may override a pull back in consumer confidence. Alternative Scenario Negative US and Euro zone fundamental news flow could lead to a break-out of yesterday’s low at 1,076.25 opening the way for a more aggressive move to S2 at 1,065.50. EUR/USD INTRADAY Review The dollar dropped to a two-month low against the euro as reports showed manufacturing in the New York and Philadelphia regions expanded at the slowest pace this year. The euro advanced above $1.29 for the first time since May as demand at Spain’s government bond sale eased concern that nations in the currency region won’t be able to finance their deficits. The euro gained 1.6 percent to $1.2941 at 4:15 p.m. in New York, from $1.2743 on Wednesday. Strategy Looking ahead we are expecting a continuation of this month’s uptrend for the euro, extending its positive momentum. We think this move higher in euro is a result of a weak dollar and a slightly better investor sentiment about the Europe’s banking sec-tor. Our view is that a robust earnings season may not be enough to reverse this negative momentum for the dollar and we may need to wait until we have evidence of stable job creation before we see a return to dollar strength. Also, today’s CPI may show that the cost of living in the U.S. dropped in June for a third straight month adding some pressure to the dollar. Alternative Scenario Negative Euro zone fundamental news flow could lead to a break-out of the previ-ous support at 1.2800 opening the way for a more aggressive move to yesterday’s low at 1.2709. Crude Oil (Aug 10) INTRADAY Review Crude oil tumbled after government reports bolstered concern that the U.S. economic recovery will slow, reducing fuel consumption. Oil dipped 0.6 percent after the Federal Reserve said that U.S. factory output fell 0.4 percent in June, the biggest decline in a year. Other reports showed factories pulled back in the New York and Philadelphia regions in July. The major stock indexes dropped at least 1.2 percent before rebounding after oil settled to close little changed. The contract dropped as low as $75.33 during the session. Strategy Looking ahead we are expecting a continuation of the recent rally as a rebound in equities in conjunction with strong com-pany earnings may push the oil price higher. We think Crude price is still attracting, so we favour a long position at $76.00 per barrel with a conservative target of $77.67 as investors may start to book some profit after this month’s strong rally. Also, the recent weak-ness in the dollar and encouraging oil inventories may positively affect the oil price in the short-term. Alternative Scenario Negative US and Euro zone fundamental news flow could lead to a break-out of yesterday’s low at $75.33 opening the way for a more aggressive move to S2 at 74.28.

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