Newsletter 26/10/2007

Trading Discussion News and Economy
1

A) CALENDAR

-25/10/2007
-GMT 23:30 JPN CPI–Tokyo (m/m), (Oct) EST -0.1% PREVIOUS 0.1%
-GMT 23:30 JPN CPI–Tokyo (y/y), (Oct) EST 0% PREVIOUS -0.2%
Definition
The CPI-TOKYO measures the rate of inflation experienced by consumers living in Tokyo.

-GMT 23:30 JPN CPI–Tokyo core (m/m), (Oct) EST 0.0% PREVIOUS 0.0%
-GMT 23:30 JPN CPI–Tokyo core (y/y), (Oct) EST -0.3% PREVIOUS -0.3%
Definition
This indicator is a derivative of CPI-TOKYO that excludes the volatile fresh food components of the index.

-GMT 23:30 JPN CPI–Japan (m/m), (Sep) EST 0.1% PREVIOUS 0.5%
-GMT 23:30 JPN CPI–Japan (y/y), (Sep) EST -0.1% PREVIOUS -0.2%
Definition
The consumer price index (CPI) gauges the average change in retail prices for a fixed market basket of goods and services. The CPI data is compiled from a sample of prices for food, shelter, clothing, fuel, transportation and medical services that people purchase on daily basis.

-GMT 23:30 JPN CPI–Japan core (m/m), (Sep) EST 0.0% PREVIOUS 0.2%
-GMT 23:30 JPN CPI–Japan core (y/y), (Sep) EST -0.2% PREVIOUS -0.1%
Definition
This indicator is a derivative of CPI-JAPAN that excludes the volatile fresh food components of the index.

-GMT 23:50 JPN Industrial outp (m/m), (Sep) EST -1.3% PREVIOUS 3.5%
-GMT 23:50 JPN Industrial outp (y/y), (Sep) EST 1.1% PREVIOUS 4.4%
Definition
Industrial production consists of the total output of a nation��s plants, utilities, and mines. From a fundamental point of view, it is an important economic indicator that reflects the strength of the economy, and by extrapolation, the strength of a specific currency.

-26/10/2007
-GMT 06:00 GER GFK Index (Nov) EST 6.5 PREVIOUS 6.8
Definition
This index is based on the following question to consumers: �How do you think the general economic situation will develop in the next 12 months?� (improve � stagnate � deteriorate). About 2000 interviews are conducted each month.

B) SUPPORT-RESISTANCE
EURO/USD USD/JPY GBP/USD
R3 1.4380 114.90 2.0585
R2 1.4360 114.55 2.0555
R1 1.4345 114.35 2.0530
S1 1.4305 113.75 2.0505
S2 1.4285 113.60 2.0480
S3 1.4265 113.35 2.0455

C) WATCH
-Interest Rates

  • (25/10/2007) GMT 23:30 JPN CPI�Tokyo
  • (25/10/2007) GMT 23:30 JPN CPI�Tokyo-Core
  • (25/10/2007) GMT 23:30 JPN CPI�Japan
  • (25/10/2007) GMT 23:30 JPN CPI�Japan-Core

D) TRADING TIPS
THE ELLIOT WAVE
The basic objective of wave analysis is to follow and interpret correctly the development of patterns in the markets. The Wave Principle’s rules and quidelines provide an objective basis both for making these interpretations and for trading
signals.
In a series of articles published in 1939 by Financial World magazine, Elliot pointed out that the market unfolds according to a basic rhythm or pattern of
five waves in the direction of the trend at one larger scale and three waves against that trend. In a rising market, this five/three- wave pattern forms one complete bull/bear market cycle of eight waves. The five-wave upward movement as a whole is referred to as an impulse wave, while the three-wave countertrend movement is described as a corrective wave.

2

US SESSION

A)CALENDAR

-GMT 13:45 USA Michigan Sentiment (F Oct) EST 82.5 PREVIOUS 82.0
Definition
This survey measures the attitudes and expectations concerning both present and future economic conditions of 500 consumers. Just like Consumer Confidence, the
level of consumer sentiment is directly related to the strength of consumer spending. It is almost identical, with two subindexes - expectations and current conditions, but
has two monthly releases, a preliminary and final reading. The consumer expectations portion of the Michigan survey is a component of the leading economic indicators
index. Consumer spending accounts for two-thirds of the economy, so the markets follow any indicator relating to consumer behavior and attitudes. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. It is interesting to note that changes in consumer sentiment and retail sales don’t move in tandem.

B)SUPPORT - RESISTANCE

  EURO/USD                     USD/JPY                GBP/USD

R3 1.4460 115.10 2.0650

R2 1.4430 114.90 2.0610

R1 1.4400 114.55 2.0570

S1 1.4315 114.10 2.0505

S2 1.4300 113.75 2.0455

S3 1.4265 113.55 2.0415

C)WATCH

-Interest Rates

-GMT 13:45 USA Michigan Sentiment

D)TRADING TIPS

THE ELLIOT WAVE
The basic objective of wave analysis is to follow and interpret correctly the development of patterns in the markets. The Wave Principle’s rules and quidelines provide an objective basis both for making these interpretations and for trading
signals.
In a series of articles published in 1939 by Financial World magazine, Elliot pointed out that the market unfolds according to a basic rhythm or pattern of
five waves in the direction of the trend at one larger scale and three waves against that trend. In a rising market, this five/three- wave pattern forms one complete bull/bear market cycle of eight waves. The five-wave upward movement as a whole is referred to as an impulse wave, while the three-wave countertrend movement is described as a corrective wave.