Weekly

.
Last week, markets for the most part were convinced the stress tests were ineffective. There is simply little to no
trust in the results. Some banks refused to provide full details on sovereign debt exposure -- ahem, hello Germany.
Outlook Friday's close saw a mixed performance from the USD, but SPX closed above 1100 for the first time in nearly five
25 July 2010 weeks. Undoubtedly earnings-driven. Weekly ranges have been narrow, so I expect an expansionary move soon...
6E short blw 1.3100 ES short blw 1130 DAX neutral to long CL short blw 79.40 (!)

Calendar GMT Event Mkt Risk Exp Prev Remarks

Monday 2300 AU Producer price index Q2 Ccy Med 0.8 1.0 AUDUSD risk barometer (2 day)
1400 US New home sales Jun C/E Med 315K 300K Watch MoM figure
Tuesday 0000 AU Confidence board leading index May C/E Med AUDUSD intraday
0600 EU GFK consumer confidence survey Aug Equ Med 3.5 3.4 DAX intraday
CH UBS consumption indicator Ccy Med 1.737 Watch USDCHF
1300 US Case Shiller home prices May Equ Med 144.56 S&P, DAX sympathy
1400 US Consumer confidence Jul C/E High 51.0 52.9 S&P, USD risk barometer (2 day)
Wednesday EU German consumer price index Jul C/E High 0.9% ESX, DAX risk barometer (2 day)
0130 AU Consumer price index Q2 YoY Ccy High 3.4 2.9 AUD, NZD risk barometer (2 day)
1230 US Durable goods Jun C/E High 1.0 -0.6r USD, S&P, DAX sympathy (watch ex-trans)
1430 US EIA petroleum status report Oil High
2100 NZ RBNZ rate decision Jul 29 Ccy High 3.00 2.75 NZD risk barometer (1m)
2245 NZ Trade balance Jun Ccy Med 368M 814M NZD risk barometer (2 day)
2350 JP Retail trade Jun YoY Ccy Med 3.2 2.8 USDJPY risk barometer (2 day)
Thursday 0100 AU New home sales Jun Ccy Med -6.4 AUD, NZD risk barometer (2 day)
0755 EU German unemployment change Jul C/E High -20K -21K Euro, ESX, DAX, S&P risk barometer (3 day)
0830 UK Net consumer credit Jun Ccy Med 0.2B 0.3B GBPUSD risk barometer (2 day)
UK Mortgage approvals Jun Ccy Med 48.5K 49.8K GBPUSD risk barometer (2 day)
0900 EU Industrial confidence Jul C/E Med -5 -6 ESX, DAX intraday
EU Economic confidence Jul C/E Med 99.1 98.7 ESX, DAX intraday
EU Services confidence Jul C/E Med 5 4 ESX, DAX intraday
2301 UK GFK consumer confidence survey Jul Ccy Med -20 -19 GBPUSD intraday
2330 JP Consumer price index Jul YoY Ccy Med -0.8 -0.9 USDJPY intraday
JP Jobless rate Jun Ccy High 5.2 5.2 USDJPY risk barometer (2 day)
Friday 0130 AU Private sector credit Jun YoY Ccy Med 3.1 2.7 AUDUSD intraday
0900 EU EZ unemployment rate Jul YoY C/E Med 10 10 Euro, ESX, DAX risk barometer (2 day)
EU EZ consumer price index est. Jul YoY C/E Med 1.7 1.4 Euro, ESX, DAX risk barometer (2 day)
CH KOF Swiss leading indicator Jul Ccy Med 2.3 2.25 USDCHF intraday
1230 CA Gross domestic product May MoM Ccy Med 0.2 0.0 USDCAD risk barometer (2 day)
US Gross domestic product Q2 A C/E High 2.5 2.7 Across the board (3 day)
US Personal consumption Q2 A Equ Med 2.4 3.0 S&P risk barometer (2 day)

The calendar promises some good movement this week.

Last week, market's suspicions were confirmed. The stress tests were ineffective. There is simply little to no trust in the results.
The design was flawed, execution was spotty, and some banks refused to provide full details on sovereign debt exposure.
(Ahem...hello, Germany.) Friday's close saw a mixed performance from the USD but the S&P 500 closed above 1100 for the first
time in nearly 5 weeks. Currently Asian stocks are up on the stress test results.
This week, the calendar promises more movement. Wednesday in particular looks good for both equities and currencies.
As this is one of my favorite reversal days, I will take a very close look at where my favorite instruments are in relation to their
ranges. (See charts below.) Continuing earnings releases may complicated the macro picture.
Stories hitting the wires now are focusing on how banks across the world, but particularly in Europe, the UK, and the US,
will finance short term lending. Of course, this means they will have to do some long term fund raising. Most banks are having a
hard time doing both. If they don't start lending soon, the recovery will stall and the odds of a double dip in the markets increase
substantially.

See charts below.

The Lonely Trader

Disclaimer: All information is provided as market commentary and not as investment or trading advice. The Lonely Trader
expressly disclaims liability, without limitation, for losses or damages resulting from reliance on such information. Past
results are no guarantee of future performance. Please consult a registered financial advisor before risking your capital.
EURUSD weekly outlook

Short on good technical setups between 1.30 and

1.31, with SL above 1.3125. TP 1.2535. Watch
intermediate levels and close trade if good support
is seen.

4
Quarterly resistance
trend line is now support,
but will the market 1
respect the line?

EURUSD has broken above key resistance. The euro was well bid on average volume despite the results of the stress tests, but
did not move as much as I had projected (see grey arrows). I am seeing a very clear 5 wave formation on the charts at the
moment, with a topping pattern below 1.3. This week will be an important one in terms of the direction of the euro across the
board. I have no doubt some of the wave groupies out there will assume a corrective pattern will emerge this week. If true, we are
in wave A and it looks complete. (6E is currently trading at 1.2935/37.) Sovereign bids are still noted at 1.2485, so keep this area in
mind as a potential bottom for the current cycle. Near term support has solidified above 1.27, but I am not confident this level will
hold if a good selling program gets underway. 1.26/1.25 should be better supported. I will also be watching equities for
correlations and divergences. At the moment, offers are clustered from 1.3085 up to 1.3110, with stops above 1.3120. EURJPY is
back up at 113.25, with large stops above 113.50. If this level breaks, look for the chance of a sustained EURUSD break above 1.31
as well. Long term, there is the possibility that EURUSD could trade to 1.38 or 1.15. Not getting a clear picture on range
probabilities this week, so I'm assessing the market based on support, resistance, and daily momentum.

The Lonely Trader

Disclaimer: All information is provided as market commentary and not as investment or trading advice. The Lonely Trader
expressly disclaims liability, without limitation, for losses or damages resulting from reliance on such information. Past
results are no guarantee of future performance. Please consult a registered financial advisor before risking your capital.
ES90 weekly outlook

150 SMA
flattening

Weekly range extreme

Weekly range extreme

The ES September contract is moving technically. The ES profile has changed after Friday's close above 1100. This is the first time
the ES has closed above 1100 in almost 5 weeks, and the higher high above the 14 July close signals an extension to at least 1110
this week. For the current technical pattern to complete, the market would have to trade up to 1147. I see little chance of that
happening this week, but earnings could provide the needed force to get through some tough resistance at 1110 and 1130. I had
expected the failure at 1100 to push the market down to key support at 1044, but the strong Tuesday reversal off of 1050 has me
thinking this rally has room to run. (The Tuesday settlement price is my favorite directional indicator. Although it works about half
the time, it can present very good R:R setups.) My bias is still short below 1130. Range studies put a close above that level at 32%.
This is about twice the probability of last week. Odds of a touch at 1110 before Wednesday are 63%. This chart is a bit messy, but
bear with me: Key resistance at 1110, 1120 and 1130. Range extreme at 1147. Key support at 1085, 1060, 1050 and 1044. Range
extreme at 1140. One week HVNs at 1055, 1063, 1078.50, and 1090. In other words, lots of support! Last week was a narrow
range week of 50.25 points. My range studies indicate primary range projection of 60 points and an alternate at 47.5.

The Lonely Trader

Disclaimer: All information is provided as market commentary and not as investment or trading advice. The Lonely Trader
expressly disclaims liability, without limitation, for losses or damages resulting from reliance on such information. Past
results are no guarantee of future performance. Please consult a registered financial advisor before risking your capital.
DAX weekly outlook
Weekly range extreme ↗
I have NO IDEA where this market is going, other than to
say that this consolidation will continue until it doesn't
and my bias is slightly up...oddly enough, this has been
my most profitable instrument for the last two weeks.

Likely range extreme

Likely range extreme

Weekly range extreme

The DAX 30 remains volatile and range bound. This index is coiling up and I believe a very sharp move is just around the corner.
Volume over the past three weeks has been consistent and a bit on the low side, which explains some of the chop. I continue to
believe that as long as this index remains above 5600, the uptrend is still intact. Last week the market rallied on the IFO surprise,
and this week we have more key German data. Wednesday's CPI and Thursday's employment data could push the DAX out of its
range -- my bias is a break will occur on the high side before it will return to value. The Finance Minister has revised his forecast
for German GDP to 2%, from 1.4%, which could have been based on some of the data that will be released this week. Like I've said
before, anything can happen in the DAX. Short term resistance levels are 6280 and 6350, with 6500 being key statistical resistance
and 6600 being the extreme of my weekly range studies. Short term support levels are 6050 (technical), 6000 (range pivot), 5910
(rejection low), and 5800 (responsive buying). One week TPNs at 6180, 6140, 6050, 6010, and 5955. It's important to keep in mind
that currently the DAX sits in the middle of a very large range -- from the 2008 range high to the 2009 range low.

The Lonely Trader

Disclaimer: All information is provided as market commentary and not as investment or trading advice. The Lonely Trader
expressly disclaims liability, without limitation, for losses or damages resulting from reliance on such information. Past
results are no guarantee of future performance. Please consult a registered financial advisor before risking your capital.
 Crude weekly outlook

Weekly range extreme

Weekly range extreme

Crude will continue to lose ground in a weak global economy. The rally extended early last week before failing just above the
projected top at 78. The range top of 79.38 was breached, with Friday's high at 79.60. But the close was below 79, putting an
extension to the next level of 82 in question. I may short this contract this week and target 72. Range studies suggest not more
than 3 handles to the upside and not more than 5 handles to the downside, making 82 and 72 the projected extremes for the
week, with 80, 78, and 75 the only significant intermediate range references. A clear break targets 85. I'll be watching the EIA
petroleum status report as usual for near term direction through Friday.

Interested in contributing to this letter? Jay Schneider -- FX and futures, range studies
San Diego Area, USA
Please contact the number over there --> 760-444-0307
Or, email me: jay AT lonelytrader DOT com

The Lonely Trader

Disclaimer: All information is provided as market commentary and not as investment or trading advice. The Lonely Trader
expressly disclaims liability, without limitation, for losses or damages resulting from reliance on such information. Past
results are no guarantee of future performance. Please consult a registered financial advisor before risking your capital.