WEEKLY UPDATE

29 September 2010

TECHNICALLY
SPEAKING

US Indices and Commodities

Q S&P-500 Index

Q NASDAQ COMPOSITE Index

Q Brent Crude Oil

Q CRB Index

Q CRB Non-Energy Index

Edouard Garrana
+33 1 41 89 73 42
egarrana@cheuvreux.com

www.cheuvreux.com Disclosures available on www.cheuvreux.com

 29 September 2010 Technically Speaking

COMMENTS ON THE S&P-500 INDEX as of 29-Sep-10

Q the long-term view: the S&P-500 index rallied and almost reached the ideal 1,250 objective of the
bullish H&S pattern posting a top at the 1,220 level on April. The profit taking triggered a panic situation
unfolding in complex ABCDE pattern. The overall weakness was supported by the February’s low and the
38.2% retracement level and bounced up.
The common 4-Year Low-to-Low Cycle favoured July as a potential basement or/and the month
of September as an extreme period to end the profit taking or the congestion phase. The month of
July proved to be the low of the correction. In addition, the 1 September was also a second and
probably the last down-leg of this congestion phase followed by a steep rally.

The weekly momentum turned positive resuming the uptrend.

Q the short/medium term view: the S&P-500 index has almost reached the ideal objective of the H&S
formation and reversed direction down from the projected April timing signalling an intermediate top. The
rally has lasted 14-month in time duration. The corrective phase dropped by 17% and unfolded in
complex ABCDE pattern lasting 2.2-month in time duration.
We remind you that the weekly momentum indicator turned positive. moreover, the S&P-500 index
breached the neckline of the Head-and-Shoulder formation confirming additional strength ahead.
The market broke the top posted in August and making now higher highs and higher lows. All the
above positive triggers could bring back the investors into the stock market, favouring the
resumption of the main uptrend.
Therefore the short-term correction could witness some profit taking and would be limited in time
and price action. The neckline of the H&S will hold the pullback at the 1,108-1,122 strong support
window.
However as long as the momentum indicator is supporting the progress, we expect the S&P-500
index to move towards 1,175-1,185 target window or even higher towards the top posted this year
within 1,220-1,240 target window.
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Timing: the next timing for a directional change points to end-September. The current rally could
probably persist lasting until mid-November timing.

Q Resistance 1,156-1,162 strong 1,178-1,182 strong 1,220-1,240 strong

Q Support 1,116-1,125 strong 1,088-1,095 strong 1,036-1,040 strong
The timings for a directional change are (change in trend ±1 day)
30 Sept. – 1 Oct.(key) 17-19 Oct.(key for a low?) 15-17 Nov.(key for a high?)

see charts next pages

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29 September 2010 Technically Speaking

DAILY CHART: S&P-500 INDEX

(5)or(3)
1200 1200
(b)
(3)
1150 1150
1M avg. (d) neckline of H&S
3M avg. Ï
1100 1100

(a)
1050 1050
(4) (c) Ï
1000 (e) 1000
complex correction in ABCDE (completed!)
950 950
5-wave ended in April followed by profit taking.
12-M avg. The correction has completed near the wave(4)
900 retracing 38.2% of the prior upmove! 900

(2)

0 Ð 0

Ïbuy trigger
Ï
Weekly MACD on daily chart (-0.97536, 5.80286) 40
30
20

0
the weekly MACD turned positive 10
0
-10
Ï
July August September November 2010 February March April May June July August September Novemb

DAILY CHART SINCE 2007 AND THE 200-PERIOD MOMENTUM INDICATOR

1300 1300

1250
the H&S objective almost reached+RET(62%) 1250

0.0%
1200 1200

1150 1150

1100 1100

1050 1050

1000 38.2% 1000

bounced from RET(382)
neckline
950
Ï 950

900 12month-MA 900

850 850

800 800

750
potential uptrend channel 750

700 700

100.0%
70 70
60
overbought zone 60
50 50
40 40
30 long-term Momentum Indicator 30
20
10 N 20
10
0 0
-10 eased overbought condition -10
-20 -20
by moving to the zero line
-30 -30
-40 -40
-50 -50

ct Nov Dec 2009 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Feb Mar Apr May Jun Jul Aug Sep Oct N

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 29 September 2010 Technically Speaking

COMMENTS ON THE NASDAQ COMPOSITE INDEX as of 29-Sep-10

DAILY CHART: NASDAQ COMPOSITE INDEX

2550 2550

2500
(3) or (5)? 2500

2450 (b) 2450

correction completed in ABCDE
2400 3M 2400

2350 (d) neckline 2350

2300
1M 2300

2250 2250

2200
(a) 2200

2150 2150
prior low=support (c)
2100 2100
(e)
2050 2050

2000
12M avg. positive H&S pattern confirmed 2000

1950 1950

1900 1900
5 5
exp
0 Ð 0

Ï
Ï
Weekly MACD on daily chart
100 100

50 50

the weekly MACD turned positive

0 0
Ï
September October November December 2010 February March April May June July Augus t September October Novem b

The weekly momentum is bullish combined with positive pattern!

Q the Nasdaq composite index has reversed direction down from the channel’s resistance
and the forecasted late-April timing signalling an intermediate top. The profit taking
unfolded in complex triangle formation. The overall correction dropped by 18.7% and
bounced up from the channel’s support and the 38.2% retracement level (see chart).
We remind you that the weekly momentum indicator turned positive. In addition, the
Nasdaq composite index confirmed a bullish Head-and-shoulder formation. These
facts could help bringing the investors back to the stock market.
However, any potential weakness towards the support of the neckline could be used
for long trade. Therefore the correction could be limited in time and price and has to
holds above the neckline of the H&S formation at the 2,225 level close. We expect
the Nasdaq composite index to move towards the minimum target at the 2,435-2,455
window and extreme towards the 2,500-2,535 window.

Q Timing: The projected 25 August timing halted the weakness. The next timing for a
directional change points to “30 Sept. - 3 Oct”.

4 www.cheuvreux.com
 29 September 2010 Technically Speaking

COMMENTS ON THE BRENT CRUDE OIL as of 29-Sep-10

DAILY CHART: BRENT CRUDE OIL

90 90

85 85

80 80
1M 100-MA
75 75

70 70

RET(38.2%)
65 65

60 60
200-MA
55 55
Ï
50 50

45 45
uptrend line
40 40

35 35
10 10
5 Ð 5
0
Ï 0
-5 -5
-10 -10
-15 -15
-20 -20
-25 -25
-30 -30
-35 -35

Dec 2009 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Feb Mar Apr May Jun Jul Aug Sep Oct Nov

The sideways continues!

Q the Brent crude oil has reversed direction down right at the forecasted mid-May timing.
The corrective phase or the pullback has been completed right at the projected mid-July
timing. The prior swing low held well the correction and offered a tactical buy.
The uptrend line triggered a bounce. The positive momentum indicator is supporting
the progress. But the rally is lacking upside strength.
As long as the trend is supported by the uptrend line, the market could retest the
prior swing top 82.85. The current rally is limited in time duration and would last until
end-September/earlier October then followed by correction.
The medium-term picture looks stuck in a broad congestion phase.

Q Timing: the low posted in July would trigger a potential top during the monthly of
September followed by profit taking. Therefore, the timing for a directional change
point to end-September/early-October for a potential top then down.

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 29 September 2010 Technically Speaking

COMMENTS ON THE COMMOSITIES CRB INDEX as of 29-Sep-10

DAILY CHART: COMMODITIES CRB INDEX

295
N 295

290 the low posted in January 2007 capped 290

285 285

280
neckline of potential H&S 280
Ð
275 275

270 Ð 270

265 265

260
200d-MA Ï 260

255 255
100d-MA
250 250

245
50.0% 245

240 240

235 235

230 230

225 225

220 220
Ï
215 215

210 210

205 205

200 200

5 5

Ð
0 0
Ï
-5 -5

-10 -10

2009 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Well supported with no follow-trough – the broad congestion

continues!
Q The CRB index breached the support of the long-term moving averages. The pullback
was supported by the 50% retracement level and bounced up.
The momentum indicator turned positive resuming the uptrend. As long as the
momentum indicator is oriented north and the CRB index holds above 260 level
close, the index could move again towards USD282-288 window.
However and in order to resume the main uptrend, the CRB index has to breach the
top posted in December 2009 on consecutive higher closes. On the contrary, we
expect the market to stay in congestion phase.

Q Timing: The next timing for a directional change points to early-October.

6 www.cheuvreux.com
 29 September 2010 Technically Speaking

COMMENTS ON THE COMMOSITIES CRB NON-ENERGY INDEX as of 29-Sep-10

DAILY CHART: COMMODITIES NON-ENERGY CRB INDEX

275 275
270 270
265 265
260 260
255 255
bullish breakout
250 250
245 245
240 240
235 235
230 100-MA 230
225 225
220 220
215 50-MA 215
210 bounced from RET:38.2% 210
205 205
200 200
195
200-MA 195
190 190
185 185
180 Major uptrend channel 180
175 175
170 170
165 165

Ð
5 5

0
Ï 0

-5
buy trigger above zero line -5

-10 -10

-15 Ï -15

Dec 2009 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Feb Mar Apr May Jun Jul Aug Sep Oct No

The main trend is up, buy on dips.

Q the commodities CRB non-energy has been trending within a major uptrend channel.
The buy trigger on the momentum indicator has resumed the main uptrend.
As long as both the prior swing low holds at the USD240.00 close, the CRB non-
energy could move towards the resistance level of the uptrend channel within 275-
280 target window or higher towards 287-290. The rally could persist until mid
December timing.

Q Timing: We expect the index to rally until mid-December timing. However, we do

not exclude earlier high by early-mid November.

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