Rohr Report - Bitly

Rohr Report Weekly Overview Monday, October 26, 2009

Key Views ▪ As we noted recently, the trends remain significantly contentious and convoluted, and very simple all at the same time. Just as the equities reach the sort of major technical and psychological levels that might reverse the sustained uptrend since the March lows (at least for a major correction) earnings and macroeconomic data are extremely mixed. As just the most recent examples, UK data last week (including Q3 Advance GDP) was significantly weaker than expected, and unexpected uptick in US Weekly Initial Jobless Claims was accompanied by also unexpected 0.3 percent drop in the US House Price Index (AUG.) Yet stock markets continue to be encouraged by better earnings, even if there is still a lack in top line growth. As noted in last Friday's TrendView BRIEF UPDATE (http://bit.ly/1bFTXZ), the most interesting aspect of all this good news is that the equities have stalled as expected into the major technical resistance back at levels from which they experienced last fall's significant failure. As such, it is also not much of a surprise that while the fixed income and US dollar are under some pressure, it is quite a bit less pronounced than might have been expected after equities pushed above the late September post-FOMC meeting highs two weeks ago. ▪ And in that way it all remains very simple up to this point. The markets are seemingly back to the sort of second half of 2007 psychology we have noted previous. There is that psychological lag for classical intermarket counterpoint between any initial equities strength and sustained bid in the stock markets. So when equities pushed up three weeks ago from the previous week's sharp selloff low, the fixed income and US dollar have no problem holding onto some of their previous gains. However, once DJIA shows that it wants to attack the low 10,000 area on a sustained basis, the psychology turns stale for the other asset classes. That said, the major resistance above DJIA is not until the 10,300-350 range. That is both the Fibonacci 0.50 retracement of the entire bear market and the 10,325 pre-plunge Close from early last October. Extended resistance is as high as 10,500. The similar resistance for the December S&P 500 future is the top of a major downside Gap that began at 1,082 and extends to 1,102-08, with extended resistance as high its own 1,125 major Fibonacci 0.50 retracement of the bear move. ▪ December T-note slipping below 118-16/-00 support Tolerance at 117-24 can likely retest the more prominent 116-24/16 that held so well through September. That relates well to strong sister Bund slipping its own 121.00-120.80 support for a likely retest of 120.00, even as weak sister December Gilt recovers nicely from its 117.00-116.75 area support; which could not occur without some sense the UK economy will not reignite robust growth near term. ▪ Similarly, the US Dollar Index would likely be faring far worse than .7500 area supports at .7530 and .7470-50 below that if inflation concerns were credible. It is also very interesting that Gold failed to push above 1,065 for last week's Close, with rising weekly oscillator resistance up to 1,070 this week. And in spite of what we see as speculative US dollar driven strength in Crude Oil above 80.00, the Gold belies the major inflation argument for now. ________________________________________________________________________________________________________________________________________________________________

This review of economic report releases, general news, market tendencies, and/or specific technical trend contingencies is strictly for educational purposes. This information is provided without specific consideration of the portfolio requirements, suitability for financial risk, or psychological state of any recipient. Any use of this information to implement actual trades or investments is the sole responsibility of the individual or entity authorizing that decision. This waives your right to claim of explicit or incidental liability for financial loss or forgone profit against Rohr International, Inc. or any of its informational contributors under all circumstances. Information contained herein may have already been disseminated to others who may have acted upon it, including principals or employees of the advisor. By review of the previous and following comments you confirm your agreement with these stipulations.

A service of Rohr INTERNATIONAL,

Inc.

© 2009 All international rights reserved. Redistribution strictly prohibited without written consent

Weekly Overview Monday, October 26, 2009

Reports & Events Once again light early week reports lead to intensifying economic releases late week. However, in spite of decisions by the Reserve Bank of New Zealand and Bank of Japan, there is quite a bit less impact from central banks. Even extensive US debt auctions are focused at the shorter end of the curve. This leads us to believe the focus is back on US housing and consumers tomorrow and into Friday's Personal Income and Spending. Europe has reverted to Standard Time this week, while the US does so this weekend. As England and Europe set clocks back one hour to revert to Standard Time (GMT for England and Ireland), it makes for some interesting displacements of the early morning US reports right into lunchtime in Europe as well as European Closes coming earlier in the US trading days. Light early week reporting influences significantly intensify into a late week crescendo. There is so much key economic data it is hard to know what to highlight. However, today does bring Dallas Fed Manufacturing Activity (OCT), followed by tomorrow's S&P/Case-Shiller Home Price Index (AUG) and US Consumer Confidence (OCT.) The acceleration of economic release influences begins with Wednesday's German and Australian CPI's, followed by US Durables Orders (SEP), and the often less than credible New Home Sales (SEP.) Thursday sees typical late month figures on German Employment and various Euro-zone confidence indicators (OCT), as well as the first look at Q3 Advance US Gross Domestic Product that may be quite important in light of the major undershoot in the UK last week. Thursday also brings the next set of now important Weekly US Initial Jobless Claims. As the end of the calendar month as well as the week, Friday brings the typical economic data tsunami. That begins with Japanese Household Spending and Construction Orders (both SEP) leading into German Retail Sales (SEP), and ending up with US Personal Income and Consumption (SEP) and dual Midwest PMI's (OCT.) Central bank communications and reports are conspicuous by their absence this week. Even with Reserve Bank of New Zealand and Bank of Japan interest rate decisions Thursday and Friday respectively, the communication from central bankers and treasury officials is limited to the ECB’s Stark is speaking in Koenigswinter and US Treasury Secretary Geithner speaking at the SIFMA Annual Meeting tomorrow, Wednesday's speech by Reserve Bank of Australia Assistant Governor Edey, and Friday's speech by the ECB's Bini Smaghi in Capri, Italy. Debt activity is less prominent once again, yet with some very interesting highlights. The highlights include Bank of England reverse auctions between today and Wednesday, the typical range of sizable US shorter-dated debt auctions into Thursday, Wednesday's €5 billion 5-year Bobl (2.5%) auction, a €2 billion 10-year index-linked Bund (1.75%), and Thursday's 3-year (2.5%) and 10-year (4.25%) Italian BTP auction along with a 7-year CCT auction. Corporate earnings and guidance this week is too extensive to summarize season here. We refer you to the Day-by-Day listing below, with keen interest once again on financials as well as quite a few indications for consumer product firms and pharmaceutical manufacturers. Earnings strength has bulls baying at the moon as expected, at least until this weekend. As impressive as the equities rally has been, strong earnings coincide with the waxing moon from last week right into next Monday, encouraging upbeat 'animal spirits.' So while the recent gap higher is a hostage to fortune if violated, it's likely equities still hold near-term dips for now. Page 2 of 5. A service of Rohr INTERNATIONAL,

Inc.

© 2009 All international rights reserved. Redistribution strictly prohibited without written consent.

Weekly Overview Monday, October 26, 2009 Day-by-Day While we prefer to have definitive dates for economic releases, both Australian NAB Business Confidence (Q3) and UK Nationwide House Prices are only known to be released between today and this Friday. Also, pronouncements from US and other countries government officials on the TARP, PPIP, TALF or other plans may occur any time, or on short notice. There remains a bit of a dilemma with any extended preview of US Treasury Department activity insofar as its appearances and speeches schedule had not been updated for this week at this time. Sunday already began a one week influence on the markets, as England and Europe set clocks back one hour to revert to Standard Time (Greenwich Mean Time for England and Ireland) from summer clock settings. As the US holds off on that until next Sunday, it makes for some interesting displacements of the early morning US reports right into lunchtime in Europe. Monday is the first of two somewhat lightish reporting days on the way into the mid-to-late week end of month reporting crunch. That said, there are still some important influences beginning with Australian Producer Price Index (Q3) as the only Far Eastern input prior to heading over to Europe for German GfK Consumer Confidence (NOV) and the Bank of England Asset Purchase Facility Report and a £1.4 billion BoE reverse auction of maturities between 10 and 15 years. While in the US we only see the Chicago Fed National Activity Index (SEP) and Dallas Fed Manufacturing Activity (OCT) followed by the typical late afternoon (European time) French Total Jobseekers and Jobseekers Change (SEP), we also hear from the Bank of England’s Posen on ‘non-monetarist approach to quantitative easing’, and get the results of the $7 billion US 5-year TIPS auction. Potentially influential earnings reports (among others) include Corning, RadioShack, McGraw Hill, Verizon and Wyeth. Tuesday also sees limited yet telling economic data, albeit the lack of any Far Eastern releases cedes the lead to Europe with French Business Survey Overall Demand (OCT) and the French and Italian Consumer Confidence figures (both OCT), after which the ECB’s Stark is speaking in Koenigswinter, Euro-zone M3 (rolling three-month figure for SEP) is released, as well as the UK CBI Distributive Trades (OCT) along with a £1.4 billion reverse auction of Gilts with maturities between 16 and 46 years. The US starts off with the early morning Weekly ICSC-Goldman Sachs US Same-Store Sales (for the week ending OCT 25) and S&P/Case-Shiller Home Price Index and S&P/Case-Shiller Composite-20 (both AUG), followed by US Consumer Confidence and the Richmond Fed Manufacturing Index (both OCT), US Treasury Secretary Geithner speaking at the SIFMA Annual Meeting in New York, a $44 billion 2-year T-note auction and typical late afternoon ABC Consumer Confidence (for the week ending OCT 25.) Potentially influential earnings reports (among others) include Akzo Nobel, Canon, Daimler, E*TRADE Financial, Honda, Johnson Controls and Willis Group. Wednesday begins accelerated economic reporting into the end of the month with Japanese Retail Trade and Large Retailers' Sales (both SEP) and a ¥2.4 billion 2-year JGB auction, followed by Australian DEWR Skilled Vacancies (OCT), Reserve Bank of Australia Assistant Governor Edey speaking in Sydney and Australian Consumer Prices Index (Q3) along with the important indications on its RBA Trimmed Mean and Weighted Median indices. After that we see the final Far Eastern influence of the day from Japanese Small Business Confidence (OCT.) Page 3 of 5. A service of Rohr INTERNATIONAL,

Inc.

© 2009 All international rights reserved. Redistribution strictly prohibited without written consent.

Weekly Overview Monday, October 26, 2009

(Wednesday continued) After that it's over to Europe for German Import Price Index (SEP), and various Italian sentiment indications on Business Confidence, their Services Survey and Retailers' Confidence General (all OCT) as well as various reports throughout the day time of the German Consumer Price Index (OCT Preliminary), the ECB Bank Lending Survey, and further debt auction activity that includes a €5 billion 5-year Bobl (2.5%) along with a €2 billion 10-year index-linked Bund (1.75%) and a £1.4 billion BoE reverse auction of shorter-term maturities between four years and ten years. It is a reasonably light yet interesting reporting day in the US, where we see Weekly MBA Mortgage Applications (for the week ending OCT 23), Durable Goods Orders (SEP) along with the important ex-Transportation figures, and the sometimes less than believable New Home Sales (SEP), followed by a $41 billion 5-year T-note auction. Potentially influential earnings reports (among others) include Aflac, GlaxoSmithKline, Kaiser Aluminum, Lazard Ltd, National Australia Bank, Newell Rubbermaid, PepsiAmericas and SAP AG. Thursday starts off with central-bank influence from the Reserve Bank of New Zealand interest rate decision (broadly expected to be ‘no action’ at 2.50 percent) and possibly an interesting statement out of one of the other buoyant Eastern economies. That is followed by the Japanese Nomura/JMMA Manufacturing Purchasing Manager Index (OCT) along with their figures for Industrial Production (SEP Preliminary) and Corporate Service Price Index (SEP) prior to heading over to Australia for its Conference Board Leading Index (AUG) and HIA New Home Sales (SEP), and then one last indication from Japan on Vehicle Production (SEP), after which it is over to Europe for important figures on German Unemployment Change and Rate (OCT), Italian Hourly Wages (SEP) and typical late month UK data on Mortgage Approvals, Net Consumer Credit and Net Lending Secured on Dwellings (all SEP) as well as M4 Money Supply (SEP Final.) Then it's back to the Continent for Italian Large Company Employment (AUG), and various end of month Euro-zone confidence indicators on Economic Confidence, Consumer Confidence, Business Climate Indicator (OCT), Industrial Confidence and Services Confidence (all OCT), a 3-year (2.5%) and 10-year (4.25%) Italian BTP auction and 7-year CCT auction. In North America we see Canadian Industrial Product and Raw Materials Price Indices (SEP), followed by the US Gross Domestic Product (Q3 Advance) that should be very interesting in light of last week significantly weaker than expected UK figures, along with the attendant US Personal Consumption and Gross Domestic Product Price Index, followed by what also may be a fairly important Weekly US Initial Jobless Claims (for week ending OCT 24) and Continuing Claims (for the week ending OCT 17), and the Euro-zone IFO Business Climate Survey by Industry (OCT) that does not tend to be very influential, along with the longest dated US debt offering the week, a $31 billion 7-year T-note. Potentially influential earnings reports (among others) include ABB, Chicago Mercantile Exchange Holdings Inc., Colgate-Palmolive, Deutsche Bank, Eastman Kodak, Genworth Financial, Gold Fields Limited, MetLife, Monster Worldwide, Moody's Corporation, Newmont Mining, Office Depot, OfficeMax, Sprint Nextel, Stanley, United Stationers, Volkswagen and Waste Management.

Page 4 of 5. A service of Rohr INTERNATIONAL,

Inc.

© 2009 All international rights reserved. Redistribution strictly prohibited without written consent.

Weekly Overview Monday, October 26, 2009 Friday is a very robust economic influence day that sets the stage for next week's very important early month reports. It begins with the BoJ holding its regular policy board meeting, after which it releases its Outlook, the Japanese Jobless Rate and Job-To-Applicant Ratio along with its Household Spending (all SEP), after which we see the Tokyo Consumer Price Index (OCT) and Japanese National Consumer Price Index (SEP) and the Bank of Japan interest rate decision (broadly expected to be ‘no action’ at 0.10 percent) along with a brief yet possibly telling statement. And all of that is just the early day preliminaries before the typical top of the morning release of the UK GfK Consumer Confidence Survey (OCT), followed by Australian Private Sector Credit (SEP) and Japanese Housing Starts and Construction Orders (both SEP) prior to heading over to Europe for further potentially important influences from German Retail Sales (SEP), French and Italian Producer Price Indices (both SEP) and the Italian Consumer Price Index (OCT Preliminary), as well as the ISAE presenting a new report on the currently very topical 'Public Policies and Redistribution' followed by the Euro-zone Consumer Price Index Estimate (OCT) and Euro-zone Unemployment Rate (SEP.) After that it's over to North America for Canadian Gross Domestic Product (AUG) and US Personal Income and Consumption (SEP), along with the attendant figures for the PCE Deflator and Core, the Employment Cost Index (Q3), Chicago Purchasing Manager Index (OCT), along with University of Michigan Consumer Confidence (OCT Final) and NAPM-Milwaukee (OCT), followed by the ECB's Bini Smaghi speaking on a panel in Capri, Italy, and the final influence of the day from the Bloomberg Financial Conditions Index (OCT.) Potentially influential earnings reports (among others) include Alcatel-Lucent, Aon, AUDI, Macquarie Group Limited, Mitsubishi, Panasonic, Samsung, Sony and Weyerhaeuser. We hope you find this helpful. -Rohr (www.rohrintl.com) ___________________________________________________________________________________________________________________________________________________________________________________________________

This analysis is confidential. It may also be legally privileged. If you are not the intended recipient you may not copy, forward, disclose or use any part of it. If you have received this analysis in error, please delete it and all copies from your system and notify sender immediately by e-mail to [email protected]. Internet access cannot be guaranteed to be timely, secure, or error and virus-free. While based upon price data and market information from sources believed reliable, the analyst(s) do(es) not accept liability for any errors or omissions, and (do)es not guarantee any profitability or avoidance of loss based upon the content of the foregoing analysis.

Page 5 of 5. A service of Rohr INTERNATIONAL,

Inc.

© 2009 All international rights reserved. Redistribution strictly prohibited without written consent.