The S&P futures bounced around on Friday to end the session with slight gains after the U. S. reported slightly better than expected Trade Balance and Consumer Sentiment data. Even though the numbers beat expectations, the data is still dismal and indicates heavy economic contraction.

The U. S. will release some more significant monthly data this week, highlighted by Building Permits and PPI on Tuesday followed by CPI on Wednesday. Investors are becoming increasingly concerned about the level of prices in the U. S. economy. A worst case scenario would show excessive growth of producer prices coupled with dropping consumer prices, raising cost and lowering revenue.

As anticipated, the USD/JPY continued its consolidation as investors contemplate a retest of the highly psychological 100 level.  The movement of the USD/JPY will likely depend on whether U.S. equities can prove this is more than a bear market rally.

Meanwhile, our 3rd tier downtrend line is creeping towards present price, so the USD/JPY will have to make up its mind soon.  The near-term trend of the USD/JPY hangs in the balance, and we would not be surprised to see the currency pair wake from its slumber either today or the beginning of next week.

The Cable also followed U. S. equities higher, propelling from our 1st tier downtrend line and back above the psychological 1.40 area. However, the GBP/USD is backing away from our 2nd tier downtrend line as we speak, showing hesitation as investors await the S&P's next move.

The Cable has climbed back into the bottom of the February trading range, a positive development for the currency pair. We anticipate some consolidation from the GBP/USD today with no economic data releases from Britain. Additionally, we anticipate a near-term struggle with 1.40 and our 2nd tier downtrend line.

The EUR/USD logged some impressive gains on Thursday, and is inching above our 2nd tier downtrend line on Friday.  The EUR/USD exercised its positive correlation with U.S. equities, ignoring the extremely negative industrial production data from Germany.

However, we expect some near-term profit taking coming up as the currency pair struggles with our 2nd tier and the highly psychological 1.30 level.  The EUR/USD still faces February highs with EU retail sales release pending.

Crude posted huge gains on moderate volume Thursday as U. S. equities experienced another large movement upwards. As predicted, Wednesday's selloff in reaction to higher inventory levels was overdone, and the shorts paid for it yesterday.

Investors are gearing up for Sunday when OPEC will meet with another production cut in the works. Crude futures leapt above our two uptrend lines and our 1st tier downtrend line. However, our 2nd tier downtrend line is presently weighing down on the futures.

The S&P futures posted another impressive rally on Thursday, following through on Tuesday's furious bull-run. The large movement upwards came in reaction to Citi and BofA reiterating they are presently sound financially, and will not need to be nationalized to stay afloat.

Additionally, Obama gave what can be considered a `business-friendly' speech, emphasizing the need for reform while keeping the entrepreneurial spirit intact. Finally, retail sales showed an improvement, declining only 0.1% versus estimates of a 0.5% decline. Investors ignored another discouraging unemployment claims release, which we view as a more relevant indicator of the economy's health.