Q1 Outlooks - January 2012

FX OVERVIEW: The main opportunity in Q1 lies in EUR, where trend leans bearish and there is no support until Q1/yearly zone at 1.2350/1.2280 (or even 1.2500 for January). The two primary sell zones are bearish monthly trend/Q1 zone at 1.3460/85 and Q1 trend/yearly zone at 1.3835/1.3920. EURJPY is also negative, but with a comparatively closer support zone at 97.56/96.97. GBP leans bearish under 1.5710/1.5910, but will need to break 1.5215 to accelerate lower. Setups elsewhere are initially contained: 75.17 to 78.70/79.12 in USDJPY; 1.0013/.9991 to 1.0462/1.0521 in USDCAD; .9854 to 1.0426/1.0507 in AUD.(continued in subscribers area)

STOCK/BOND OVERVIEW: Stocks point higher for Q1: monthly trend is bullish; yearly trend leans bullish; and the long-term setups all exhibit significant upside risk to resistance. The two main support zones for Q1 are 1228.84/1225.92 and 1188.24/1179.99. Most critically, there is no long-term resistance until 1380.08 for Jan and 1406.13 for Q1. Treasuries start out with a positive spin as well. But tenuous monthly uptrends, combined with deep quarterly support behind there, should make for eventual two-way trade in Q1. Upside targets are 2.64/55 in bonds; 1.77/62 in 10s; .60/.51 in 5s and .14 in 2s. On the downside, the first crack is a break of monthly uptrend.(continued in subscribers area)