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Market Commentary for March 13, 2007


The Bears had a strong upper hand today pushing major indices into the red zone where they moved lower and lower, into the closing bell. Trading volume was heavy amidst the strong down draft. The sub-prime lenders appear to be one of the culprits for the negative market sentiment. Into the close, here is how the major indices ended the session: the DOW (Dow Jones Industrial Average) moved strongly lower today by 242.66 points to end the session at 12075.96 with today being its second worse session of the year; the NYSE (New York Stock Exchange) followed the DOW’s lead with a strong move lower by 194.05 points to end at 8926.88; the NASDAQ moved lower by 51.72 points to close at 2350.57; the S&P 500 moved lower by 28.65 points to end at 1377.95 and the RUSSELL 2000 moved lower by 19.88 points to close at 769.12. The FTSE All-World Index ex-US (top Large/Mid Cap aggregate from over 2,700 stocks from the FTSE Global Equity Index Series (GEIS) which covers 90% of the worlds investable market capitalization) moved lower by 3.01 to close at 236.32 and the FTSE RAFI 1000 moved lower by 121.29 to close at 5796.82.

Organization for Economic Cooperation and Development's Chief Economist Jean-Philippe Cotis spoke out today: Doesn't see risk of overheating in China economy; low interest rates only option for Japan; Euro-Zone interest rates at a "reasonable" level; Euro-Zone economic growth may have peaked; interest rates in the currency area "are at a reasonable level; Outlook for price stability in Euro Zone "benign"; accommodation has "largely" been withdrawn by ECB; "no compelling case" for U.S. Fed to hike again; U.S. Core Inflation "a bit too high for comfort"; BOJ shouldn't attempt to tackle carry trades; Japanese Yen exchange rate is "very weak"; deflation lingering, growth unbalanced in Japan; BOJ shouldn't hike until inflation "firmly positive"; global rebalancing underway as U.S. shifts to lower gear; expects U.S. Gross Domestic Product (GDP) rose by 0.5% in first quarter with an increase by 0.6% in second quarter; Expects Japan GDP rose by 0.5% in both first and second quarter; OECD Expects Germany GDP rose by 0.6% in first quarter and an increase by 0.4% in second quarter; OECD Expects French GDP rose by 0.5% in both first and second quarter; OECD Expects Italian GDP rose by 0.4% in first quarter with an increase by 0.5% in second quarter; OECD Expects Euro-Zone GDP rose by 0.6% in both first and second quarter; OECD Expects UK GDP rose by 0.6% in first quarter with an increase by 0.7% in second quarter and OECD Expects Canadian GDP rose by 1.0% in first quarter with an increase by 0.9% in second quarter.

OECD January Lead Indicator for Euro Zone came in at 109.2 from 109.3; OECD January Lead Indicator for U.S. was down at 106.2 versus 106.6; OECD January Lead Indicator for Japan was down at 99.5 versus 100.0 and OECD January Lead Indicator for UK was down at 100.0 versus 100.3.

European Central Bank (ECB) Governing Council Member and President of the Deutsche Bundesbank, Axel Weber commented today: Interest Rates not yet appropriate given risks; consumption likely to improve in 2007, 2008; German GDP likely around 2% in 2007, 2008; upward risks to price stability remain; should further withdraw monetary stimulus; monetary policy was extremely expansive; monetary policy remains stimulative; rate normalization began late, but not too late and monetary policy was extremely expansive.

Economic data released for the day:

ICSC-UBS Store Sales: Weekly measure of comparable store sales at major retail chains which is related to the general merchandise portion of retail sales, as reported by the International Council of Shopping Centers. This date accounts for approximately 10% of total retail sales. For week of March 10th, Store Sales week over week change came in at 0.7% and Store Sales year over year came in at 2.1%.

Retail Sales: A measure of retail sales consisting of total receipts at stores that sell durable and non-durable goods. This data is a key element in economic growth since consumer spending accounts for two-thirds of the national Gross Domestic Products (GDP). Retail Sales month over month change came in at 0.1% versus consensus of 0.3% and Retail Sales excluding autos month over month change fell by 0.1% compared to consensus of 0.3%.

Redbook: General merchandise portion of retail sales covering only approximately 10% of total retail sales, this data is a weekly measure of sales at department stores, chain stores and discounters. U.S. Retail Sales rose by 0.2% for the first week in March compared to February.

Business Inventories: Dollar amount of business inventories held by manufacturers, retailers and wholesalers. Near-term direction of production activity is related to the level of inventories in relation to sales. For January 2007, month over month Inventories change came in at 0.2% compared to consensus of 0.1%.

On the commodities markets, the trend was mixed across the board today for the Energy sector: Light crude moved lower by $0.98 today to close at $57.93 a barrel; Heating Oil moved higher by $0.01 to close at $1.69 a gallon; Natural Gas moved lower by $0.03 today to end at $7.03 per million BTU and Unleaded Gas closed higher by $0.02 today to end the session at $1.93 a gallon.

Metals Market ended the session mostly lower across the board today: Gold moved lower by $0.90 to close at $649.40 an ounce; Silver closed lower today by $0.13 to end the session at $12.96 an ounce; Platinum moved higher today by $9.80 to close at $1,223.60 an ounce and Copper ended the day lower by $0.02 today to close at $2.82 per pound.

On the Livestock and Meat Markets, the trend was mixed across the board again today: Lean Hogs closed higher by 0.53 at 78.00; Pork Bellies ended the day higher by 0.60 to close at 107.80; Live Cattle moved lower by 1.93 to end the day at 100.10 and Feeder Cattle ended the day lower by 0.60 to close at 108.23.

Other Commodities: Corn moved lower again today by 2.50 points to end at 406.75 and Soybeans moved sharply lower today by 9.50 to close at 755.50.

The end of day results for the CBOT (Chicago Board of Trade) which is comprised of the total Exchange Volume for Futures and Options (EVFO) including Electronic, Open Auction and Cash Exchange ended the day at 3,142,523 Open Interest for Futures moved lower by 21,879 to close at 9,106,330 and the Open Interest for Options moved higher by 95,248 to close at 7,417,018 for a total Open Interest of 16,524,988 for a total gain on the day by 73, 369.

Bonds were higher across the board again today: 2 year bond closed higher by 7/32 at 100 14/32; 5 year bond closed higher by 14/32 at 100 31/32; 10 year bond closed higher by 16/32 at 101 2/32 and the 30 year bond closed higher by 21/32 at 101 16/32.

The mini Dow ended the session today with a heavy loss of 223 to close at 12188. The total Dow Exchange Volume for the day came in at 177,620 which are comprised of Electronic, Open Auction and Cash Exchange. Traders should review workshops available at the CBOT (Chicago Board of Trade) Educational in-person seminars schedules available on CBOT (Chicago Board of Trade) website.

New York Stock Exchange movers for the day: Chicago Mercantile Exchange Holdings (CME) fell hard today by 17.05 points to end the session at $550.45; Potash Corporation/Saskatchewan (POT) gave up 6.54 points on the day to close at $155.44; BlackRock Incorporated (BLK) gave up 5,.95 points to close at $153.36 for the day; AvalonBay Communities (AVB) shed 4.39 points to end at $126.95 for the day and Moody’s Corporation (MCO) fell by 4.01 points for a closing price at $59.56.

On the NASDAQ today, advancers came in at 550; decliners totaled 2,539; unchanged came in at 88; new highs came in at 37 and new lows came in at 143. Gainers and losers for the day on the NASDAQ: Accredited Home Lenders Holding Company (LEND) gave up 7.46 points for a closing price of $3.94 at the close; J2 Global Communications Incorporated (JCOM) moved higher by 2.53 points to gain 10.24% on the day to close at $27.23; TransAct Technologies Incorporated (TACT) fell by 2.14 points to give up 22.81% for a closing price of $7.25; Google Incorporated (GOOG) fell sharply by 11.72 points to close at $443.03 and .Research In Motion Limited (RIMM) gave up 3.82 points to close at $133.05 for the day.

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Millennium-Traders