1. State of the Market September 2010
Daryl Montgomery
September 31, Copyright 2010, All Rights Reserved
The contents of this presentation are not intended as a recommendation to buy or sell any security.

2. Background Material for the Talk
Moving Averages – 50-day, 200-day plus 10, 20, 30, and 40-day.
Bollinger Bands – plus or minus 2 standard deviations from a ~20-unit moving average.
RSI – relative strength index, 80-overbought, 20 oversold, 50 divides bearish and bullish
MACD – moving average convergence divergence, zero divide bullish bearish, peak and bottom numbers variable
DMI – Directional Movement Index, +DI (blue), -DI (red) and trend line.

3. Disconnect Between Economy and Markets
Economy is clearly deteriorating yet markets have rallied strongly during Sept.
Fed is pumping money in front of election.
All asset classes are rising.
Money pumping will continue in Oct.
What happens in Nov. or after remains to be seen.
If money pumping continues, it will lead to a crash, possibly next spring.

4. Currency Summary U.S. $ fell below its 200-day, now bearish.
Euro has rallied above its 200-day thanks to Euro-TARP.
Japanese Yen chart is weakening.
Canadian $ sideways trading.
Australian $ rallying with gold, but has not hit a new high.

5. DXY Dollar Index: Three-Years Weekly
10, 40-Week Moving Averages, RSI, DMI, MACD

6. DXY Dollar Index: One-Year Daily
50, 200-Day Moving Averages, RSI, DMI, MACD

7. FXE Euro ETF: Three-Years Weekly
10, 40-Week Moving Averages, RSI, DMI, MACD

8. FXE Euro ETF: One-Year Daily
50, 200-Day Moving Averages, RSI, DMI, MACD

9. FXY Yen ETF: Three-Years Weekly
10, 40-Week Moving Averages, RSI, DMI, MACD

10. FXY Yen ETF: One-Year Daily
50, 200-Day Moving Averages, RSI, DMI, MACD

11. FXA Australian $: Three-Years Weekly
10, 40-Week Moving Averages, RSI, DMI, MACD

12. FXA Australian $: One-Year Daily
50, 200-Day Moving Averages, RSI, DMI, MACD

13. FXC Canadian $: Three-Years Weekly
10, 40-Week Moving Averages, RSI, DMI, MACD

14. FXA Canadian $: One-Year Daily
50, 200-Day Moving Averages, RSI, DMI, MACD

15. Metals Gold has broken out to new all-time highs.
Silver has broken out of its trading range established in 2008.
Mining stocks around new highs.
Nova Gold (NG) is testing its resistance and is forming either a cup or double top.

16. Gold ETF GLD Three-Years Weekly
10-40 Week Moving Averages and RSI, DMI, MACD

17. Gold ETF GLD One-Year Daily
50, 200-Day Moving Averages, RSI, DMI, MACD

18. Silver ETF SLV Three-Year Weekly
10, 40-Week Moving Averages, RSI, DMI, MACD

19. Silver ETF SLV One-Year Daily
50, 200-Day Moving Averages, RSI, MACD, DMI

20. Mining ETF GDX Three-Years Weekly
10, 40-Week Moving Averages and RSI, DMI, MACD

21. Mining ETF GDX One-Year Daily
50, 200-Day Moving Averages, RSI, DMI, MACD

22. NovaGold (NG) Three-Years Weekly
10, 40-Week Moving Averages and RSI, DMI, MACD

23. Nova Gold (NG) One-Year Daily
50, 200-Day Moving Averages, RSI, DMI, MACD

24. Energy and Food
Oil has been range trading for months. It is in a period of seasonal weakness until Feb.
Natural Gas looks like it is trying to test bottom from last year. Keeps falling back.
Uranium could be ready for a rally.
Food commodities have been rallying strongly.

25. Oil ETF DBO Three-Years Weekly
10, 40-Week moving average, RSI, DMI, MACD

26. Oil ETF DBO One-Year Daily
50, 200-day moving average, RSI, DMI, MACD

27. Natural Gas ETF GAZ Three-Year Weekly
10, 40-Week Moving Averages, RSI, DMI, MACD

28. Natural Gas ETF GAZ One-Year Daily
50, 200-Day Moving Averages, RSI, MACD, DMI

29. Uranium Miner DNN Three-Year Weekly
10, 40-Week Moving Averages, RSI, DMI, MACD

30. Uranium Miner DNN One-Year Daily
50, 200- Day Moving Averages, RSI, DMI, MACD

31. Food ETF DBA Three-Years Weekly
10, 40-Week Moving Averages and RSI, DMI, MACD

32. Food ETF DBA One-Year Daily
50, 200-Day Moving Averages and RSI, DMI, MACD

33. Stocks and Bonds VIX may be at a low.
DJT gave sell signal and then a major market rally began.
Dow, S&P 500, Nasdaq and Russell 2000 have all rallied strongly in Sept.
10-Year treasury may be testing low.
2-Year treasury hit another all-time low (indication of huge liquidity in system).

34. Volatility Index VIX: Three-Years Weekly
10, 40-Week Moving Averages and RSI, DMI, MACD

35. Volatility Index VIX: One-Year Daily
50, 200-Day Moving Averages, RSI, DMI, MACD

36. Volatility Index VIX: Ten-Year Monthly
Red line high after Nasdaq Crash in 2002; RSI, DMI, MACD

37. DJIA Three-Years Weekly
10, 40-Week Moving Averages and RSI, DMI, MACD

38. DJIA One-Year Daily
50, 200-Day Moving Averages and RSI, DMI, MACD

39. DJT Three-Years Weekly
10, 40-Week Moving Averages and RSI, DMI, MACD

40. DJT One-Year Daily
50, 200-Day Moving Averages and RSI, DMI, MACD

41. S&P 500 Three-Years Weekly
10, 40-Week Moving Average and RSI, DMI, MACD

42. S&P 500 One-Year Daily
50, 200-Day Moving Average and RSI, DMI, MACD

43. Nasdaq Three-Years Weekly
10, 40-Week Moving Averages, RSI, DMI, MACD

44. Nasdaq One-Year Daily
50, 200-Day Moving Averages, RSI, DMI, MACD

45. Russell 2000 Three-Years Weekly
10, 40-Week Moving Averages and RSI, DMI, MACD

46. Russell 2000 One-Year Daily
50, 200-Day Moving Averages and RSI, DMI, MACD

47. 30-Year Bond Interest Rate Three-Years Weekly
10, 40-Week Moving Averages, RSI, DMI, MACD

48. 30-Year Bond Interest Rate One-Year Daily
50, 200-Day Moving Averages, RSI, DMI, MACD

49. 10-Year Bond Interest Rate Three-Years Weekly
10, 40-Week Moving Averages, RSI, DMI, MACD

50. 10-Year Bond Interest Rate One-Year Daily
50, 200-Day Moving Averages, RSI, DMI, MACD