SUMMARY & CONCLUSION week ended 18/2/2011

TRENDS

- XJO: long/medium-term - up.

- XJO: short-term - Up

- Dow Industrials: medium-term - up

- Dow Industrials: short-term - up (now in Cloud Cuckoo Land)

- Hang Seng: medium-term trend - down. (Chinese market often leads.)

- Ozzie Dollar: Sideways consolidation. Short-term trend - up.

- Gold in Oz Dollars: Short-term trend - up. (Negative for general market.)

XJO currently at 4937.

Major Support and Resistance for XJO: Resistance: 5000; Support 4200 .

Ratio American Bonds:Commodities - Positive for the general market but showing possible signs of weakening.

Seasonalities for February in 3rd Yr of Presidential Cycle favour the upside.

XJO Long-term Chart Pattern: Rising bearish wedge. Break upwards - very bullish; break downwards - very bearish. Wait and see.

Fundamentals (Shiller CAPE) favour a 100% cash allocation of assets.

Next Week: The probabilities for a down side correction have increased.

Any correction is likely to be muted because of Bernanke’s money supply (QE2) and the strength of the Presidential Cycle in the 3rd Year.

Monday in America is a holiday. Expect our market to be flat. Tuesday’s market may determine the direction for the rest of the week.