DUBAI PENNY STOCKS REPORT      January 30,
2010

COMP: 2,147.35               GOLD: $1,080.20          $USD INDEX:
79.47

S & P 500: 1,073.87         SILVER: $ 16.19            VIX:
24.62

Greetings stock fans. Despite better-than-expected earnings reports out of
the likes of both Microsoft and Amazon (MSFT; AMZN), as well as a
better-than-expected GDP (5.7%) report on Friday, US equities markets were
unable to muster any upside mojo in last week’s trade as ‘sell the news’
appeared to be the prevailing theme, where the major averages registered their
third consecutive weekly loss and now find themselves (S&P 500) nearly 4% in
the hole for the year.

As a result of last week’s ‘slippage’, our proprietary ratio has now turned
negative with an unfavorable reading of 2:1 versus last week’s
slightly positive read of 1.4:1, where the technical damage that has been
inflicted across the tape in the past two (2) weeks has left many individual
names and sectors scarred and reflective in the read.

Despite short-term oversold conditions and an expected ‘turn of the tide’ in
the not too distant future, market participants ‘may’ have to endure
further downside before this tape is ready to turn as oversold conditions (like
overbought conditions) can linger longer and travel farther than one may expect
and anticipate. Nevertheless, it’s apparent that any signs of intra-day strength
continue to be met with distribution/selling pressure, which as of this writing,
has kept a lid/ceiling on the tape, thus far.

As is indicative above, the Spoo’s remain under pressure with the index
trading below both its 20 and 50-Day moving averages on increasing/accelerating
volume, while relative strength has continued to deteriorate from last week’s
RSI 36 read to today’s RSI 33, as well as a MACD reading below the 0 line, all
of which portend to unfavorable technical characteristics.

With that in mind, we’ll reinforce our thoughts of last week where we said, “While it’s a bit premature in determining whether last week’s action is
indicative of a ‘rolling top’ formation or, merely profit taking from weekly
resistance levels, we suspect a bounce/reversal forthcoming in the days ahead
and it will be the strength or lack thereof, of such bounce/reversal which may
lend further clarity as to whether we are witnessing the beginnings of something
new (trend) or, consolidative/corrective action. Our best guess is the latter,
however, as always; we’ll defer to the ultimate judge and jury itself, Mr.
Market, in delivering the verdict,”  of which we remain of the view
today.

Moving forward, we have ‘potential’ mild support in the SPX 1070/2 area and
should such level ‘give way’ on a ‘closing’ basis in the next
several days, further downdraft to the 1060, as well as the 1040-45 zone
(200-Day moving average) cannot be ruled out. Additionally, should Da Boyz seem
fit in ‘shaking the tree’ a bit harder, and in the process, instilling
noticeable fear amongst market participants, a date with the October/November
lows (SPX 1020-30) ‘may’ be in the cards?

Nonetheless, it’s obvious we’ve endured technical damage and that the tape
remains in its short-term oversold posture. From which levels noted above will
we perhaps witness a ‘stemming of the bleed’? Only in due time will we know for
certain yet, we’ll be monitoring the action closely at the aforementioned
levels.

GLOBAL MARKETS:

Once again, global markets/bourses fell to the heavy hand of Mr. Market in
this past week of trade where selling pressure was found across all regions as
no one was spared the wrath. As a result, equities markets continued their
decline and when the week had come to a conclusion, found themselves swimming in
a sea of red. While global markets/bourses (as well as US) remain in a
short-term oversold posture, we’ll emphasize what we stated last week when we
noted, “While last week’s late distribution/selling dragged many global
indices from or near recent highs, much like the US, it’s a bit premature in
determining whether last week’s action is indicative of a possible ‘rolling top’
formation, or merely profit taking from weekly resistance levels? Nevertheless, global markets/bourses find themselves rapidly approaching
short-term oversold levels, where we suspect a forthcoming bounce/reversal in
the not too distant future and such response will more than likely shed further
light on whether last week’s action was the start of something new or,
consolidative action,” which remains pertinent today. We furthermore went on
to note, “Thus, members may wish to monitor the strength or lack thereof,
should such reversal of fortune play itself out in the days/weeks ahead,” which may just provide further clarity with respect to our unanswered
questions above. In the meantime, we await further cards from the deck to be
revealed!

BONDS:

There was no significant change in ‘Treasury Land’ this past week as the
10-Yr traded within a tight range and as a result, the ‘Note’ finished with a
slight uptick of 1bp, closing out at our noted short-term support at 3.6%.  Moving forward, potential short-term resistance lies at the 3.7% level, while
both the 4% and 4.2% remain formidable longer-term hurdles. On the flip-side,
potential support resides at the 3.55%-3.6% zone (Gap), as well as at the rising
200-Day moving average at 3.46%. Regardless of the ‘blips and dips’, we remain
entrenched within the multi-month 3.2%-4% range.

METALS:

The metals continue to act ‘heavy’ and remain in consolidation mode on the
heels of strengthening $USD action and this past week of trade was no different,
where the ‘yellow metal’ succumbed to lower depths shedding 1% and closing out
at $1080.20, while Silver lost ground to the tune of 4.6%, finishing just a
whisker above our noted significant short-term support ($16) at 16.19. With that
said, we’ll once again reiterate our thoughts from last week where we penned, “Should the action in the $USD remain ‘constructive’ and find higher prices
in the days/weeks ahead, we may just endure further slippage in both the ‘yellow
metal’, as well as ‘Hi-Ho Silver’. Therefore, as we move forward, Gold continues
to find ‘potential’ resistance in the $1140-50 zone and perhaps more
significantly at the $1175 figure, while the $1050-75 range, as well as the
$1028ish level (rising 200-Day moving average) should lend support in the
days/weeks ahead. As for Silver, both the $18.50-75 zone, as well as the $19.50
figure continue to act as headwinds/resistance, while the $16.70ish and more
significantly, the $16 level, may lend support moving forward. Nonetheless, we
suspect range-bound action in the metals over the next couple of months (further
work to do) before the next ‘leg higher’ ensues and would continue to utilize
periods of softness/pullback as buying opportunities in both physical and
Jr’s!”, which remains relevant today.

CRUDE OIL:

For the third consecutive week, crude slid the ‘slippery slope’ as ‘black
gold’, as well as the commodity landscape in general, has found the terrain
rough on the heels of persistent strength in the $USD, which continues to have a
negative impact where crude shed 1.95% in this past week’s trade to close out at
$72.64bbl. Last week we referenced, “where we now find crude fast approaching
short-term oversold conditions with a relative strength read of RSI 36,
confirming such position. Thus, while further ‘slippage’ may be in the cards
before a turn higher, ‘potential’ support resides at the rising 200-Day moving
average (72.35ish), as well as the 70 level, while the 78-80 and 82-84 zones
provide upside hurdles moving forward”, which remains the case today as oil
now finds itself residing just above its 200-Day moving average ($72.46), as
well as relative strength slipping lower to a further short-term oversold
reading of RSI 32. Moving forward, should crude slide below its 200-Day (72.46)
on a ‘close’, both the 70 and 65 levels may lend support, while
both the 78-80 and 82-84 zones continue to pose as potential
headwinds/resistance.

CURRENCIES:

No real changes from last week’s scribe as the $USD index put in yet another
solid week of trade with the index powering ahead by 1.5% and closing out the
week at 79.47. Although the ‘greenback’ finds itself in a short-term overbought
posture via its present relative strength read of RSI 72 and may be due for some
pause/consolidation, we’ll reiterate our thoughts from last week where we
stated, “With the index now resting above its 20; 50 and 200-Day moving
averages respectively, as well as relative strength remaining strong with
further room for advance, we may just witness additional upside in the
days/weeks ahead after a bit of pause/consolidation, allowing both the 20 and
50-Day to play ‘catch-up’. Nonetheless, while the long-term trend in the $USD
index remains ‘little to be desired’ and we suspect substantially lower levels
in the future (months/years), the short-term posture of the ‘greenback’ has
turned decidedly positive and should be acknowledged and respected.” Moving
forward, the ‘Buck’ finds congestion/resistance in the 80-81 zone, while the
78.25ish (200-Day MA), as well as the 77-77.50 zone should lend short-term
support.

US Markets:

Short-Term:               Bearish- SPX Below 20 &
50-Day MA’s/Oversold

Intermediate-Term:   Neutral- Grinding At Weekly
Resistance  

Long-Term:               Neutral- SPX 1,100 Has Been
‘Re-Captured’

                                                (Yet, within the confines
of a secular-Multi

                                                  Year Bear based on
Weekly charts)                                             

POTENTIAL INDICES SUPPORT/RESISTANCE:

                              SUPPORT                              RESISTANCE

DJIA:             10,020; 9,865; 9,675                10,285; 10,390;
10,520    

COMP:           2,140/5; 2,115; 2,075               2,190/5; 2,220; 2,260

S & P:            1,070/2; 1,060; 1,045               1,085; 1,110/15;
1,130