Commodity TRADING SCHOOL

COMMODITY TRADING SCHOOL US FIXED INCOME REPORT 07/14/09

SUMMARY OF DATA 07/15/09

8:30 AM US CPI DATA (0.7%), EMPIRE STATE MFG SURVEY (-4.5)

9:15 AM US INDUSTRIAL PRODUCTION (-0.7%, CAP UTIL RATE 67.8%)

10:30 AM EIA INVENTORY REPORT

2:00 PM FOMC MINUTES

DATA RESULTS 07/14/09

PRODUCER PRICE INDEX (1.8% vs.0.8%, EX #0.5 vs. 0.1%)-RETAIL SALES (0.6% vs.0.5%, EX AUTO 0.3% 0.6%)-US BUSINESS INVENTORIES (-1.0% vs.-0.8%)

US TREASURIES FALL AFTER RETAIL SALES AND PPI REPORTS SET UP “DOUBLE WHAMMY” OF RECESSION EASE AND RESURGENCE OF INFLATION PRESSURES.

US TREASURIES fell for a second session to key technical support levels after a series of earnings and data releases set up sentiment that pointed to possible alleviation of recession pressures and reemergence of inflation concerns. Retail Sales came in slightly higher than expected, while PPI for June came in over a percent higher than expected. The gains were concentrated within the energy sector, due to a nearly 20% rise in crude price during the month of June. The reading is being digested by the markets as a potentially near term spike, as energy prices have retreated due to overall slowing of global energy demand year over year.

Financial and energy markets offered appeal to the equity markets over fixed income after Goldman Sachs reported far better than expected earnings based upon record trading and stock underwriting revenue. Energy shares rebounded as natural gas prices rallied over 5% on bargain hunting and expectations of strong value and opportunity for gains within the sector if and when the economy stages a turn around. Time frame for the turnaround is likely to be next year.

The pullback in Treasuries should be finding a test at these levels, as support for equities from the financial sector may take a breather as the markets await results from other banks to determine of Goldman is the “diamond in the rough” with regards to taking the lion share of revenue from a sector that has little opportunity for new sources of earnings aside from cost cutting and hoarding government cash.

TECHNICAL OUTLOOK-US 30 YEARS- US 30 years tested the key support level at 118-080 that may hold long enough for a retracement back toward 118-270. Indications are that support will be tested and broken, setting up for a move to 117-180. Looking for near term down target at 116-06, should see significant support at that level.

US 10 YEARS- US 10 year notes should maintain downward momentum to set up initial target of 117-100. Piercing of this level should allow for the market to set up for a run at 116-270, with 116-090 as key downward target. Upward momentum should stall at 117-210.

EURODOLLARS- The waiting continues and the scale trade continues to form in December and March Eurodollars. Continued closings at the low end of the range should set up for an initial downward test of 99.140.

US DEBT FUTURES

OPEN

HIGH

LOW

CLOSE

CHANGE

US U9 (US 30 YRS)

119-300

120-075

118-080

118-210

-1.125/32nds

TY U9 (US 10 YRS)

118-085

118-150

117-170

117-250

-17.5/32nds

ED Z9 (EURO $)

99.245

99.280

99.185

99.200

-0.5

Prepared by Rich Roscelli & Paul Brittain.

EMAIL QUESTIONS OR COMMENTS TO RICH@BINVSTGRP.COM

Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Whitehall Investment Management, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.