0358233 COPYRIGHT MMX JEFFREY MANDALIS ALL RIGHTS RESERVED

WEEKLY FUNDAMENTAL AND TECHNICAL ANALYSIS AS OF JANUARY 15, 2009
BY JEFFREY MANDALIS COPYRIGHT MMIX ALL RIGHTS RESERVED

WARNING! TRADING FUTURES AND OPTIONS ON FUTURES IS BY DEFINITION VERY RISKY!
ANY PAST PERFORMANCE MAY NEVER BE CONSIDERED INDICATIVE OF FUTURE RESULTS.

TRADING FUTURES AND OPTIONS ON FUTURES IS ACCEPTABLE FOR RISK CAPITAL ONLY
AND SHOULD NOT BE UNDERTAKEN UNLESS SUCH RISK IS SUITABLE FOR YOU FINANCES.
TRADING FUTURES AND OPTIONS ON FUTURES IS NOT FINANCIALLY SUITABLE FOR MOST.

TRADING FUTURES AND OPTIONS ON FUTURES INVOLVES FINANCIAL LEVERAGE THAT CAN
CREATE LOSSES IN EXCESS OF THE BALANCE OF THE FUNDS DEPOSITED ON THE ACCOUNT
IF THE MARKET PRICE CONTINUES TO MOVE ADVERSELY AGAINST THE OPEN POSITIONS.
NEVER TRADE FUTURES OR OPTIONS ON FUTURES WITHOUT UNDERSTANDING THE RISKS.
EXCHANGE MARGIN REQUIREMENTS ARE SUBJECT TO CHANGE WITHOUT ANY PRIOR NOTICE.

RESEARCH AND ANALYSIS BASED SOLELY ON THE OPINIONS OF THE ASSOCIATED PERSONS
INDEPENDENT OF THE INTRODUCING BROKER AND DOES NOT NECESSARILY REFLECT THE
OPINIONS OF THE INTRODUCING BROKER, CLEARING FIRMS, OR AFFILIATED ENTITIES.

RESEARCH AND ANALYSIS PROVIDED FOR GENERAL INFORMATION PURPOSES ONLY AND IS
NEITHER INTENDED AS ADVICE SPECIFIC FOR ANY INDIVIDUAL OR ENTITY IN ANY WAY,
NOR TO BE CONSIDERED AS AN OFFER TO CONTRACT FUTURES OR OPTIONS ON FUTURES.




FUNDAMENTAL ANALYSIS

TRILLION DOLLAR DEFICITS? YES WE CAN!

Just how much is a one trillion dollar deficit? ($1,000,000,000,000.00)

One trillion (1.0 X 10^12) equals one thousand billion, or a million millions.
A budget deficit of one trillion dollars means that the government plans to
spend one trillion dollars more than tax revenues are projected to receive.
Thus, in order to have a trillion dollar deficit the federal government will
need to issue an additional trillion dollars worth of treasury securities,
EVERY YEAR!

This new supply is significant, especially considering the amounts involved.

To provide some perspective:

The national debt is well over ten trillion dollars, $10,605,968,804,933.43,
as of January 14, 2009.

Current debt held by the Federal Reserve or government agencies equals
over four trillion dollars, or $4,317,294,625,012.89 as of January 14, 2009.

Current debt not held by the Federal Reserve or government agencies equals
over six trillion dollars, or $6,288,674,179,920.54 as of January 14, 2009.

http://www.treasurydirect.gov/NP/BPDLogin?application=np

Thus, the plan is to double the privately held debt over the next few years.
How much is the purchasing power of the dollar likely to be devalued by this?
Will America still be able to afford to import foreign goods with cheap dollars?
Will America's creditors really have this type of appetite for treasuries?
What type of debt burden will these interest payments put on the economy?

The theory behind a fiscal stimulus is that governments can jump start an
economic expansion by deficit spending to utilize excess economic capacity.
The theory goes that when economic activity increases, tax receipts increase
allowing the government to repay what was borrowed for the fiscal stimulus.

The Federal Reserve has stated without any equivocation whatsoever that they
are ready, willing and able to purchase treasury securities outright to keep
long term interest rates low enough to support the real estate market prices.

Japan faced a very similar situation decades ago after real estate valuations
could only be maintained by the adoption of the zero interest rate policy in
order to insure that the Japanese economy could avoid a deflationary collapse.

Normally, low interest rates depreciate currency in foreign exchange markets.
The yen could maintain foreign exchange parity despite zero interest rates
because of the large trade surplus created by Japan's aggressive exporting.
Expecting the same results for the United States despite the fact that the
trade situation is exactly opposite, is risking the value of the dollar.

Since all currency in a fiat credit system is borrowed into circulation only,
real estate borrowing is the primary method by which new currency is created.
Slowdowns in borrowing are so dangerous for the United States economy because
it will mean that less currency is being borrowed into circulation causing a
deflationary spiral crushing equity valuations and private sector profits.

Unfortunately, the monetary and fiscal authorities are expecting new results
from repeating the very same mistakes that have not been working for years.
Several rounds of tax cuts and even direct distribution of checks failed to
achieve the desired stimulus results because, as a degenerate trade debtor,
any fiscal stimulus in United States will only stimulate trading partners.

Amazingly, while the Federal Reserve liquidated a serious portion of the
System Open Market Account exchanging public treasuries for private paper at
high valuations controversial enough to be the subject of pending litigation,
while short term interest rates of the world's largest trade debtor are zero,
and while the United States has all but dared the world to short the dollar;
the dollar has still rallied because there is really nothing else better.
De-leveraging of short dollar positions forced the dollar to rally sharply.

Make no mistake, this current situation is neither a recession or depression,
but a systemic collapse of the financial system unseen since World War I.
Economically, nothing is more important than very stable international trade.
Currency devaluations made settlement of trade balances with gold impossible,

and eventually all international commerce collapsed into the first world war.
The current situation is similar but more precarious, will globalism survive?

So long as budget and trade deficits of the United States remain ridiculous,
the value of the United States dollar will remain vulnerable to devaluation.
Trade deficits are sustainable if a balanced budget keeps the currency strong.

Budget deficits are sustainable if a trade surplus keep the currency strong.
Expecting a currency to stay strong with both trade and budget deficits is
not mathematically possible, and despite the rhetoric, this is intentional.

With a national debt over ten trillion, and even more unfunded liabilities,
there is no way the United States can afford to repay the same value borrowed.
The only way to continue to cover the debt burden is with cheaper dollars.
Therefore, trillion dollar deficits are not only good, they are necessary.
Otherwise, the value of the dollars will be too high to even service the debt.

Whilst it seems almost too easy to keep deficit spending depreciating dollars,
nothing is certain because while monetary authorities can force a contraction,
they can only permit the economy to expand. Someone still needs to borrow.
Governments are usually quite adept at borrowing on behalf of their citizens.
Inflationary devaluation is the best case scenario for the dollar currently.
Alternatively, equity crushing deflation would destroy international trade.
Neither environment is particularly good for business, the future is risky.

FUNDAMENTAL ANALYSIS OFFERED ON BEST EFFORTS BASIS ONLY AND IS IN NO WAY TO
BE CONSIDERED AS INDICATIVE OF ALL FACTORS OF SUPPLY AND DEMAND FUNDAMENTALS,
OR THAT THE STATED FUNDAMENTALS IMPACT PRICES MORE THAN ANY OF THE OTHER
FUNDAMENTALS OF SUPPLY AND DEMAND WHICH ARE NOT REPRESENTED HEREINABOVE.




TECHNICALS

COMEX GOLD, FEBRUARY 09 (GCG09) AS OF JANUARY 16, 2009

$ 1,297.71 CONTRACT R2
$ 1,060.99 CONTRACT R1
$ 1,045.00 CONTRACT HIGH
$ 939.39 MONTHLY R2
$ 894.74 MONTHLY R1
$ 889.10 MONTHLY HIGH
$ 873.80 WEEKLY R2
$ 857.50 WEEKLY HIGH
$ 854.38 CONTRACT PIVOT
$ 846.84 MONTHLY PIVOT
$ 845.71 DAILY RESISTANCE 2
$ 843.60 DAILY HIGH
$ 841.50 DAILY LAST
$ 832.27 WEEKLY R1
$ 819.78 DAILY RESISTANCE 1
$ 817.74 DAILY PIVOT
$ 817.30 DAILY OPEN
$ 816.74 WEEKLY PIVOT
$ 815.70 DAILY LOW
$ 807.30 DAILY SETTLE
$ 806.58 MONTHLY S1
$ 801.50 WEEKLY LOW
$ 801.50 MONTHLY LOW
$ 792.66 DAILY SUPPORT 1
$ 790.69 DAILY SUPPORT 2
$ 777.92 WEEKLY S1
$ 763.40 WEEKLY S2
$ 763.40 MONTHLY S2
$ 698.53 CONTRACT S1
$ 688.00 CONTRACT LOW
$ 562.50 CONTRACT S2

COMEX SILVER, MARCH 09 (SIH09) AS OF JANUARY 16, 2009

$ 40.009 CONTRACT R2
$ 30.238 CONTRACT R1
$ 21.225 CONTRACT HIGH
$ 16.041 CONTRACT PIVOT
$ 12.303 MONTHLY R2
$ 12.124 CONTRACT S1
$ 11.770 MONTHLY HIGH
$ 11.350 DAILY RESISTANCE 2
$ 11.350 WEEKLY R2
$ 11.305 DAILY HIGH
$ 11.305 WEEKLY HIGH
$ 11.276 MONTHLY R1
$ 11.275 DAILY LAST
$ 10.787 MONTHLY PIVOT
$ 10.660 DAILY RESISTANCE 1
$ 10.617 DAILY PIVOT
$ 10.575 DAILY LOW
$ 10.575 DAILY OPEN
$ 10.440 DAILY SETTLE
$ 10.403 WEEKLY R1
$ 10.361 WEEKLY PIVOT
$ 10.320 WEEKLY LOW
$ 10.320 MONTHLY LOW
$ 9.971 DAILY SUPPORT 1
$ 9.932 DAILY SUPPORT 2
$ 9.887 MONTHLY S1
$ 9.496 WEEKLY S1
$ 9.458 WEEKLY S2
$ 9.458 MONTHLY S2
$ 8.510 CONTRACT LOW
$ 6.432 CONTRACT S2

TECHNICAL ANALYSIS OFFERED ON A BEST EFFORTS BASIS ONLY AND IS IN NO WAY TO
BE CONSIDERED AS INDICATIVE OF ALL THE RELEVANT TECHNICAL ANALYSIS FACTORS,
OR THAT THE STATED TECHNICAL FACTORS IMPACT PRICES MORE THAN ANY OF THE OTHER
FACTORS OF TECHNICAL ANALYSIS WHICH ARE NOT REPRESENTED HEREINABOVE.




DISCLOSURES

WARNING! TRADING FUTURES AND OPTIONS ON FUTURES IS BY DEFINITION VERY RISKY!
ANY PAST PERFORMANCE MAY NEVER BE CONSIDERED INDICATIVE OF FUTURE RESULTS.

TRADING FUTURES AND OPTIONS ON FUTURES IS ACCEPTABLE FOR RISK CAPITAL ONLY
AND SHOULD NOT BE UNDERTAKEN UNLESS SUCH RISK IS SUITABLE FOR YOU FINANCES.
TRADING FUTURES AND OPTIONS ON FUTURES IS NOT FINANCIALLY SUITABLE FOR MOST.

TRADING FUTURES AND OPTIONS ON FUTURES INVOLVES FINANCIAL LEVERAGE THAT CAN
CREATE LOSSES IN EXCESS OF THE BALANCE OF THE FUNDS DEPOSITED ON THE ACCOUNT
IF THE MARKET PRICE CONTINUES TO MOVE ADVERSELY AGAINST THE OPEN POSITIONS.
NEVER TRADE FUTURES OR OPTIONS ON FUTURES WITHOUT UNDERSTANDING THE RISKS.
EXCHANGE MARGIN REQUIREMENTS ARE SUBJECT TO CHANGE WITHOUT ANY PRIOR NOTICE.

TECHNICAL ANALYSIS OFFERED ON A BEST EFFORTS BASIS ONLY AND IS IN NO WAY TO
BE CONSIDERED AS INDICATIVE OF ALL THE RELEVANT TECHNICAL ANALYSIS FACTORS,
OR THAT THE STATED TECHNICAL FACTORS IMPACT PRICES MORE THAN ANY OF THE OTHER
FACTORS OF TECHNICAL ANALYSIS WHICH ARE NOT REPRESENTED HEREINABOVE.


FUNDAMENTAL ANALYSIS OFFERED ON BEST EFFORTS BASIS ONLY AND IS IN NO WAY TO
BE CONSIDERED AS INDICATIVE OF ALL FACTORS OF SUPPLY AND DEMAND FUNDAMENTALS,
OR THAT THE STATED FUNDAMENTALS IMPACT PRICES MORE THAN ANY OF THE OTHER
FUNDAMENTALS OF SUPPLY AND DEMAND WHICH ARE NOT REPRESENTED HEREINABOVE.

RESEARCH AND ANALYSIS BASED SOLELY ON THE OPINIONS OF THE ASSOCIATED PERSONS
INDEPENDENT OF THE INTRODUCING BROKER AND DOES NOT NECESSARILY REFLECT THE
OPINIONS OF THE INTRODUCING BROKER, CLEARING FIRMS, OR AFFILIATED ENTITIES.

RESEARCH AND ANALYSIS PROVIDED FOR GENERAL INFORMATION PURPOSES ONLY AND IS
NEITHER INTENDED AS ADVICE SPECIFIC FOR ANY INDIVIDUAL OR ENTITY IN ANY WAY,
NOR TO BE CONSIDERED AS AN OFFER TO CONTRACT FUTURES OR OPTIONS ON FUTURES.

PLEASE TAKE DUE NOTICE THEREOF.




CONTACT

Jeffrey Mandalis Copyright MMIX
Senior Futures & Options Broker

Trendphonic Futures Trading LLC
Chicago Board of Trade
141 West Jackson Boulevard, 1210
Chicago, Illinois 60604

(800) 647-1738 Toll free
(312) 546-6284 Direct




REGULATION

TRENDPHONIC FUTURES TRADING LLC is licensed as an Introducing Broker (IB)
and Commodity Trading Advisor (CTA) with the National Futures Association.
(NFA# 0382884) http://www.nfa.futures.com/

TRENDPHONIC FUTURES TRADING LLC is federally regulated by the United States
through the Commodity Futures Trading Commission. http://www.cftc.gov/

Clearing firms are regulated by their respective exchanges.

COPYRIGHT MMIX ALL RIGHTS RESERVED