gs - charts that matter next week-oct13.pdf

7/27/2019 GS - Charts that matter next week-oct13.pdf

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GS Techs

The Charts That Matter Next Week

Thursday 17th October 2013

Prepared by a Goldman Sachs sales and trading desk, which may have a position inthe products mentioned that is inconsistent with the views expressed in this material. Inevaluating this material, you should know that it could have been previously provided toother clients and/or internal Goldman Sachs personnel, who could have already actedon it. The views or ideas expressed here are those of the desk and/or author only andare not an official view of Goldman Sachs; others at Goldman Sachs may haveopinions or may express views that are contrary to those herein. This material is notindependent advice and is not a product of Global Investment Research. This materialis a solicitation of derivatives business generally, only for the purposes of, and to theextent it is subject to, CFTC Regulations 1.71 and 23.605.

SECURITIES DIVISION


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1Goldman Sachs does not provide accounting, tax or legal advice; such matters should be discussed with your advisors and or couns el. This material is intended for illustrat ivepurposes only and is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and is no indication (implied or express)as to the manner in which any clients account should or would be handled, as appropriate investment strategies depend upon t he clients investment objectives.

Past performance is not an indicator of future

results. Future returns are not guaranteed,and a loss of original investment may occur.

FX and Rates Strategies

From the Trading Desk

1

Spotting themes in the market place

This percentage change scatter chart helps us to

identify where trends in the FX market are

extending or turning on a week on week basis

Performance vs Anchor Currency In this case the

performance of all currencies is displayed vs the USD with

the exception of PLN, CZK, HUF, SEK and NOK which are

tracked vs the EUR

First Across and then Up or Down The %age change last

week is displayed on the x-axis and the %age change so

far this week is displayed on the y-axis

Displayed as if the Base Currency If a currency shows a

positive %age change it means it strengthened vs its

anchor currency (USD/XZY or EUR/XZY fell) if a currency

shows a negative %age change it means it weakened vs itsanchor currency (USD/XZY or EUR/EYZ rallied)

Four Quadrants Top right is Strong and Stronger

where a currency has strengthened for both of the past

two weeks, bottom right is Strong then Weak where a

currency strengthened last week but weakened this week,

bottom left is Weak and Weaker where a currency

weakened for both of the past two weeks and top left is

Weak then Strong where a currency weakened last

week but strengthened this week

Trending or Turning Simplistically speaking if a currency

appears in the top right quadrant it indicates its trending

higher and if a currency appears in the bottom left it

indicates its trending lower. If it appears in the bottom

right it is turning lower and if it appears in the top left it is

turning higher

A chart of this type will now be included most weeks.

Were very open to suggestions of possible future

topicsfor the TOTto TRACK.Chart as of: Thursday 17th October 2013


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2

A quick overview of the technical outlook

Data Source: Bloomberg Date: Thursday 17th October 2013


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5




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Markets which could be the next big story

6

Time to watch for signals that the U.S. 2-yr/10-yr curve is set to flatten For EURUSD the Germany/U.S. 2-year spread is likely critical

The initial flattening trend from Jan. 11 to May 12 appears to have broken into 5-waves

(which is how underlying trends often begin in Elliott terms). That flattening trend alsobegan when the curve stood close to the highs of its multi-decade range.

So far the 76.4% retrace of the initial flattening trend is holding well. Weekly oscillators

are beginning to cross lower (again) to complete triple negative weekly divergence.

Overall a significant flattening of the curve appears likely over time (potentially bullishly

initially given the signals of a top in place on U.S. 10-year yields with 2-year yields like

more range bound in relative terms). The setup on the 2-/30-year curve is similar.

This really seems an incredibly important chart to have on the radar. When the 2-year

spread does eventually make a clean break from its multi-year consolidation (pivots at0bps and -33bps) it will likely be a very important development (for the spread itself and

EURUSD spot given the tight correlation between the two highlighted later in the chart

pack).


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U.S. 10-year yields preparing to move lower?...

7

On the daily chart have begun to retrace from the 2.741-2.744% pivot Attempting to push back below old primary downtrend from 07 at 2.624%

Compared to the sharp drop from the Aug. highs and the relatively quick move down over

the past couple of sessions, the bounce in yields from the 3rd

Oct. low to the recent highlooks quite corrective in nature.

Given the clean/clear break of the uptrend from 3 rd May which is already in place,

coupled with a move below the 55-dma after a stretched number of consecutive daily

closes above, risks look increasingly skewed towards a notable decline in 10-year yields.

There are various points to watch below the market, but at face value the gap to the 200-

dma at 2.24% is large.

If a clean weekly close back below this level is achieved it should be another signal that a

notable peak in yields has already been set (particularly given the setup will look verysimilar to that which developed at the Feb. 11 highs when a similar false break above the

then primary downtrend was achieved).

The next level to watch is the 200-wma at 2.519% and also 2.606% as a close below that

point on Friday will cause a weekly reversal towards lower yields to be posted.

The big pivot should be 2.42-2.33% where three notable interim highs/lows were set from

Oct. 10 to Mar. 12.


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Similar setup on the U.S. 30-year yield daily chart

8

The recent turn lower developed after an

extreme trend above the 55-dma, similar to that

seen as yields moved into the Feb. 11 peak (prior

to a notable downtrend developing)

At the start of this week yields ticked back above the 55-

dma, but that move looks false, as it was in early-Mar. and

early-Apr. 11 when a similar underlying setup to now was

in place (highlighted in red on the chart).

On Wednesday a key day towards lower yields was

posted.

Overall further decline in yields seems likely with the next

clear pivot being centred on 3.49-3.46% (converged series

of notable lows/highs set from Aug. 10 to Mar. 12).

The 200-dma is all the way down at 3.368%.


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On the LT 30-year chart must keep in mind monthly patterns

9

As a reminder in Aug./Sep. against the 61.8%

retrace of the drop from the Apr. 10 high to the

Jul. 12 low (and from just beneath the primary

channel/trend resistance off the Sep. 90 peak)yields posted a pair of clear exhaustion candles

Monthly oscillators are now attempting to cross down

from the highs of their recent range too.

Overall it looks as though a significant period of

consolidation/retrace of the rise in yields from Jul. 12

onwards (at least) is likely. Its far too early to actively

argue for this, but it needs to be kept in mind that a

notable cyclical peak could have been set.


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This should again link back into a flattening of the curve?..

10

A reminder of the multi-year oscillator nature of the 2-/10-year curve Weekly chart implies good potential for trend flattening

The proximity of the highs of the multi-year range seems to make this an ideal level

against which to watch for any signs of the curve preparing to enter a flattening trend(which the weekly setup highlighted again opposite seems to imply is likely).

As highlighted in the Theme Radarearlier in the chart pack, the weekly setup continues to

look really interesting. The initial Jan. 11/May 12 drop appears to break into a clear 5-wave sequence, the recovery from the May 12 low then appears potentially a corrective

ABC into the 76.4% retrace of the initial flattening. In short this looks a classic setup from

which to see the curve again flatten materially (particularly given the ve weekly

oscillator divergence which developed against the recent series of marginal new trend

highs).


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This again points back to the DXY 95/96 comparison

11

Some further DXY weakness looks possible after uptrend break The market continues to follow a similar pattern to 95/96

The interim lows from Jan./Sep. are now converged ~1.15-1.55% below current levels.

The markets inability to sustain back above the low from Jun. at 80.50 and the risk of abearish weekly reversal ifFridays 5pm NY close is set below 79.837 should indicate that a

move to this region is increasingly likely (particularly taking into account the cross asset

signals, especially yields, discussed on the prior slides).

The fact weekly oscillators are moving very close to the base of their recent range does

however argue against looking for a protracted/extend period of weakness.

From the Apr. 95 low into the May 96 high the market formed what at the time would

probably have appeared to be a bearish wedge. The market broke sharply lower fromthat formation in mid-Jul. 96, but it didnt fulfill what arguably could have been the

target; a move to new cycle lows, instead after one sharp weekly drop and two further

weeks of gradual decline it entered a broad based sideways consolidation for ~5-months.

Eventually it then accelerated higher again in late-Nov/Dec. 96.

?


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Some further EURUSD upside fits with monthly patterns

12

In Sep. EURUSD posted a bullish monthly reversal

pattern as a continuation signal, looking back

over the past decade these have tended to be

important (arguing for at least some furtherupside in the following months on the majority

of occasions)

The next ST level to watch should be the recent trend

high from Feb. at 1.3711 and then the primary downtrend

from the Jul. 08 peak at 1.4002 (its worth keeping in

mind assuming equal %age moves that the base of the

recent range on the DXY implies something in the region

of ~1.3815-1.3865 on EURUSD).


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This seems to generate quite a +ve backdrop for the S&P

13

The market has only recently broken to new all time highs A bullish weekly reversal was posted last week

The trend across the prior major highs from Mar. 00/Oct. 07 and the peak from Oct. 07

itself, which are converged 1,594-1,576, should now be the big pivot support to watch.

Thus far with the breaks which are in place it seems best to give the market the benefit of

the doubt, i.e. not actively look for a major peak/downside turn until clear longer-term

negative signals develop (which they dont seem to have done yet). The only thing clearly

giving a cautionary message is the fact that monthly oscillators are back near the highs of

their recent range, but this has not proved a particularly useful signal in the past until

negative divergence has developed.

There have been nine such patterns posted since mid- 11 and six worked well (indicated

by the + and - symbols on the chart). Therefore while not having a perfect track record

this seems to emphasise that the recent sell off was met with good demand.

On the daily chart (not shown) 1,709-1,710 was a notable ST resistance point (converged

interim high from 2nd Aug. and 76.4% retrace of the 19th Sep./9th Oct. drop) which the

market closed above on Wednesday. This should further support the potential for the

index to move to new highs over time. Its also probably now a decent support point to

watch if the market does retrace again.


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The VIX just maintains its chain of lower-highs

14

Last weeks peak being set at 21.34, i.e.

fractionally below the prior interim top from Jun.

this year at 21.91

The sharp reversal from last weeks extreme also caused

the market to post a bearish engulfing week (the

Japanese candle equivalent of a bearish weekly reversal).

It now basically looks as though the VIX is likely set to

move into an ~22/12 range (the chain of lower-lows

which developed from Mar. 12 onwards has already been

broken as the market has set two higher lows since the

trend base from Mar. this year). Reading into this it would

seem to imply that market concern has likely peaked for

now, but is no longer in the broad declining

channel/wedge in which it oscillated from Jun. 12

onwards.


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Is all this a recipe for Gold to rally?..

15

The daily chart is beginning to look more constructive A bullish weekly reversal will be posted if Fridays close is above ~1,430

Tuesdays intraday low was set just above the 76.4% retrace of the 28 th Jun./28th Aug.

rally at 1,240 (the late recovery that day caused a hammer blowout candle pattern to

ultimately be posted against the trend base).

The important daily close pivot to watch now should be 1,301-1,311 where the

downtrend from Aug.s high and 21-dma are converged, particularly given the

overlapping nature of the drop from Aug. s peak. The big question is whether a broader

recovery towards 1,433-39 can develop (Aug. high and 200-dma).

Daily oscillators are attempting to diverge +vely against the recent marginal new lows.

Given the longer-term structure of the market; aggressive break lower from a multi-

month range earlier this year, overlapping ABC like recovery from the Jun. low and big

resistance band starting at ~1,433, there doesnt seem enough evidence to argue for a

more sustained recovery/uptrend at this point.


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Platinum looks pretty interesting too

16

Potentially forming a clear reverse H&S to project ~1,815 The reverse H&S also seems very clear on the daily chart

This follows the market making a false break below the Dec. 11 low at 1,338 and posting

a near perfect 76.4% retrace of the initial Jun./Aug. rally before bouncing again. A bullish

weekly reversal will be posted ifFridays close is above 1,406.24.

The pivot of the reverse H&S pattern should be 1,522-1,533 where the 55-wma and

interim high from Aug. are converged (i.e. a close above here should start to confirm the

pattern in place and the resultant projection target of ~1,815). Next resistance to watch

should be the downtrend from Mar. 08 at 1,689.

Positive divergence formed against the most recent marginal new trend lows and the

downtrend from the 4th Sep. high has also been broken.

Besides the weekly chart pivots highlighted opposite it will now be important to watch

price action closely if and when the 200-dma up at 1,502 is tested.


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Is this finally cross asset support forve signals on USDZAR?..

17

USDZARs monthly chart hints at the potential for a major top to be set On the weekly chart a drop to 9.40-9.32 looks quite possible

The Aug. peak at 10.51 was within the multi-year resistance band formed by the

converged downtrend from the Dec. 01 high and 76.4% retrace of the Oct. 08/May 11

drop which were converged 10.47-62. Monthly oscillators are also attempting to cross

down from quite close to their multi-year range highs.

These monthly chart signals have been in place for a number of weeks but its always

been unclear what the cross asset rationale was for ZAR to recover (rising U.S. rates were

generally considered ave as was weakness in the Gold market, but both now seem to be

reversing). It seems theres potentially a far more ZAR-supportive backdrop in place.

Weekly price action from late-May onwards potentially looks quite heavy too as the

market has never really made a true/sustained weekly rally since that time, most weeks it

has tried to push beyond ~10.30 it has tended to subsequently corrected lower to leave a

ve weekly candle against the trend peak.

A test of big pivot support below running 9.40-9.32 looks quite possible (converged

uptrend from Jul. 11, Mar. 13 interim high and 55-wma).

Weekly oscillators developed clearve divergence against the recent marginal new trend

highs to help confirm the upmove had become exhausted.


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While on the topic of ZAR, a really interesting cross is ZARJPY

18

The market has potentially set a double bottom

against the 76.4% retrace of the Oct. 12/Apr. 13

rally with a neckline at 10.4089, a weekly close

above which could project 11.2434

The marginal new trend lows from late-Aug. vs those of

early-Jun. have enabled the pair to develop +ve

divergence against the base of the recent decline

highlighting the downtrend off the Apr. peak has likely

lost momentum.

Weekly moving averages are tightly clustered

theoretically indicating the market is trendready.


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The 200-dma should be the critical pivot on USDJPY at 97.10

19

As discussed many times over recent weeks the

market has been above it on a close basis for a

stretched period (now up to 241 consecutive

daily closes above as of Wednesday)

On most occasions since the mid-90s when this sort of

stretch has developed a notable downside correction has

subsequently taken place. However, in this case , given

price action off the May peak still looks potentially like a

bullish continuation pattern (possibly in its final stages of

formation) and the underlying setup looks quite like 95-

97 when the trend extended to ~450 consecutive daily

closes above the 200-dma, for now it seems best to give

the market the benefit of the doubt and hold with bullish

exposure/a +ve bias until/if a daily close (5pm NY) is

achieved below the 200-dma.

The big upside pivot to watch should be 99.61-67 where

the downtrend from Mays peak, interim high from 20th

Sep. and 76.4% retrace of the 11th Sep./8th Oct. drop are

converged.


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Again a reminder of why the 200-dma looks so important

20

The market has set 241 consecutive daily closes above the 200-dma which is very stretched by recent standards, but was materially exceeded in 95/96/97

+456 +228 +207 +247

-248 -217-203

Tracks the number of consecutive daily closes the market has made above/below its 200-dma

The only time a

substantially more

extended trend above

(or below) the 200-

dma has developed

over the past two

decades was in

95/96/97

At 241 consecutive daily closes

above the 200-dma (as of

Wednesdays 5pm NY close)

USDJPYs uptrend is moving into

quite extreme territory.

Substantially more than 200

consecutive daily closes above (or

below) this moving average is

usually unsustainable (looking back

over the past two decades)

+241

In 96 the closest

USDJPY moved to the

200-dma was 81 pips

above on 5th Aug. at

which point it had set

257 consecutive

closes above

200-dma

now at

97.10


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How big are initial retracements on a break of the 200-dma?...

21

This chart looks at four examples where a

similarly stretched trend to this above the 200-

dma has developed and what subsequently

happens when the moving average breaks

The actual stats are shown on the charts, but in simple

terms, the average initial drop when the market breaks

below the 200-dma after an extended trend above (based

on these four examples) is 5.32 big figures (for specifics

on each case please see the chart).


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Correlated market implications

22

USDJPYs been a Nikkei (risk appetite) trade rather than a rate trade The Nikkei itself also remains in a broad consolidation

This chart shows USDJPY spot in blue, the Nikkei in red and an equally weighted basket of

the U.S./Japan 2-/5-/10-year yield spreads in green.

It highlights that for at least 6-months the true link has been with the Nikkei (i.e. risk

appetite) and not U.S./Japan spreads. With this in mind while the recent sharp drop in

U.S. yields which has shifted spreads in the JPYs favour may well have been associated

with USDJPY moving lower so far during Thursdays session, the real determinant of the

next USDJPY trend should more likely be the performance of the Nikkei and broader asset

markets globally.

As with USDJPY given the underlying structure of the market (which looks quite positive)

bias is to look for an eventual push higher.

The key pivot above should be the 76.4% retrace of the 23rd May/13th Jun. drop at 15,110

as the market has respected this particular retracement quite well on numerous

occasions over recent months. With this in mind its worth noting that the market has just

ticked above the most recent 76.4% retrace at 14,565 (as happened at the 27 th Sep. high

too), the retraces are however holding as support against the lows, could this indicate the

market is preparing to break higher?


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Some other Cross/JPY markets are at big pivots

23

94.45-94.90 looks to be a huge pivot on AUDJPY Thinking about the AUDUSD leg, the reverse H&S target at 0.9601 is hit

Converged in this region are the interim high from 19 th Sep., 200-dma and neckline of a

possible reverse H&S. The confusing thing about this particular cross is that the initial

decline from the 11th Apr. high to the 7th Aug. low appears to break into 5-waves which isoften how broader downtrends begin. Given this its difficult to know how much

emphasis to put on the H&S pattern.

Overall the way price action develops around here will likely be critical; signs of a

top/turn lower could fit with the potentialve implications of the prior 5-wave sequence,

where as a meaningful close above could argue the reverse H&S interpretation is correct .

If a material daily close above the H&S target is achieved (which would also by default

give a clean break above the spike low from Jun. 12 at 0.9581) it could open some further

upside with the 200-dma up at 0.9767 as the next potential target.


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BRLJPY is testing a similarly important pivot

24

Three notable points are converged 45.38-45.79 USDBRL itself nears its big pivot support centred on ~2.10

In this region are the interim high from 19th Sep., neckline of a possible reverse H&S and

the 200-dma. Very similar to AUDJPY as discussed on the prior slide, a clean close above

this region is likely needed prior to establishing bullish exposure (it would potentiallycomplete the reverse H&S to project a target of 51.00, very close to the trend high from

May at 51.02). Any signs of a peak here will also likely have to be taken seriously as triple

negative daily oscillator divergence could potentially develop following the recent series

of marginal new trend highs.

Basically a significant move seems likely in the not too distant future. How USDJPY

performs around its 200-dma may have a lot to do with the eventual direction of a break.

This should be the first level against which to watch for signs of the markets decline

losing momentum (the interim peak from early-Dec. 12, 55-wma and uptrend from Jul.

11 are converged around this point).

Signs of a base here would likely be important, but it is probably too early to look for

subsequent underlying uptrend resumption given the almost two-year rally prior to this

correction beginning, i.e. the retrace seen so far would seem extremely shallow in terms

of time relative to the prior move which it is theoretically correcting.


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A couple of other EM highlights

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USDTHB breaks its uptrend from the Apr. lows USDRUB turns heavy after re-testing its broken uptrend from Feb.

This puts focus on the neckline of a potential H&S topping structure and related break

confirmation point which run 30.87-85. A close below that region could at least open the

200-dma down at 30.42 and potentially further if a move toward the full H&S top targetwas to take place.

The double top like pattern which has completed against the trend high from Jul./Sep.

theoretically projects ~30.99 (nearly 3% below current levels).

First support to watch 31.51-31.49 where the interim lows from Sep./Jun. are converged.


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An update on the Eurozone markets...

26

IBEX/DAX ratio is now testing the converged 100-wma/Jan. 13 high The structure of the IBEX continues to look particularly positive

The pivot runs 1.103-1.123. A weekly close above this region should theoretically

complete a double bottom pattern to project 1.2983, i.e. ~12% above the pivot (neckline).

The reverse H&S which has been completed here theoretically gives a projection target of

~11,841 (a little below the post financial crisis high from Jan. 10 at 12,240).

Looking at the daily chart (not shown), after the recent very impulsive uptrend there are

some ST signs of exhaustion; a mild shooting star like candle pattern was posted against

the highs on Thursday and the market is very over-bought in oscillator terms. This likely

increases the risks of a retrace towards the 21-dma which stands down at 9,415, but likely

a dip to that level should be an opportunity to establish bullish exposure at more

attractive levels.


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Same story for the MIB

27

The market has continued higher since completing a reverse H&S The MIB/S&P ratio has pushed above its 100-wma/-ve trend from Apr. 07

Again on the daily chart (not shown) the market is now at over-bought levels in oscillator

terms so some consolidation/retrace may be necessary. The 21-dma stands down at

18,329 as the first clear support/pivot point to watch. However, given this underlyingstructure dips really seem likely to be opportunities to establish bullish exposure at more

attractive levels.

The big pivot to watch should be the Jan. high at 11.89 (~7% above current levels).

The 200-wma then stands an even greater ~24.5% above here.


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Is this +ve periph. setup ultimately set to pull EURCHF higher?..

28

Following Sep.s clear out below, the 200-dma again becomes support? The 55-wma at 1.2256 begins to act as support?

The moving average currently comes in at 1.2320 and Thursdays intraday low (1.2312)

was set only just below it. Subsequently the market has recovered.

Could a double bottom like pattern be forming against the 24th Jun. low at 1.2217?

Pivot resistance to watch on the upside should be the downtrend from 9th Jul. at 1.2386.

This historically important moving average for FX has started to act as support

(particularly on a weekly close basis). Could this be a signal that the market is beginning

to build a base (supported by the strong performance of the peripheral asset markets).

The post-floor high from May and 200-wma are converged up at 1.2650-62 as a potential

upside target/pivot to watch (its worth keeping in mind that the IBEX and MIB have only

recently closed back above their 200-wmas for the first time since the financial crisis

began in earnest back in 08 could EURCHF therefore be the next market to do the

same?).


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Other peripheral markets are now also looking exciting

29

The Greek composite index for instance is testing

a major pivot running 1,160-1,169

The post crisis high from May and the 200-wma (whichthe index has been below on a weekly close basis since

Jun. 08) being converged in this region. A clear weekly

close above it (as seems likely eventually; the market

appears to have been forming a bullish consolidation over

recent months) should act as confirmation of a significant

turn in LT trend in place (i.e. possibly the end of the bear

trend which started at the Nov. 07 highs).

The next clear pivot to watch/target to look for should be

1,458-1,462 where the lows from Mar. 03 and Mar. 09

are converged. Theoretically though a much larger

recovery could develop; the entire decline from the Sep.

99 high to the Jun. 12 low could be a big ABC like

correction (the low, in the grand scheme of things, was

set what seems only marginally above the related

equality target).


31/38






The ASE also looks potentially quite +ve vs the Dax too

30

The ASE/DAX ratio bases just above an equality projection from Sep. 99 The weekly chart potentially looks very constructive

Even the primary downtrend from 99 stands over 150% above current levels. This is particularly the case in Elliott terms; the initial rally from the May 12 low to the

Feb. 13 high appears to break into a clear 5-wave sequence and the pull back from there

looks like a corrective/overlapping retrace of that initial uptrend.

The 200-wma as a potential initial target stands ~38% above current levels.


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our clients, and all investors are advised to consult with their tax, accounting, or legal advisers regarding any potential investment. The material is based on information that we consider reliable, but wedo not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. Opinions expressed are our current opinions as of the date appearing on this material only andonly represent the views of the author and not those of Goldman Sachs, unless otherwise expressly noted.

Conflict of Interest Disclosure: We are a full-service, integrated investment banking, investment management, and brokerage firm. The professionals who prepared this material are paid in part based onthe profitability of The Goldman Sachs Group, Inc., which includes earnings from the firm's trading, capital markets, investment banking and other business. They, along with other salespeople, traders,and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein or the opinionsexpressed in research reports issued by our Research Departments, and our market making, investing and lending businesses may make investment decisions that are inconsistent with the viewsexpressed herein. In addition, the professionals who prepared this material may also produce material for, and from time to t ime, may advise or otherwise be part of our trading desks that trade asprincipal in the securities mentioned in this material. This material is therefore not independent from our interests, which may conflict with your interests. We and our affiliates, officers, directors, andemployees, including persons involved in the preparation or issuance of this material, may from time to time have "long" or " short" positions in, act as principal in, and buy or sell the securities orderivatives (including options) thereof in, and act as market maker or specialist in, and serve as a director of, companies mentioned in this material. In addition, we may have served as manager or comanager of a public offering of securities by any such company within the past three years.

Not a Fiduciary: To the extent this material is provided to an employee benefit plan or account subject to the Employee Retirement Income Security Act of 1974 or Section 4975 of the Internal RevenueCode, this material is provided solely on the basis that it will not constitute investment advice and will not form a primary basis for any persons or plans investment decisions, and nothing in this materialwill result in Goldman Sachs becoming a fiduciary or advisor with respect to any person or plan. To the extent this material is provided to any other recipient, this material is provided solely on the basisthat the recipient has the capability to independently evaluate investment risk and is exercising independent judgment in evaluating investment decisions in that its investment decisions will be based onits own independent assessment of the opportunities and risks presented by a potential investment, market factors and other investment considerations.

Product Specific Risk Disclosure

The ideas detailed in this presentation may involve the purchase of options, in this case the premium paid may be lost if favourable market movement for the structure concerned does not take place.

Disclaimer for clients


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Not a Municipal Advisor: Except in circumstances where Goldman Sachs expressly agrees otherwise, Goldman Sachs is not acting as a municipal advisor and the opinions or views contained herein arenot intended to be, and do not constitute, advice, including within the meaning of Section 15B of the Securities Exchange Act of 1934.

Legal Entities Disseminating this Material: This material is disseminated in Australia by Goldman Sachs Australia Pty Ltd (ABN 21 006 797 897); in Canada by Goldman, Sachs & Co. (or when expresslynoted as such, by Goldman Sachs Execution & Clearing, L.P.) and by Goldman Sachs Administration Services (Canada) Co.; in Hong Kong by Goldman Sachs (Asia) L.L.C.; in Japan by GoldmanSachs Japan Co., Ltd.; in the Republic of Korea by Goldman Sachs (Asia) L.L.C., Seoul Branch; in New Zealand by Goldman Sachs New Zealand Limited; in Singapore by Goldman Sachs (Singapore)Pte. (Company Number: 198602165W); in India by Goldman Sachs (India) Securities Private Limited, Mumbai Branch; in Ireland by Goldman Sachs Bank (Europe) Public Limited Company; in Europeby Goldman Sachs International (unless stated otherwise); in France by Goldman Sachs Paris Inc. et Cie and/or Goldman Sachs International; in Germany by Goldman Sachs International and/orGoldman Sachs AG; in the Cayman Islands by Goldman Sachs (Cayman) Trust, Limited; in Brazil by Goldman Sachs do Brasil Banco Mltiplo S.A.; and in the United States of America by Goldman,Sachs & Co. (or when expressly noted as such, by Goldman Sachs Execution & Clearing, L.P.) (both of which are members of FINRA, NYSE and SIPC) and by Goldman Sachs Bank USA. You mayobtain information about SIPC, including the SIPC brochure, by contacting SIPC (website: http://www.sipc.org/; phone: 202-371-8300). Goldman Sachs International, which is authorized by thePrudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, has approved this material in connection with its distribution in the UnitedKingdom and European Union. Unless governing law permits otherwise, you must contact a Goldman Sachs entity in your home jurisdiction if you want to use our services in effecting a transaction inthe securities mentioned in this material. This material is not for distribution to retail clients, as that term is defined under The European Union Markets in Financial Instruments Directive (2004/39/EC)and any investments, including derivatives, mentioned in this material will not be made available by us to any such retail client.

Reproduction and Re-Distribution: No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without our prior written consent. Notwithstandinganything herein to the contrary, and except as required to enable compliance with applicable securities law, you (and each of your employees, representatives and other agents) may disclose to any and

all persons the U.S. federal income and state tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are provided to yourelating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind.

Information Not for Further Dissemination: To the extent this communication contains Goldman Sachs pricing information, such pricing information is proprietary and/or confidential and is providedsolely for the internal use of the intended recipient(s). You are notified that any unauthorized use, dissemination, distribution or copying of this communication or its contents, including pricinginformation, in whole or in part, is strictly prohibited. Further, unless prohibited by local law, any use, review or acceptance of this information is subject to and manifests your agreement with GoldmanSachs to use such information only in accordance with the terms set forth above. Goldman Sachs has caused its proprietary information to be delivered to you in reliance upon such agreement.

Not a Valuation: Values herein are not customer valuations and should not be used in lieu of a customer valuation statement or account statement. These values may not reflect the value of thepositions carried on the books and records of Goldman Sachs or its affiliates and should not be relied upon for the maintenance of your books and records or for any tax, accounting, legal or otherpurposes. The information provided herein does not supersede any customer statements, confirmations or other similar notifications.

Disclaimer for clients (cont.)
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Indicative Terms/Pricing Levels: This material may contain indicative terms only, including but not limited to pricing levels. There is no representation that any transaction can or could have beeneffected at such terms or prices. Proposed terms and conditions are for discussion purposes only. Finalized terms and conditions are subject to further discussion and negotiation.

OTC Derivatives Risk Disclosures:

Terms of the Transaction: To understand clearly the terms and conditions of any OTC derivative transaction you may enter into, you should carefully review the Master Agreement, including any relatedschedules, credit support documents, addenda and exhibits. You should not enter into OTC derivative transactions unless you understand the terms of the transaction you are entering into as well asthe nature and extent of your risk exposure. You should also be satisfied that the OTC derivative transaction is appropriate for you in light of your circumstances and financial condition. You may berequested to post margin or collateral to support written OTC derivatives at levels consistent with the internal policies of Goldman Sachs.

Liquidity Risk: There is no public market for OTC derivative transactions and, therefore, it may be difficult or impossible to liquidate an existing position on favorable terms.

Transfer Restrictions: OTC derivative transactions entered into with one or more affiliates of The Goldman Sachs Group, Inc. (Goldman Sachs) cannot be assigned or otherwise transferred without itsprior written consent and, therefore, it may be impossible for you to transfer any OTC derivative transaction to a third party.

Conflict of Interests: Goldman Sachs may from time to time be an active participant on both sides of the market for the underlying securities, commodities, futures, options or any other derivative orinstrument identical or related to those mentioned herein (together, "the Product"). Goldman Sachs at any time may have long or short positions in, or buy and sell Products (on a principal basis orotherwise) identical or related to those mentioned herein. Goldman Sachs hedging and trading activities may affect the value of the Products.

Counterparty Credit Risk: Because Goldman Sachs, may be obligated to make substantial payments to you as a condition of an OTC derivative transaction, you must evaluate the credit risk of doingbusiness with Goldman Sachs or its affiliates.

Pricing and Valuation: The price of each OTC derivative transaction is individually negotiated between Goldman Sachs and each counterparty and Goldman Sachs does not represent or warrant that theprices for which it offers OTC derivative transactions are the best prices available, possibly making it difficult for you to establish what is a fair price for a particular OTC derivative transaction; The valueor quoted price of the Product at any time, however, will reflect many factors and cannot be predicted. If Goldman Sachs makes a market in the offered Product, the price quoted by Goldman Sachswould reflect any changes in market conditions and other relevant factors, and the quoted price (and the value of the Product that Goldman Sachs will use for account statements or otherwise) could behigher or lower than the original price, and may be higher or lower than the value of the Product as determined by reference to pricing models used by Goldman Sachs. If at any time a third party dealerquotes a price to purchase the Product or otherwise values the Product, that price may be significantly different (higher or lower) than any price quoted by Goldman Sachs. Furthermore, if you sell theProduct, you will likely be charged a commission for secondary market transactions, or the price will likely reflect a dealer discount. Goldman Sachs may, but is not obliged to, make a market. To theextent Goldman Sachs makes a market, any price quoted for the OTC derivative transactions, Goldman Sachs may differ significantly from (i) their value determined by reference to Goldman Sachspricing models and (ii) any price quoted by a third party. The market price of the OTC derivative transaction may be influenced by many unpredictable factors, including economic conditions, thecreditworthiness of Goldman Sachs, the value of any underlyers, and certain actions taken by Goldman Sachs.

Market Making, Investing and Lending: Goldman Sachs engages in market making, investing and lending businesses for its own account and the accounts of its affiliates in the same or similarinstruments underlying OTC derivative transactions (including such trading as Goldman Sachs deems appropriate in its sole discretion to hedge its market risk in any OTC derivative transaction whetherbetween Goldman Sachs and you or with third parties) and such trading may affect the value of an OTC derivative transaction.



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Early Termination Payments: The provisions of an OTC Derivative Transaction may allow for early termination and, in such cases, either you or Goldman Sachs may be required to make a potentiallysignificant termination payment depending upon whether the OTC Derivative Transaction is in-the-money to Goldman Sachs or you at the time of termination.

Indexes: Goldman Sachs does not warrant, and takes no responsibility for, the structure, method of computation or publication of any currency exchange rates, interest rates, indexes of such rates, or

credit, equity or other indexes, unless Goldman Sachs specifically advises you otherwise.

Goldman Sachs is not regulated in Ukraine. You should ensure that you have all necessary licences to hold cash / securities (as applicable) offshore.

GOLDMAN SACHS AND ITS AFFILIATES NEITHER UNDERTAKE BANKING, FINANCIAL, OR INVESTMENT CONSULTATION BUSINESS IN OR INTO THE UAE WITHIN THE MEANING OF THECENTRAL BANK BOARD OF DIRECTORS' RESOLUTION NO. 164/8/94 REGARDING THE REGULATION FOR INVESTMENT COMPANIES NOR PROVIDE FINANCIAL ANALYSIS ORCONSULTATION SERVICES IN OR INTO THE UAE WITHIN THE MEANING OF EMIRATES SECURITIES AND COMMODITIES AUTHORITY DECISION NO. 48/R OF 2008 CONCERNINGFINANCIAL CONSULTATION AND FINANCIAL ANALYSIS.

Notice to South African Investors

Goldman Sachs does not provide tax, accounting, investment or legal advice to our clients, and all clients are advised to con sult with their own advisers regarding any potential investment/transaction.This material is for discussion purposes only, and does not purport to contain a comprehensive analysis of the risk/rewards of any idea or strategy herein. Any potential investment/transaction described

within is subject to change and Goldman Sachs Internal approvals. Goldman Sachs International is an authorised financial services provider in South Africa under the Financial Advisory andIntermediary Services (FAIS) Act, 2002. However it is exempt from certain provisions of that act with respect to Certain Cl ients, which may include you, by virtue of the Notice on Amendment ofExemptions 2012.

Notice to Australian Investors

When this document is disseminated in Australia by Goldman, Sachs & Co. (GSCo) , Goldman Sachs International (GSI), Goldman Sachs (Asia) L.L.C. (GSALLC) or Goldman Sachs (Singapore)Pte (GSSP) (collectively the GS entities), this document, and any access to it, is intended only for a person that has first satisfied the GS entities that:

the person is a Sophisticated or Professional Investor for the purposes of section 708 of the Corporations Act of Australia ; and the person is a wholesale c lient for the purpose of section 761G of the Corporations Act of Australia.

To the extent that the GS entities are providing a financial service in Australia, the GS entities are each exempt from the requirement to hold an Australian financial services licence for the financial

services they provide in Australia. Each of the GS entities are regulated by a foreign regulator under foreign laws which differ from Australian laws, specifically:

GSCo is regulated by the US Securities and Exchange Commission under US laws; GSI is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, under UK laws; GSALLC is regulated by the Hong Kong Securities and Futures Commission under Hong Kong laws; and GSSP is regulated by the Monetary Authority of Singapore under Singapore laws.



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Notice to New Zealand Investors

When this document is disseminated in New Zealand by Goldman, Sachs & Co., this document, and any access to it, is intended only for a person that has first satisfied Goldman Sachs that the personis someone:

whose principal business is the investment of money or who, in the course of and for the purposes of their business, habitually invests money; or to whom an offer of the interests may be made in circumstances that do not consti tute an offer to the public for the purposes of section 3 (excluding section 3(2)(a)(iia)) or section 5(2CB) of theSecurities Act 1978 (NZ).

No offer to acquire the interests is being made to you in this document. Any offer will only be made in circumstances where disclosure is not required under the Securities Act 1978 (NZ), the SecuritiesRegulations 1983 (NZ) or the Securities Regulations 2009 (NZ).

Notice to Brazilian Investors

The offer of any securities mentioned in this message may not be made to the general public in Brazil. Accordingly, any such securities have not been nor will they be registered with the BrazilianSecurities Commission (Comisso de Valores Mobilirios) nor has any offer been submitted to the foregoing agency for approval. Documents relating to the offer, as well as the info rmation containedtherein, may not be supplied to the public in Brazil, as the offer is not a public offering of securities in Brazil.

Ouvidoria Goldman Sachs Brasil: 0800 727 5764 e/ou [email protected]

Horrio de funcionamento: segunda-feira sexta-feira (exceto feriados), das 9hs s 18hs.

Ombudsman Goldman Sachs Brazil: 0800 727 5764 and / [email protected]

Available Weekdays (except holidays), from 9 am to 6 pm.

More information

The ombudsman is a channel for the customer to make claims of products and services of Goldman Sachs that were not solved through usual channels. The service will be held by a person dulycertified for this activity and to evaluate your claim the following principles will be used: transparency, independence and impartiality.

Notice to Chilean Clients

Any securities discussed in this presentation have not been registered in the securities register kept by the Superintendencia de Valores y Seguros ("SVS"), as foreign securities, and, therefore, they arenot subject to the supervision of the SVS. The securities are not directed to the Chilean Market, consequently, this message neither is nor constitutes and cannot be deemed as a public offer, asregulated in the Chilean Securities Market Law, N 18.045 (Ley de Mercado de Valores), of the securities to any Chilean resident.

mailto:[email protected]:[email protected]:[email protected]:[email protected]


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Notice to Colombian Investors

For products and/or services marketed through the Goldman, Sachs & Co. Representative Office The products and/or services described herein are being marketed to you by the RepresentativeOffice (the Representative Office) of Goldman, Sachs & Co. (GS&Co.), which has been authorized by the Colombian Financial Superintendency (the Superintendency) to act in accordance withthe provisions contained in Decree 2555 of 2010 (Decree 2555) and Chapter V, Title I of External Circular 007 of 1996 (Circular 007) issued by the Superintendency. GS&Co. will provide and/orrender such products and/or services to you and, subject to the disclaimers described herein, assumes responsibility for such products and/or services. Subject to the disclaimers otherwise describedherein, the legal, accounting, financial, commercial and administrative characteristics, including the applicable governing law, of the products and/or services are described herein or have otherwisebeen or will be provided to you. GS&Co. is registered as a broker-dealer and an investment adviser with, and is subject to the supervision of, the U.S. Securities and Exchange Commission (theSEC). GS&Co. is also registered as a futures commission merchant and a swap dealer with, and is subject to the supervision of, the U.S. Commodity Futures Trading Commission (the CFTC).GS&Co. is a member of the Financial Industry Regulatory Authority ("FINRA"), the New York Stock Exchange, and the Securities InvestorProtection Corporation (SIPC). SIPC protects SIPC-eligibleassets custodied in GS&Co. accounts held in the same title and capacity up to an aggregate maximum of $500,000, of which $250,000 may be in cash. Assets not held by GS&Co. (including interestsin private funds) and certain other assets are not subject to SIPC or supplemental insurance coverage. You may obtain information about SIPC, including a brochure describing SIPC and informationabout which assets are eligible for SIPC protection, by contacting SIPC via telephone at 202-371-8300 or accessing the SIPC website at www.sipc.org. None of the products and/or services of GS&Co.are insured by the FDIC (Federal Deposit Insurance Corporation). Any complaint regarding the promotional activities carried out by the Representative Office can be sent by mail to the followingaddress in Colombia: Calle 67 No. 7-35, Oficina 1204, Bogot Colombia or directly to your sales professional. The Representative Office is not required under Colombian Law to have a customerombudsman.

For offers of securities in the Republic of Colombia This material is for the clients sole and exclusive use and cannot be understood as being addressed to, or be used by, any third party, including but

not limited to those third parties for which the addressee can legally or contractually represent. The securities have not been and will not be offered in the Republic of Colombia (Colombia) through apublic offering pursuant to Colombian laws and regulations and will not be registered in the Colombian National Registry of Securities and Issuers or on the Colombian Stock Exchange. The clientacknowledges that the Colombian laws and regulations (specifically foreign exchange and tax regulations) are applicable to any transaction or investment made in connection with the securities and thatthe client is the sole party liable for full compliance with any such laws and regulations. The investment in the securities is a permitted investment for the client under its corporate bylaws and/orparticular applicable investment regime. Please contact your sales representative for further information about the securities and applicable selling restrictions.

Notice to Israeli Investors

GS is not licensed to provide investment advice or investment management services under Israeli law.

2013 Goldman Sachs. All rights reserved.

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/ / JCRR&I http://www2.content.gs.com/disclaimer/ratings.html

Product Specific Risk Disclosure

The ideas detailed in this presentation may involve the purchase of options, in this case the premium paid may be lost if favourable market movement for the structure concerned does not take place.

Disclaimer for clients based in Japan
http://www2.content.gs.com/disclaimer/ratings.htmlhttp://www2.content.gs.com/disclaimer/ratings.html