The Index Trading Weekly Newsletter Is now accessible directly from an RSS Feed. If you have a My Yahoo account or an My Msn account go to the Weekly newsletter page to register and you will be advised immediately when changes occur on the site either with trading signals, weekly newsletter or any other changes on the site. You can also create a new entry in an RSS reader. Click Here to register for RSS Feed Markets brief Markets remain in a tight trading range and their respective supports are now stronger and stronger. Year end rally could now start at any time SP500 is near breaking the 1200 resistance. We are not oversold anymore. Beginning of a new cycle is imminent. November and december are by far the best 2 months of the year. ND100 was a bit weaker this week but seems to hold on. DOW is now above the moving average and seems ready to continue this new cycle. 10200 is now a very solid support. Beginning of a new cycle is imminent. Year end rally near by ? Last trades update Index Market Last signal Entry date Entry Price Current Price Win / Loss Weekly Change # cycles completed SP500 Buy August 26th 2005 1205.10 1198.41 -6.71 18.82 3 ND100 Buy October 6 2005 1552.94 1557.11 4.17 -8.01 3 Dow Buy August 24 2005 10435 10403 -32 187.55 3 SP500 Last Signal Comment Our last buy signal is now behing only 7 points. SP500 went 2 times from the support line 1170-1180 to the resistance level 1200 to finish right at the resistance level of 1200. The downtrend we were in is near to be broken. I believe the year end market rally is about to start considering that november and december are 2 good months. Our 1170-1180 support level is now very strong and should hold. We can now expect the beginning of a new cycle any time soon that could carry us up to 1300. Our next support is at 1140 and the next one is between 1080 and 1100. We just completed our third cycle this year. ND100 Last Signal Comment Our last buy signal is now ahead 4 points. ND100 was weaker this week but still holding on. The mild downtrend lasting for 5-6 weeks is about to be broken considering we have quite a positive divergence building up. We can expect this market to retest 1625 level before the end of the year. We can consider that our first support is at 1500 and the next support is at 1400. DOW Last Signal Comment We had our last buy signal on august 24. So far we are behind 32 points with the latest buy signal. DOW now have a very strong support at 10200 level. DOW is about to reach the upper band and continue it's year end rally. Pursue of a new cycle is now expected. DOW so far is the strongest market of all 3. We had so far already 3 completed cycles this year. The next support is at 10000. Special Option Strategy Update Our SPX naked PUT for November now worth 0.90$. I have no doubt now that this will produce another nice profit. We have 3 weeks left before expiration. Always remember that you need between 11,000 and 15,000 USD margin for each contract. Economic Current Conditions Table of Economic Numbers Economic Info September 2005 August 2005 July 2005 June 2005 May 2005 Apr 2005 PPI +1.9% +0.6% +1.0% Unchanged -0.06% Core PPI +0.3% +0.2% +0.4% +0.1% + 0.01% Retail Sales +0.2% -2.1% +0.3% +1.0% 0.3% + 1.5% CPI +1.2% +0.5% +0.5% +0.1% - 0.01% + 0.5% Core CPI +0.1% +0.1% +0.1% + 0.01% Unchanged Housing Starts 2.11M 2.04M 2.042M 2.045M + 0.02% Building Permits 2.19M 2.14 Millions 2.167 Millions 2.132 Millions 2.11 Millions 2.15 Millions Employment -35,000 211,000 242,000 166,000 104,000(revised) 275,000 Durable Goods Orders -2.1% +3.8 -5.3% +1.5% + 6.4%(revised) Durable Goods Excluding Transportation +4.2 -3.7% +2.6% +0.9%(revised) New Homes Sales +2.1% -1% +6% + 2.1% Existing Homes Sales 7.28 Millions 7.29 Millions 7.15 Millions 7.35 Millions ISM Index(Manufacturing) 59.4% 53.6% 56.6% 53.8% 51.4% ISM Services 53.3% 65.0% 60.5% 62.2% Factory Orders +2.5% -1.9% +0.9% +0.7% GDP(Gross Domestic Product) Numbers 3rd Quarter 2005 2nd Quarter 2005 1st Quarter 2005 4th Quarter 2004 3.8% 3.3% 3.8%(revised) 3.5% Inflation Numbers 2nd Quarter 2005 1st Quarter 2005 2.4% 3.1% This week we had 4 major Economic numbers. You can find latest numbers in the table above. The Durable good orders were down 2.1% while the new home sales were up 2.1% and the existing home sales remain just about the same. The GDP for the 2005 third quarter was up 3.8% better than expected. The crude is near 61$. If the crude can stabilize around 60 for a long time it will create more stability for prices and keep the inflation under control. The prime is now at 3.75. Mr. Greenspan is sticking to it's gun and did not mention any easing on it's policy of rate hiking despite devastation in Louisiana and Texas. At least 2 other rate hikes are expected in Novembre and December. We are now out of the dangerous period of the year (August - Mid October). Financial results we got so far were inline with expectations and inflation fears remain a preoccupation for investors. The table is set to see our 10% yearly rally that may just have started last friday. This strong kind of market happen very often in the last quarter. So we should get prepared for that. The SP500 PE ratio is at 19.54 which is still considered low. Remember that when the last major economic cycle that started in march 2003 the PE ratio was at around 16. So we are at the low end. The markets are way from being overbought and we should not expect any major bear market for the time being.