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 All markets had long awaited short term set back. SP500 had a short term set back down to 1249 and rebounded. SP500 is just out of the overbought zone. ND100 had it's set back too but found the way to set a new year high. DOW could not break above 11000 and had a set back under 10900. Markets under pause 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 1265.08 59.98 -3.17 3 ND100 Buy October 6 2005 1552.94 1709.10 156.16 8.05 3 Dow Buy August 24 2005 10435 10878 443 -54.11 3 SP500 Last Signal Comment Our last buy signal is now ahead 60 points(5%). SP500 finally had a short term set back to 1249. It was near the 1245 breakout level which acted as a support. SP500 rebounded nicely and remains just out of the overbought zone with an RSI reading of 69. I still expect this market to continue up slowly for almost the rest of the year and possibly reach 1300 before year end. Our 1170-1180 support level is now an official support level. Our first support is now at 1180 and our next support is at 1140 and the next one is between 1080 and 1100. We are now starting our fourth cycle this year. ND100 Last Signal Comment Our last buy signal is now ahead 156 points (10%). ND100 is the only market posting a gain this week. ND100 also had a short term set back but rebounded above the previous high of 1701. ND100 is just a bit overbought with an RSI reading of 71. It is still possible we may reach 1750 before year end. We can consider that our first support is now at 1530, our next support at 1500 and the next one is at 1410. DOW Last Signal Comment We had our last buy signal on august 24. So far we are ahead 443 points with the latest buy signal. DOW could not break above year high of 11000 and had a set back under 10900. DOW should break 11000 before year end and establish higher marks. DOW is now out of the overbought zone. We can also expect this market to continue the current rally almost for the rest of the year. Year high of 11000 should be rechallenged and should be broken before year end. We had so far already 3 completed cycles this year. Our first support is now at 10200 and our next support is at 10000. Special Option Strategy Update Our December 1170 PUT contract sold at 2.60$ now worth 0.30$. We now recommend to do another rollover. We can buy back our 1170 November SPX PUT at 0.30$ and sell a 1200 SPX january PUT at 3.50$. 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 November 2005 October 2005 September 2005 August 2005 July 2005 June 2005 May 2005 Apr 2005 PPI +0.7% +1.9% +0.6% +1.0% Unchanged -0.06% Core PPI -0.3% +0.3% +0.2% +0.4% +0.1% + 0.01% Retail Sales +3.7% -0.1% +0.2% -2.1% +0.3% +1.0% 0.3% + 1.5% CPI +0.2% +1.2% +0.5% +0.5% +0.1% - 0.01% + 0.5% Core CPI +0.2% +0.3% +0.1% +0.1% +0.1% + 0.01% Unchanged Housing Starts 2.01M 2.13M 2.04M 2.042M 2.045M + 0.02% Building Permits 2.07M 2.22M 2.14 Millions 2.167 Millions 2.132 Millions 2.11 Millions 2.15 Millions Employment 215,000 44,000 -35,000 211,000 242,000 166,000 104,000(revised) 275,000 Durable Goods Orders +3.4% -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 +12.9 +2.1% -1% +6% + 2.1% Existing Homes Sales 7.09 Millions 7.29 Millions 7.29 Millions 7.15 Millions 7.35 Millions ISM Index(Manufacturing) 58.1% 59.1% 59.4% 53.6% 56.6% 53.8% 51.4% ISM Services 60.0% 53.3% 65.0% 60.5% 62.2% Factory Orders -1.7% +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 4.3% 3.3% 3.8%(revised) 3.5% Inflation Numbers 3rd Quarter 2005 2nd Quarter 2005 1st Quarter 2005 4.3% 2.4% 3.1% This week we several Economic numbers. You can find latest numbers in the table above. Esisting home sales were down sharply. New home sales were up almost 13%. Durable goods orders were up 3.4% higher than expected. Manufacturing activity slowed down a bit but still strong. Retail sales were up 3.7% just under forecast and employement created 215,000 jobs inline with expectations. Revised GDP for third quarter was at 4.3% higher than expected. Again we had inflation worries numbers and inflation ease numbers. Higher than expected GDP revived inflation fears and continued rate hikes. However mixed numbers form real estate market and manufacturing eased spirit a bit. The crude is now above 59$ up again from previous week. If the crude can stabilize under 60 for a long time it will create more stability for prices and keep the inflation under control. The prime is now at 4.00. Tone about rate hikes changed lately which contributed to push all markets up. It has been quite clear on statements that the end of rate hikes is near. We continue in the best period of the year with december which is considered to be the best month of the year historicly. Financial results we got so far were inline with expectations and inflation fears seem to ease a little. Our yearly rally is now in good shape. The SP500 PE ratio is at 18 which is still considered quite 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.