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 2005 performance results review Market Signals Nb. Signals Win Signals Loss Signals Net Points Net % Year to Year Variation SP500 Buy Only 4 3 1 88.51 7.51 3.00 Buy & Sell 8 5 3 110.65 9.35 ND100 Buy Only 4 3 1 187.81 12.63 1.49 Buy & Sell 9 8 1 302.25 20.09 DOW Buy Only 5 4 1 642 6.14 -0.61 Buy & Sell 10 9 1 1111 10.68 Overall on all markets for buy & sell signals we had 22 winning signals and only 5 losing signals. Once again we managed to maintain our 80% success rate. Please note we will provide shortly an extended service to take advantage of short term swings we often have at the beginning of a new cycle. Simulated results for 2004 and 2005 were extraordinary and will be published soon. This will be perfect for Index Options traders as well as for Eminis traders. Markets brief All markets going strongly north on FED accomodative comments. SP500 attempting to break out above recent resistance of 1275. ND100 doing well with last buy signal and is also attempting to break out above recent resistance of 1710. DOW approaching the 11000 resistance level. Fed Drives markets up Last trades update Index Market Last signal Entry date Entry Price Current Price Win / Loss Weekly Change # cycles completed SP500 Sell December 29th 2005 1254.42 1285.46 -41.04 37.16 0 ND100 Buy December 31 2005 1545.20 1734.99 89.79 241.81 0 Dow Sell December 29 2005 10785 10959 -174 -166 0 SP500 Last Signal Comment Our last sell signal given this week is now behind 41 points. We came 10 points shy to get a buy signal. Too bad we will have to wait several weeks to get a new buy signal. Resistance of 1245 held on well and SP500 is now breakout above 1275 resistance. FED was very accomodating this week about a definitive stop on rate hikes very soon in the year. That was enough to drive all markets up real strong. The RSI is not overbought yet leaving some space for some more gains. We were expecting a 10% gain in mid october. I guess it is coming late but if we reach 1300 that would give 120 points from where the market started (1180). We can then expect this market to reach 1300 and possibly more in the coming weeks. Our 1170-1180 support level is our first support level. 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 just occured on the last day of the year and is now 90 points ahead. This is the only market that felt enough to give us a buy signal. ND100 had it's best week in months to break above latest resistance of 1710. ND100 is not overbought yet leaving some space to get higher in the coming weeks. 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 sell signal on December 29. So far we are behing 174 points with the latest sell signal. DOW had a nice rally like all markets and is now right at it's 11000 resistance level. Many times this level was challenged without sucess so far. Considering that our 2 other markets are about to confirm a breakout we can consider that it will happen soon in the coming weeks. Our first support is now at 10200 and our next support is at 10000. Special Option Strategy Update Our SPX 1200 january PUT sold at 3.60$ now worth about 0.30$. This is going nicely again. We have 2 weeks before expiration. For those who entered SPX 1205 january PUT at around 2.40$ now worth 0.40$. I have never seen a major bear market starting in january in the past 17 years. 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 December 2005 November 2005 October 2005 September 2005 August 2005 July 2005 June 2005 May 2005 Apr 2005 PPI -0.7% +0.7% +1.9% +0.6% +1.0% Unchanged -0.06% Core PPI +0.1% -0.3% +0.3% +0.2% +0.4% +0.1% + 0.01% Retail Sales +0.3% +0.3% +0.2% -2.1% +0.3% +1.0% 0.3% + 1.5% CPI -0.6% +0.2% +1.2% +0.5% +0.5% +0.1% - 0.01% + 0.5% Core CPI +0.2% +0.2% +0.3% +0.1% +0.1% +0.1% + 0.01% Unchanged Housing Starts 2.12M 2.02M 2.13M 2.04M 2.042M 2.045M + 0.02% Building Permits 2.16M 2.10M 2.22M 2.14 Millions 2.167 Millions 2.132 Millions 2.11 Millions 2.15 Millions Employment 108,000 305,000 44,000 -35,000 211,000 242,000 166,000 104,000(revised) 275,000 Durable Goods Orders +4.4% +3.0% -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 -10.71% +12.9 +2.1% -1% +6% + 2.1% Existing Homes Sales 6.97 Millions 7.09 Millions 7.29 Millions 7.29 Millions 7.15 Millions 7.35 Millions ISM Index(Manufacturing) 54.2% 56.6% 59.1% 59.4% 53.6% 56.6% 53.8% 51.4% ISM Services 58.9% 60.0% 53.3% 65.0% 60.5% 62.2% Factory Orders +2.2% -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 had 2 major Economic numbers. You can find latest numbers in the table above. December ISM manufacturing index felt to 54.2 lower than expected. December employment number came up at only 108,000 much lower than expected. Again those last 2 numbers were good news for inflation and also suggest an economic slow down. We can continue to say that we don't have more than one rate hike left at the end of january. The crude is now back way above 60$ (64) and is threatening again econimic growth. If it says to high again that will stop our current strong market. The prime is now at 4.25. Statement from officals were accomodating and we can expect an end to rate hikes somewhere in the next 2 meetings. The SP500 PE ratio is at 19 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. Despite the fact the PE is not too high we will have to watch for a possible bear market this spring or later in the fall for the coming year. Our last major bear market was on july 2002.