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 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 consolidating on past week strong gains. SP500 attempting to reach 1300 target but pulled back. ND100 continues up and now near 1750 target. DOW cannot break above 11000. Markets holding 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 1287.61 -33.19 2.16 0 ND100 Buy December 31 2005 1645.20 1746.78 101.68 11.79 0 Dow Sell December 29 2005 10785 10960 -175 -167 0 SP500 Last Signal Comment Our last sell signal is now behind 33 points. We came 10 points shy to get a buy signal last week. SP500 was able to hold on previous week strong gain. It came close to 1300 (1295) but pulled back a little from that point. We can see beginning of negative divergences which may affect the market in a few weeks from now. We had few lower guidances about financial results from some companies. If this is becoming broad base we could have a correction, but that remains to be confirmed. We can expect for the short term the consolidation to continue and another attempt to 1300 remains possible. 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). 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 is now 101 points ahead. This is the only market that felt enough to give us a buy signal. ND100 continued it's upswing to add an extra 11 points to previous gain. We reached during the week our 1750 target and we are now just under 1750. We can expect some consolidation to occur around that level and follow any sell signal that might occur on a sudden weakness. 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 167 points with the latest sell signal. DOW continues attempts to break out above 11000 but failed again this week. It closed once above 11000 but pulled back just under. Many times this level was challenged without sucess so far. Considering that our 2 other markets are about to confirm a breakout we can expect other attempts to break out above 11000. Before we might see some consolidation around that level. 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 0.20$. This is going nicely again. We have 1 week before expiration. For those who entered SPX 1205 january PUT at around 2.40$ now worth 0.25$. Always remember that you need between 11,000 and 15,000 USD margin for each contract. Economic Current Conditions Table of Economic Numbers Economic Info December 2005 November 2005 October 2005 September 2005 August 2005 July 2005 June 2005 May 2005 Apr 2005 PPI +0.9% -0.7% +0.7% +1.9% +0.6% +1.0% Unchanged -0.06% Core PPI +0.1%- +0.1% -0.3% +0.3% +0.2% +0.4% +0.1% + 0.01% Retail Sales +0.7% +0.8% +0.3% +0.2% -2.1% +0.3% +1.0% 0.3% + 1.5% CPI -0.6% +0.2% +1.2% +0.5% +0.5% +0.1% - 0.01% + 0.5% Core CPI +0.2% +0.2% +0.3% +0.1% +0.1% +0.1% + 0.01% Unchanged Housing Starts 2.12M 2.02M 2.13M 2.04M 2.042M 2.045M + 0.02% Building Permits 2.16M 2.10M 2.22M 2.14 Millions 2.167 Millions 2.132 Millions 2.11 Millions 2.15 Millions Employment 108,000 305,000 44,000 -35,000 211,000 242,000 166,000 104,000(revised) 275,000 Durable Goods Orders +4.4% +3.0% -2.1% +3.8 -5.3% +1.5% + 6.4%(revised) Durable Goods Excluding Transportation +4.2 -3.7% +2.6% +0.9%(revised) New Homes Sales -10.71% +12.9 +2.1% -1% +6% + 2.1% Existing Homes Sales 6.97 Millions 7.09 Millions 7.29 Millions 7.29 Millions 7.15 Millions 7.35 Millions ISM Index(Manufacturing) 54.2% 56.6% 59.1% 59.4% 53.6% 56.6% 53.8% 51.4% ISM Services 58.9% 60.0% 53.3% 65.0% 60.5% 62.2% Factory Orders +2.2% -1.7% +2.5% -1.9% +0.9% +0.7% GDP(Gross Domestic Product) Numbers 3rd Quarter 2005 2nd Quarter 2005 1st Quarter 2005 4th Quarter 2004 4.3% 3.3% 3.8%(revised) 3.5% Inflation Numbers 3rd Quarter 2005 2nd Quarter 2005 1st Quarter 2005 4.3% 2.4% 3.1% This week we had 2 major Economic numbers. You can find latest numbers in the table above. December PPI was up 0.9% a bit more than expected but the core PPI was up only 0.1% better than expected. Retail sales were up 0.7% inline with expectations. Again those last 2 numbers were good news for inflation. We can continue to say that we don't have more than one rate hike left at the end of january. The crude stays above 60$ (64.58) 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.