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 setting back under high crude oil price. SP500 could not reach 1300 target and pulled back strongly on friday. ND100 collapsed and giving a new sell signal. DOW collapsed also and is now back at the lower band. Markets setting back 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 1261.49 -7.07 -26.12 0 ND100 Sell January 20 2006 1676.38 1676.38 -70.4 1 Dow Sell December 29 2005 10785 10667 118 -292 0 SP500 Last Signal Comment Our last sell signal is now only behind 7 points and it all indicates we will have some little profit on that sell trade. This week was a sell off week based on 2 facts. First first financial results were not too good with several big firms reporting results lower than expected. Second the crude price is approaching 70$ again sending fears into the market. The negative divergence mentionned in the previous number kicked in earlier than expected and leaded to this week decline. We can now expect for the short term SP500 to touch the lower band which is about 14 points lower and possibly giving us a new buy signal. So stay tuned during the week for new instructions in this market. 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. ND100 Last Signal Comment We just had a new sell signal last friday giving us a small 31 points profit (1.89%) from our previous buy signal. This market was touched much more than SP500 losing about 4% this week following bad financial results from semiconductor sector. We can expect ND100 to continue lower and hit the lower band any time soon and giving us a new buy signal. So stay tuned during the week for any new instructions in this market. 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 now ahead 118 points with the latest sell signal. DOW missed another attempt to break out above 11000. DOW pulled back strong to it's lower band. We now have a pending buy signal. DOW is touching the lower band right now but considering it felt too fast we will delay the buy signal for a while. So stay tuned for any new instructions during the week for this market as well. 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$ is now expired and gave us a nice 3.60$ profit. Same thing with our SPX 1205 january PUT giving us a nice 2.40$ profit. We now enter a new transaction by selling an SPX February 1175 PUT at around 2.30$. This number was selected because it is way under our 2% band offset (extraordinary investing opportunity level on trading signals page). Considering we may enter in a bear market one month away from now we must be carefull with this trade. 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 -0.1% -0.6% +0.2% +1.2% +0.5% +0.5% +0.1% - 0.01% + 0.5% Core CPI +0.2% +0.2% +0.2% +0.3% +0.1% +0.1% +0.1% + 0.01% Unchanged Housing Starts 1.933M 2.12M 2.02M 2.13M 2.04M 2.042M 2.045M + 0.02% Building Permits 2.068M 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 3 major Economic numbers. You can find latest numbers in the table above. December CPI was down 0.1% with core CPI up 0.2% quite inline with expectations. Housing starts were down near 9% and building permits were down 4.4%. Those last 2 numbers show economy slowdown and in a way 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 continues to climb and is now above 68$ and is threatening again econimic growth. If it says to high again that could get us into a bear 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 18.75 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.