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. We should be ready by the end of february. 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 rebounding on reversal trend about financial results. SP500 back above moving average on reaction to short term oversold condition. ND100 also had a nice rebound above the moving average. DOW also had a nice rebound and is approaching again 11000. Markets up on strong financial results 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 1283.72 -29.70 22.23 0 ND100 Sell January 20 2006 1676.38 1711.11 -32.73 32.73 1 Dow Sell December 29 2005 10785 10907 -122 240 0 SP500 Last Signal Comment Our last sell signal is now behind 22 points. This week was a quite sharp rebound due to a reversal trend on financial results. We remember that it started on the wrong foot last week but this week most of the companies reported upbeat results resuming the market trend in the upward direction. Crude price decreased a little giving some breathing space. It is a bit hard to forecast what the market will do next. I do expect however to have a resistance around 1290-1295. At least it should be a very good test. If failed we may have a set back to the lower band which is now at 1250. 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 Our sell signal is behind 33 points so far. This market is now back above the moving average rebounding from strong financial results from several firms this week. This market may attempt to retag the last year high at 1750 where we can expect strong resistance. It may take a while to see this market giving us a new buy signal by touching the lower band again. 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 behind 122 points with the latest sell signal. DOW is now attempting again to reach 11000 unexpectedly. This 11000 level should again act as a strong resistance. We will now have to wait longer to see a new buy signal. This market will need to fall to about 10650 to give us a new buy signal. Our first support is now at 10200 and our next support is at 10000. Special Option Strategy Update Our SPX February 1175 PUT sold around 2.30$ now worth 0.60$ thanks to the last week strong market advance. Just another example how this strategy always pays off no matter which direction the market is taking. We have 3 more weeks before expiration. Always remember that you need between 11,000 and 15,000 USD margin for each contract. Short term Options and Eminis trading This space will be reserved in a very near future to resume the current trades with this new service regarding short term options and eminis trading. This will involve at the beginning options and eminis on SP500(SPX) and DOW(DIA). This service should start somewhere by the end of february. So stay tuned. 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 +2.9% -10.71% +12.9 +2.1% -1% +6% + 2.1% Existing Homes Sales 6.6 Millions 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 4th Quarter 2005 3rd Quarter 2005 2nd Quarter 2005 1st Quarter 2005 4th Quarter 2004 1.1% 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. New home sales rebounded a little (+2.9%) after a big slump in November. Existing home sales were down 5.9% confirming a definite slowdown in the real estate market. Finally the GDP for the fourth quarter was only + 1.1% much lower than expected. Those numbers show definite economy slowdown like we mentionned a few times in the past 5 months. This is good news for inflation. We can then say for sure that we will have our last rate hike next week. The crude continues to climb and is now near 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 and should be raised to 4.50 next week which should be the last hike. The SP500 PE ratio is at 19.75 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.