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 retreat under tech bad financial results and fears of more rate hikes. SP500 cannot retag last high and sets back close to give buy signal. ND100 had a very bad week and is now giving us a buy signal. DOW retreated also but a lot less on it's way to hit lower band soon. Markets under downtrend ? 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 1264.03 -9.39 -19.69 0 ND100 Buy February 3 2006 1664.53 -46.58 1 Dow Sell December 29 2005 10785 10794 -9 -114 0 SP500 Last Signal Comment Our last sell signal is now behind only 9 points. Last week sharp rebound was short lived and could not reach last recent high placing this market in a possible downtrend. Financial results released this week were not so good along with FED comments raising doubts on when rate hikes will be over. This time we can expect this market to hit the lower band probably this week around 1250 and giving us a new buy signal the first in 2006. 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 now become a new buy signal. Our last sell signal yielded a small 11.85 profit a bit less than 1%. This market also acquired a downtrend due to the fact that it could not reach it's last recent high and turned south strong. We had a new buy signal much quicker than we thought following a series of bad financial results this week. We can expect a few false starts before we get into a new cycle. We can consider that our first support is now at 1640 followed by another one 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 only 9 points with the latest sell signal. Last attempt to reach 11000 failed again. Like other 2 markets DOW acquired a downtrend direction incapable to reach last recent high and turning back strong. We might get a new buy signal no later than next week around 10650. 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 0.50$. This is again in a very good shape. We have 2 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 January 2006 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 198,000 140,000 305,000 44,000 -35,000 211,000 242,000 166,000 104,000(revised) 275,000 Durable Goods Orders +1.8% +3.3% +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 56.8% 61.0% 58.9% 60.0% 53.3% 65.0% 60.5% 62.2% Factory Orders +1.1% +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 4 major Economic numbers. You can find latest numbers in the table above. January employment was out at 193,000 jobs created. This was considered high and raised fears of new rate hikes. ISM services was at near 57 much lower than expected. Factory orders were up 1.1% and durable good orders were up 1.8%. Those last 2 numbers again show economic slowdown like we mentionned a few times in the past 5 months. The crude had a small set back near 65$ and is still high and threatening econimic growth. If it says too high again that could get us into a bear market. The prime is now at 4.50. Contrary to what we were expecting the FED said it might raise rates again soon. This comment triggered a market selloff. 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.