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 2 weeks from today. 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 sideways and are still in a short term downtrend. SP500 came close to give a buy signal but remains in a short term downtrend. ND100 is the weakest of our markets barely holding on around it's lower band. DOW is our strongest market so far being above the moving average. Downtrend pattern unresolved 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 1266.99 -12.57 2.96 0 ND100 Buy February 3 2006 1664.53 1663.75 -0.78 -0.78 1 Dow Sell December 29 2005 10785 10919 -134 125 0 SP500 Last Signal Comment Our last sell signal is now behind only 13 points. This week was quite choppy. We came 1 point away to get a buy signal, then the market rebounded to the moving average (1270) and then retreated again to end up only 3 points better than last week. Acquired short term downtrend remains unresolved for the moment. We should get a retreat sooner or later to the lower band (now declining 1 point per day) around 1245 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 last buy signal is behing only 1 point after a week. This market is struggling to hold on around the last buy signal level. For a moment we thought it would fall a lot further following bad financial results and lower guidances from some high tech firms. As expected we had a false start. It is now possible that we will have a short term rebound this week. But I doubt it will last long. 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 140 points with the latest sell signal. Dow is the only market not showing that much weakness. It found the way to get above the moving average and is only 100 points away to retry a break out above 11000. I doubt however it will happen soon. We can expect this market at best to stay in a trading range between 10650 and 11000. 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 0.15$. This is again in a very good shape. We have 1 more week 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. It will start 2 weeks from now. 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 no major Economic numbers. You can find latest numbers in the table above. The crude is now under 62$ a fair set back for the week but is still high and threatening econimic growth. The prime is now at 4.50. Contrary to what we were expecting the FED said it might raise rates again soon. 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.