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 Markets brief All markets continues to trade in a very narrow trading range. SP500 had a small set back from it's double top situation. ND100 weakening again near the lower band. DOW remains above 11000 after sinking under 11000 came close to give a sell signal. Markets in tight trading range 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 1281.42 -27.00 -5.81 0 ND100 Buy February 3 2006 1664.53 1648.23 -16.30 -36.09 1 Dow Sell December 29 2005 10785 11076 -291 54 0 SP500 Last Signal Comment Our last sell signal is now behind 27 points. This week was even more dull. SP500 reacted downhill from it's double top position and went near 1270 before finishing strong on friday. Considering that we missed the buy signal by 1 point 4 weeks ago we should consider sell it now if we were long. SP500 continues to drag it's feet between 1270 and 1280. We can continue to expect this market over the next 2-3 weeks to reach the lower band and give us a new buy signal. 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 now behind 16 points. This market continues to struggle to hold on around the last buy signal level. This week was particularly bad for this market losing more than 30 points and getting close to touch the lower band. Our current short term downtrend is not reversed yet and is now lasting for 9 weeks. This market might touch the lower band around 1630 shortly. There we would see on the graphic a positive divergence which could be good enough to start a new cycle. We rarely see this market in a short term downtrend for more than 10 weeks. 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 291 points with the latest sell signal. I must apologize for not mentionning we had a delayed buy signal on january 25th as shown on the graphic below. Dow continue to remain strong with a 50 points gain this week while other markets lost ground. DOW went under 11000 for a while but came back above shortly after giving 11000 level some crudential for now. It came a few points away to get a sell signal but hanged on. If we would be long as shows the graphic below we would be looking for a possible sell signal that could come at any time now. So stay tuned for this possible sell signal in the coming week. Our first support is now at 10200 and our next support is at 10000. Special Option Strategy Update We initiated last monday our position for April. We entered into an April SPX naked PUT 1185 at 2.40$. At this time it is worthed 1.75$ so we are ahead on this one. Always remember that you need between 11,000 and 15,000 USD margin for each contract. Short term Options and Eminis trading Welcome to this new trading service. Click here to find the options trading signals page. There you will find the simulation for 2004 and 2005 for DOW(DIA) and SP500(SPX) plus Energy Index (OIX) options trading. Take a look at this page and please let me know if you have any questions about something you don't understand. For now we have only one entry in the signals table. This is a pending signal for SPX. We would buy an SPX Call option for April 1257 if the SP500 index hits 1257 during the day. The estimated entry price would be at around 22$. Check every day on the page to see if the numbers are changed. Of course we are far from a possible entry for now but we never know. The Energy Index (OIX through XLE etf) is now covered. You can see the historical for 2004 and 2005 as well as 2006 on the options trading page. This market is close to get a new buy opportunity as soon as next week. The OIX index needs to get under 529 for now to generate a buying opportunity. So stay tuned for any development with this sector. We will use options on XLE etf to trade this market. Gold index will be covered shortly. Economic Current Conditions Table of Economic Numbers Economic Info February 2006 January 2006 December 2005 November 2005 October 2005 September 2005 August 2005 July 2005 June 2005 May 2005 Apr 2005 PPI +0.3% +0.6% -0.7% +0.7% +1.9% +0.6% +1.0% Unchanged -0.06% Core PPI +0.4% +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 +0.7% -0.1% -0.6% +0.2% +1.2% +0.5% +0.5% +0.1% - 0.01% + 0.5% Core CPI +0.2% +0.1% +0.2% +0.2% +0.3% +0.1% +0.1% +0.1% + 0.01% Unchanged Housing Starts 2.28M 1.933M 2.12M 2.02M 2.13M 2.04M 2.042M 2.045M + 0.02% Building Permits 2.22M 2.08M 2.16M 2.10M 2.22M 2.14 Millions 2.167 Millions 2.132 Millions 2.11 Millions 2.15 Millions Employment 243,000 170,000 140,000 305,000 44,000 -35,000 211,000 242,000 166,000 104,000(revised) 275,000 Durable Goods Orders -10.2% +2.5% +3.3% +3.0% -2.1% +3.8 -5.3% +1.5% + 6.4%(revised) Durable Goods Excluding Transportation +0.6% +4.2 -3.7% +2.6% +0.9%(revised) New Homes Sales -5.5% +2.9% -10.71% +12.9 +2.1% -1% +6% + 2.1% Existing Homes Sales 6.56 Millions 6.75 Millions 6.97 Millions 7.09 Millions 7.29 Millions 7.29 Millions 7.15 Millions 7.35 Millions ISM Index(Manufacturing) 54.8 55.6% 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 -4.5% +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 1.6% 4.3% 3.3% 3.8%(revised) 3.5% Inflation Numbers 4th Quarter 2005 3rd Quarter 2005 2nd Quarter 2005 1st Quarter 2005 4.07% 4.3% 2.4% 3.1% This week we had 2 major Economic numbers. You can find latest numbers in the table above. Factory orders were down 4.5% for january much worst than expected. Employment for february came in at 243,000 more than expected. Once again we have mixed economic data with factory orders sliding but employment data is up solid. The crude is under 62$ after going under 60$ for a while. It 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. It is widely expected we will have another .25 rate hike at the end of march. The SP500 PE ratio is at 19.25 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.