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 except nasdaq in a slow uptrend. SP500 breaks above 1300 far from being overbought. ND100 now in a trading range between 1640 and 1700. DOW avoids sell signal and way above 11000. Markets now in a slow uptrend 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 1307.25 -52.83 25.83 0 ND100 Buy February 3 2006 1664.53 1685.66 21.13 -36.09 1 Dow Buy January 25 2006 10708 11280 572 203 0 SP500 Last Signal Comment Our last sell signal is now behind 53 points. SP500 turned up to cross 1300 and now shows a slow uptrend. Investors now believe rate hikes will be over with the last hike at end of march. SP500 is not overbought even after such a good week. We can almost say that we will need higher level before thinking about a correction in this market. We might see small set back but followed by new intermediate highs. 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 ahead 21 points. This market continues to struggle to hold on around the last buy signal level. We can now see on the graphic a trading range between 1630 and 1700. The current short term downtrend is near to be reversed. This is the only market not participating in the recent upmove in other markets. So we need this market to get above 1700 to stop this downtrend. 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 will consider from today that the last buy signal was on January 25 2006 (See graphic below). So far we are ahead 572 points with the latest buy signal. Dow continue to remain strong reaching new highs week after week. 11000 will soon become a support level. DOW is the only market getting close to overbought level (RSI at 64). This week we got away from a possible sell signal. We might see some short term set back soon but I believe we will see new highs thereafter. Our first support is now at 10200 and our next support is at 10000. Special Option Strategy Update Our April SPX naked PUT 1185 entered at 2.40$ is now worthed 1.00$ 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. Gold Index will be there today (XAU). Take a look at this page and please let me know if you have any questions about something you don't understand. Later today you will see on the options signals page where next targets are for each market covered. Please use the link mentionned above to see the target numbers. At this time XAU is the closest market for a new trade opportunity. 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 Gold Index (XAU) is now covered. You can see the historical for 2004 and 2005 as well as 2006 on the options trading page. This market is about 7 points away to qualify for a new trade. Nasdaq 100 (QQQQ) 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 -1.3% +0.7% +0.7% +0.8% +0.3% +0.2% -2.1% +0.3% +1.0% 0.3% + 1.5% CPI +0.1% +0.7% -0.1% -0.6% +0.2% +1.2% +0.5% +0.5% +0.1% - 0.01% + 0.5% Core CPI +0.1% +0.2% +0.1% +0.2% +0.2% +0.3% +0.1% +0.1% +0.1% + 0.01% Unchanged Housing Starts 2.12M 2.28M 1.933M 2.12M 2.02M 2.13M 2.04M 2.042M 2.045M + 0.02% Building Permits 2.15M 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 4 major Economic numbers. You can find latest numbers in the table above. Retail sales were down 1.3%. CPI was up only 0.1% while the core CPI was also up only 0.1%. Housing starts were down to 2.12M (-7.8%) and the building permits were down to 2.15M from 2.22M in january. All those markets show economic slowdown but also a relief on interest rates hike. We now believe that the last rate hike will be at end of march. This was the trigger for this week good rally on the market. The crude is now at 64$. 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 19.64 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.