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 losing momentum All markets continue correction deep into oversold level. SP500 way under lower band approaching stop level. ND100 went through 1650 support and is in a bear market. DOW now under lower band but hanging on quite well under current circumstances. Markets losing momentum Last trades update Index Market Last signal Entry date Entry Price Current Price Win / Loss Weekly Change # cycles completed SP500 Buy May 15th 2006 1294.50 1267.03 -27.47 -24.21 0 ND100 Buy May 11 2006 1657.48 1600.86 -56.62 -34.95 2 Dow Sell April 7 2006 11120 11144 -24 -237 1 SP500 Last Signal Comment Our last sell signal was finally reversed this week by a new buy signal. This sell signal resulted in a 40 points loss. Our new buy signal issued this week is off a bad start and we are already 24 points behind. SP500 reacted negatively on CPI higher than expected results raising fears of more rate hikes. This market is now oversold (RSI at 270). We are now what seems to be the beginning of a bear market. It does not happen often at this time of the year if we except 2002. We have not reached yet stop point for this market but we are close. However a short term up swing is now expected since we are under fast falling market in the last 2 weeks. If we are in a bear market this down and up market movements could last another 6 weeks. So follow all news on our trading signal page for update. 1250 is now our first support. 1170-1180 support level is our second support level. Our next support is at 1140. ND100 Last Signal Comment Our last buy signal is now behind 57 points. ND100 is the weakest of all markets. We have a band offset of 1.45 close to the 2% band offset marking an extreme oversold condition. ND100 went through the first support of 1650 which is now considered to be the next resistance. It is now very oversold(RSI at 26) a short term rebound may just have started on friday. However it could be short lived. We are near getting a stop point in this market. It is obvious that this trade will be a loser trade. But don't get out now. We will wait for a short term upswing to minimize the current loss. After all we had near 10 winning trades in a row in this market. 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 a new sell signal on April 7th. We are now behind 24 points with this new sell signal. Dow continues to set back but not at the same magnitude as our other markets. DOW is now under the lower band. We have a delayed buy signal here again. So if DOW crosses above the lower band we will have a new buy signal. So watch for updates on trading signals page. DOW is not oversold but near to be. Since other 2 markets should have a short term upswing we can DOW to have one too. But it should be short lived since we are now in a bear market. Our first support is now at 10650 and our next support is at 10200. Special Option Strategy Update Our JUNE PUT 1235 sold at around 2.00$ now worth 9.50$. We are behind but nothing to worry about for now with 4 weeks before expiration. What we might do here is if SPX moves higher in a short term upswing we will buy back at a small loss and wait for better condition to enter a new one. So watch trading signal page for update. Always remember that you need between 11,000 and 15,000 USD margin for each contract. Short term Options and Eminis trading Welcome to this new trading service. With this service we should have every month good opportunities. Click here to find the options trading signals page. We had 2 winning trades on SPX one at 450$ profit and another closed friday at 550$ profit. Our 2 trades with QQQQ are now in bad shape. We changed the target numbers to close those trades. They will be at a loss. We also have 2 active trades with SMH(Semi conductor index) Exit target have been revised lower. One of the 2 trades will lose but the second one could win a little if we have an upswing on the market. We have also 2 active trades on Gold index XAU. We also have one active trade on Oil index (XLE). We lowered the target exit number on this trade. The only 2 markets not active at this time are PPH(Pharma) and BBH(Biotech). Those 2 markets behave pretty well compared to most of other markets. See full instructions on options signals page for more details. HHH (Internet Index) will be covered in the weeks to come. Please use the link mentionned above to see the target numbers. 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. Economic Current Conditions Table of Economic Numbers Economic Info April 2006 Mars 2006 February 2006 January 2006 December 2005 November 2005 October 2005 September 2005 August 2005 July 2005 June 2005 May 2005 Apr 2005 PPI +0.9% +0.5% -1.4% +0.3% +0.6% -0.7% +0.7% +1.9% +0.6% +1.0% Unchanged -0.06% Core PPI +0.1% +0.1 +0.3% +0.4% +0.1%- +0.1% -0.3% +0.3% +0.2% +0.4% +0.1% + 0.01% Retail Sales +0.5% +0.6% -1.4% +0.7% +0.7% +0.8% +0.3% +0.2% -2.1% +0.3% +1.0% 0.3% + 1.5% CPI +0.6% +0.4 +0.1% +0.7% -0.1% -0.6% +0.2% +1.2% +0.5% +0.5% +0.1% - 0.01% + 0.5% Core CPI +0.3% +0.2 +0.1% +0.2% +0.1% +0.2% +0.2% +0.3% +0.1% +0.1% +0.1% + 0.01% Unchanged Housing Starts 1.85M 1.96M 2.12M 2.28M 1.933M 2.12M 2.02M 2.13M 2.04M 2.042M 2.045M + 0.02% Building Permits 1.98M 2.06M 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 138,000 200,000 225,000 170,000 140,000 305,000 44,000 -35,000 211,000 242,000 166,000 104,000(revised) 275,000 Durable Goods Orders +6.1% +3.4% -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 +18.0% -5.5% +2.9% -10.71% +12.9 +2.1% -1% +6% + 2.1% Existing Homes Sales 6.92 Millions 6.91 Millions 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) 55.2% 57.2% 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 1st Quarter 2006 4th Quarter 2005 3rd Quarter 2005 2nd Quarter 2005 1st Quarter 2005 4.8% 1.7% 4.3% 3.3% 3.8%(revised) 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 several major economic news. See the table above for all numbers. PPI came in 0.9% higher and core PPI was up 0.1%. CPI was up 0.6% and core CPI was up 0.3%. Housing starts were down about 5% and building permits were also down sharply. Core CPI higher than expected ignited a sell off on the market wednesday. It looks now that we are in a bear market. The market is now sharply down for 2 weeks in a row. Now it seems obvious with the last CPI reading that FED will continue to raise rates for one or two meeting. The crude is still under 70$. It continues to stay high but seems not being a concern. The prime is now at 5.00. Fed statement was that considering such a strong economy other rate hikes might be needed. Economic data will be watched closely as they come to help make decision. The SP500 PE ratio is at 17.72 according to december results. We can almost say that for march estimates we are at near 17.0 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 later in the fall for the coming year. Our last major bear market was on july 2002.