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 Short term recovery in motion All markets recover from deep oversold level. SP500 back inside the lower band but still oversold. ND100 barely back to the lower band and giving us a sell signal. DOW also recovered nicely and remains best of 3 markets. Short term recovery in motion 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 1280.16 -14.36 13.13 1 ND100 Sell May 26 2006 1606.37 1606.37 0 5.51 2 Dow Buy May 25 2006 11211 11279 68 135 1 SP500 Last Signal Comment Our lat buy signal is now 14 points behind. SP500 as expected recovered from a quite deep oversold level. It avoided a stop point (3% under the lower band the day buy signal was given). This stop point was at 1246. So we are still on this new buy signal. Tensions about inflation eased a bit with new economic numbers more and more showing economic slowdown. We are however not out of the bear market we entered in last week. We should be able to avoid a major bear market for now. The current short term up swing may continue for a few days but we have to expect a possible retest to the recent low of 1256 in the coming 2 weeks. So far our 1250 support is holding on well. 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 We just have a new sell signal on friday giving us a loss of 51 points(3.08%). ND100 remains the weakest of all markets. We came close to the 2% band trigger but ND100 recovered a little before that. ND100 may recover a little more in the next few days but we have to expect a retest to the recent low of 1569 in the coming weeks. This market remains oversold (RSI at 26). We reached the stop point in this market and had this new sell stop signal. This was the first losing trade in the past 2 years. 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 buy signal on May 25. We are now ahead 68 points with this buy signal. Dow had never been really weak and continues to stay in check. DOW is now above the lower band. DOW like other 2 markets recovered nicely on expected short term upswing. Like other markets this recovery could last a few more days but a retreat to the lower band is expected in the next 2 weeks. 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 4.20$ quite a recovery from last week. We will wait an extra week before exiting this position. After all with 3 weeks to go now before expiration we might be OK doing nothing. 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 a winning trade on GOLD on combined trades yielding 150$ profit. We had a break even trade with OIX. DOW is closed to be exited. Trades with Nasdaq are in bad shape and will be losers. Same with SMH. In the future we will remove OIX SMH and PPH since those markets have limited potential and carry too much risk. They will be replaced by RKH (Financial index) and XBD(Dealer brokers index) soon. See full instructions on options signals page for more details. HHH (Internet Index) will not be covered after all. 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 -4.8% +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 -1.1% +0.6% +4.2 -3.7% +2.6% +0.9%(revised) New Homes Sales -4.9% +18.0% -5.5% +2.9% -10.71% +12.9 +2.1% -1% +6% + 2.1% Existing Homes Sales 6.76 Millions 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 5.3% 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. Durable good orders were down 4.8%. New home sales were down almost 5%. Existing home sales were also down. Revised GDP for first quarter was up 5.3%. All those numbers were lower than expected and indicates economic slowdown. That helped to ease inflation fears after last week jump on CPI. Investors are now specualting that there might not be a rate hike at end of june. But I think it is too soon to specualte for now. The crude is back above 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 17.90 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.