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 finding support All markets trying to find support after sharp fall. SP500 now above moving average after bad day on tuesday. ND100 reversing last sell signal to a buy. DOW remains solid and establishing support around 11200. Markets finding support 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 1288.22 -6.28 8.06 1 ND100 Buy June 1 2006 1616.57 1612.90 -3.66 6.65 2 Dow Buy May 25 2006 11211 11248 37 -31 1 SP500 Last Signal Comment Our lat buy signal is now 6 points behind. SP500 sanked hard tuesday but recovered nicely for the rest of the week. Tensions about inflation continue to ease with other economic numbers showing definite economic slowdown (more on this later). SP500 seems to find support at around 1260. If it holds 2 more weeks then 1255 would be the next support. We should be able to avoid a major bear market for now considering a possible stop on rate hikes end of june. We will now see a lot of back and forth moves in the coming weeks before we can see a possible advance above 1300. Time will tell. 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 buy signal on thursday after a very brief sell signal at a a small loss of 11 points. ND100 is now trying to find support at around 1560. ND100 remains weak however and some back and forth moves are expected here as well. A possible retest to the recent low of 1569 remains possible in the coming weeks but less and less probable. 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 37 points with this buy signal. Dow had never been really weak and continues to stay in check. DOW is now trying to establish support at 11200. We can expect here as well a lot of back and forth moves for some time. 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 2.10$ quite a recovery from last week. We will hold on to this position. After all with 2 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 no action at all this past week. DOW is still 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. 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 May 2006 April 2006 Mars 2006 February 2006 January 2006 December 2005 November 2005 October 2005 September 2005 August 2005 July 2005 June 2005 May 2005 PPI +0.9% +0.5% -1.4% +0.3% +0.6% -0.7% +0.7% +1.9% +0.6% +1.0% Unchanged Core PPI +0.1% +0.1 +0.3% +0.4% +0.1%- +0.1% -0.3% +0.3% +0.2% +0.4% +0.1% 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% 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% 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% 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 Employment 75,000 126,000 200,000 225,000 170,000 140,000 305,000 44,000 -35,000 211,000 242,000 166,000 104,000(revised) 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% Durable Goods Excluding Transportation -1.1% +0.6% +4.2 -3.7% +2.6% New Homes Sales -4.9% +18.0% -5.5% +2.9% -10.71% +12.9 +2.1% -1% +6% 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) 54.4 58.9 55.2% 57.2% 54.8% 55.6% 56.6% 59.1% 59.4% 53.6% 56.6% 53.8% 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% 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 2 major economic news. See the table above for all numbers. Employment for may came in at 75,000 much lower than expected. ISM manufacturing activity came in at 54.4 a lot lower than previous month and lower than expected. Economic slowdown is now a reality as shown by several other economic numbers. Fed past 2 years actions seems to take effect now. 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 still 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. Last economic data realesed in the past 2 weeks seems to show a possible pause in rate hikes in june. The SP500 PE ratio is at 18.02 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.