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 retesting last month low All markets are retesting last month low. SP500 and DOW in a double bottom situation with positive divergence. Nothing favors a rebound in the market. We have geopolitical problems in middle east, very high crude prices, Fear of lower financial results for second quarter and still inflation concerns. Nobody can see how the market can rebound. It is even possible we may get lower. However markets rebound always occur in this kind of sentiment conditions. It may not be for now but for sure we will have a great last quarter. We are in a 10th week of down market conditions. I have seen since 1987 between 8 and 14 weeks of down market conditions. The longest one was in 2002. I believe we are near the end since we had only 1 cycle so far and a new one will start in the next 2 weeks. So be patient. SP500 back to lower band near last month bottom of 1220. ND100 went through 1530 support and 1490 support as well. It is highly oversold. DOW back to lower band as well and retesting last month low. Markets retesting last month low Last trades update Index Market Last signal Entry date Entry Price Current Price Win / Loss Weekly Change # cycles completed SP500 Buy June 19th 2006 1240.13 1236.20 -3.93 -29.28 1 ND100 Buy June 1 2006 1616.57 1462.17 -154.4 -71.54 2 Dow Buy July 11 2006 11134 10739 -398 -351.32 1 SP500 Last Signal Comment Our last buy signal is now behind 4 points now. SP500 could not continue it's upswing and retreated to the lower band. We are now near retesting last month 1220 low with however a very nice positive divergence. This market is now in a double bottom situation. We all know that very few positives events favor a rebound in the market. However a double bottom like this one usually have a 85% success rate in the past. So let's see what happen. Our current downtrend remains. This is the 10th week since this down market started. So far we had only 1 cycle and we are near mid july. A new cycle is in the works and should start in the next 2 weeks (See comments above). We might see in the coming 4-6 weeks a challenge to the last year high of 1325. 1220 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 154 points behind. ND100 had a real bad week going through 1530 and 1490 support in the same week. We are now quite oversold in this market. We reached the stop trigger point so we will exit this market as soon as it operates a short term rebound. It will be a big loss this time but the next 2 cycles could also be very strong gains. This was the 10th week of downtrend. I continue to believe we will finally have a good summer rally in the coming 4-6 weeks. This market is hit quite hard this year which means we could have a very strong fall season with this market. We can consider that our first support is now at 1400, our next support at 1320. DOW Last Signal Comment We had a new buy signal on July 11. We are already behind 398 points with this buy signal. This was a very bad call so far. DOW retreated immediately to the lower band and even lower. As with SP500 we are now retesting last month low with very solid positive divergences and we are facing an interesting double bottom. In fact this is the same pattern as the SP500. I am confident that we will see a challenge to new high in the coming 4-6 weeks. We might have 1 or 2 weeks or difficult market conditions before, Our first support is now at 10650 and our next support is at 10200. Special Option Strategy Update Our August 1170 PUT sold at 2.90$ now worth 7.30$. It could be in trouble if market falls deeper. However we will have some market rebound before and we might decide to buy back on such rebound and reposition thereafter. So stay tuned for any change with this. Always remember that you need between 11,000 and 15,000 USD margin for each contract. Short term Options 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. Several trades are in motion right now. SPX DOW and QQQ are all in. QQQ is in escalation level already. We will lose on the first trade with escalation trade just got in friday. SPX just got in also friday. DOW is near escalation as well. BBH is near getting a new signal. RKH is not so far either but this market had a good behavior all week long. We now have new target numbers for all our covered markets. 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 Juin 2006 May 2006 April 2006 Mars 2006 February 2006 January 2006 December 2005 November 2005 October 2005 September 2005 August 2005 July 2005 June 2005 PPI +0.2 +0.9% +0.5% -1.4% +0.3% +0.6% -0.7% +0.7% +1.9% +0.6% +1.0% Unchanged Core PPI +0.3 +0.1% +0.1 +0.3% +0.4% +0.1%- +0.1% -0.3% +0.3% +0.2% +0.4% Retail Sales -0.1% +0.1 +0.8% +0.6% -1.4% +0.7% +0.7% +0.8% +0.3% +0.2% -2.1% +0.3% +1.0% CPI +0.4% +0.6% +0.4 +0.1% +0.7% -0.1% -0.6% +0.2% +1.2% +0.5% +0.5% +0.1% Core CPI +0.3% +0.3% +0.2 +0.1% +0.2% +0.1% +0.2% +0.2% +0.3% +0.1% +0.1% +0.1% Housing Starts 1.957M 1.863M 1.96M 2.12M 2.28M 1.933M 2.12M 2.02M 2.13M 2.04M 2.042M 2.045M Building Permits 1.932M 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 Employment 121,000 92,000 126,000 200,000 225,000 170,000 140,000 305,000 44,000 -35,000 211,000 242,000 166,000 Durable Goods Orders -0.3% -4.7% +6.1% +3.4% -10.2% +2.5% +3.3% +3.0% -2.1% +3.8 -5.3% Durable Goods Excluding Transportation +0.7% -1.1% +0.6% +4.2 -3.7% New Homes Sales +4.6% -4.9% +18.0% -5.5% +2.9% -10.71% +12.9 +2.1% -1% Existing Homes Sales 6.67 Millions 6.75 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 ISM Index(Manufacturing) 53.8 54.4 58.9 55.2% 57.2% 54.8% 55.6% 56.6% 59.1% 59.4% 53.6% 56.6% ISM Services 60.1 63.0 56.8% 61.0% 58.9% 60.0% 53.3% 65.0% 60.5% Factory Orders +0.7% -4.5% +1.1% +2.2% -1.7% +2.5% -1.9% 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 1 major economic news. See the table above for all numbers. Retail sales for june were down 0.1% lower than expected. Again those numbers tends to say we are slipping into economic slowdown despite higher inflation. The crude is now near 80$. It is starting to be a concern for economic growth now. The prime is now at 5.25. Fed statement was almost the same not knowing when they can stop rate hiking. They will continue to look at economic data to make their decisions. The SP500 PE ratio is at 17.29 according to march results. We can almost say that for june estimates we are at under 17 which is still considered very 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.