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 Please note that starting next month(August 2006) this newsletter will be sent twice a month. The next number will be August 12th. New cycle started All markets had strong rebound this week. The new cycle we were forecasting for some weeks is now reality. We are now facing temporary resistance at 1280 for SP500 and 11210 for DOW. Nasdaq continues it's rebound and may have found a bottom at 1450. All sectors except the ones related to tech are quite strong. SP500 near upper band and facing resistance at 1280. In fact SP500 is now stuck in 1220-1280 trading range. ND100 finally rebounded strong after being highly oversold. It is still oversold. DOW is now at the upper band challenging a resistance at 11210 which is the higher end of trading range 10650-11210. New cycle started 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 1278.55 38.42 38.26 1 ND100 Buy June 1 2006 1616.57 1510.30 -106.27 58.42 2 Dow Buy July 11 2006 11134 11220 84 336 1 SP500 Last Signal Comment Our last buy signal is now 38 points ahead. SP500 finally responded to positive divergences and is now in a new cycle, our second of the year which was long overdue. SP500 is now facing resistance at 1280 the top of the 1220-1280 trading range. I do believe it will be broken soon. SP500 despite it's strong rebound is not overbought and still have room to go higher. I don't expect this cycle to be extraordinary but let's see what happen. We are now in a sideways market pattern. It is still possible to 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 106 points behind. ND100 responded to a very high oversold level to rebound 58 points this week. We will let this market run for the coming weeks and may be our estimated loss will turn in a small profit. We can expect in the coming weeks to see a slow recovery in this market which could lead us near 1600 over the 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 ahead 84 points with this buy signal. This was a very bad call but we are now in the profit zone. DOW had a good rebound all week long and is now at the upper band facing 11210 resistance level. DOW is not overbought and should break this resistance in the next 2 weeks. We now have good support at 10700 and we are in transition to go to a sideways pattern. In fact this is the same pattern as the SP500. I am still confident that we will see a challenge to new high in the coming 4-6 weeks. 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 0.95$. Nice recovery. We will be OK with 3 weeks before expiration. Always remember that you need between 11,000 and 15,000 USD margin for each contract. Short term Options Welcome to this new trading service. With this service we should have every month good opportunities. Click here to find the options trading signals page. We closed 1 trade this week QQQQ made a 40$ profit easily. Since all markets recovered strongly this week we are not closed to any new entry. 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 +0.5% +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 +0.2% +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 +0.2% +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% +0.3% +0.2 +0.1% +0.2% +0.1% +0.2% +0.2% +0.3% +0.1% +0.1% +0.1% Housing Starts 1.85M 1.953M 1.863M 1.96M 2.12M 2.28M 1.933M 2.12M 2.02M 2.13M 2.04M 2.042M 2.045M Building Permits 1.862M 1.946M 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 +3.1% -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 +1.0% +0.7% -1.1% +0.6% +4.2 -3.7% New Homes Sales -3.0% +4.6% -4.9% +18.0% -5.5% +2.9% -10.71% +12.9 +2.1% -1% Existing Homes Sales 6.62 Millions 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 2nd Quarter 2006 1st Quarter 2006 4th Quarter 2005 3rd Quarter 2005 2nd Quarter 2005 1st Quarter 2005 2.5% 5.6% 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. Existing home sales and new home sales continue to decline. Durable good orders were up 3% a bit higher than expected. The housing numbers continue to slow down. Again those numbers tends to say we are slipping into economic slowdown despite higher inflation. GDP for second quarter was at +2.5% lower than expected. Investors are now expecting that we are done with rate hikes The crude is now under 74$. It is starting to be a concern for economic growth now. The prime is now at 5.25. Fed said this week that economic slowdown should be reflected soon in inflation numbers which tend to say that rate hikes are near the end. They will continue to look at economic data to make their decisions. The SP500 PE ratio is at 17.88 according to march results. We can almost say that for june estimates we are at about 17.25 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.