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 the next number will be October 21th. Breakout above previous year high We had a surprised breakout on DOW and SP500 above their previous year high. It is the first time I see that in September. This breakout seems solid enough to stay. The negative divergences we had are gone and we now have a rising momentum which is good and we are now in the good period of the year without having an overvalued market. ND100 also went through 1660 and will challenge soon the 1700 level. Break out above previous year high Last trades update Index Market Last signal Entry date Entry Price Current Price Win / Loss 2 weeks Change # cycles completed SP500 Sell September 21 2006 1318.03 1349.59 -31.56 34.81 2 ND100 Sell September 21, 2006 1634.87 1684.88 -50.01 62.51 3 Dow Sell September 21 2006 11533 11850/td> -317 342 2 SP500 Last Signal Comment Our current sell signal is 32 points behind. SP500 had a breakout above 1325. It is quite a surprise considering that we are in september the most dangerous month of the year. This breakout looks sound especially if we look at the momentum which is climbing erasing all divergences that were present before. We might have a slight correction in the coming 5-10 days. We might take the opportunity to reverse the current position. We will have this week the beginnning of earning season. This could give us an idea of how bad the economic slowdown observed in the past months affected the profit. We had 2 cycles so far and remember that we always have at least 3 cycles per year. So we are missing 1 cycle and we will have the beginning of it somewhere in october. 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 current sell signal is 50 points behind for now. ND100 went easily over 1660. It is now in route to 1700 and possibly year high of 1760. We can now expect a small correction which should be followed by an attempt to go higher. Here as well all negative divergences disappered. We will take any short term correction to reverse the current position. We can consider that our first support is now at 1450, our next support at 1400 and the next one at 1320. DOW Last Signal Comment We are now 317 points behind on the current sell signal. DOW also had a solid breakout above 11650 and all divergences are gone leaving room to get higher. Like our 2 other markets we should see a short term correction where we will take the opportunity to reverse the current position. Our first support is now at 10650 and our next support is at 10200. Special Option Strategy Update We now enter our new postion for November selling a naked PUT on SPX 1220 at 1.40$. We are still way below the 2% band offset to protect ourselves. Always remember that you need between 11,000 and 15,000 USD margin for each contract. Short term Options Welcome to this new trading service. With this service we should have every month good opportunities. Click here to find the options trading signals page. We had 1 extra XAU(GOLD) trade last week yielding another 180$ profit. XAU remains close to be reentered again. All other markets are quite far to trigger a 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 September 2006 August 2006 July 2006 Juin 2006 May 2006 April 2006 Mars 2006 February 2006 January 2006 December 2005 November 2005 October 2005 September 2005 PPI +0.1% +0.1% +0.5% +0.2% +0.9% +0.5% -1.4% +0.3% +0.6% -0.7% +0.7% +1.9% Core PPI -04.% -0.3% +0.2% +0.3 +0.1% +0.1 +0.3% +0.4% +0.1%- +0.1% -0.3% Retail Sales +0.2% +1.4 -0.4% +0.1 +0.8% +0.6% -1.4% +0.7% +0.7% +0.8% +0.3% +0.2% CPI +0.2% +0.4% +0.2% +0.4% +0.6% +0.4 +0.1% +0.7% -0.1% -0.6% +0.2% +1.2% Core CPI +0.2% +0.2% +0.3% +0.3% +0.3% +0.2 +0.1% +0.2% +0.1% +0.2% +0.2% +0.3% Housing Starts 1.67M 1.795M 1.85M 1.953M 1.863M 1.96M 2.12M 2.28M 1.933M 2.12M 2.02M 2.13M Building Permits 1.72M 1.747M 1.869M 1.946M 1.98M 2.06M 2.15M 2.22M 2.08M 2.16M 2.10M 2.22M Employment 51,000 188,000 121,000 124,000 92,000 126,000 200,000 225,000 170,000 140,000 305,000 44,000 -35,000 Durable Goods Orders -0.50% -2.4% +3.1% -0.3% -4.7% +6.1% +3.4% -10.2% +2.5% +3.3% +3.0% Durable Goods Excluding Transportation +0.5% +1.0% +0.7% -1.1% +0.6% New Homes Sales -3.0% -4.5% -3.0% +4.6% -4.9% +18.0% -5.5% +2.9% -10.71% Existing Homes Sales 6.30 Millions 6.33 Millions 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 ISM Index(Manufacturing) 52.9 54.5 54.7 53.8 54.4 58.9 55.2% 57.2% 54.8% 55.6% 56.6% 59.1% ISM Services 57 54.8 57.7 60.1 63.0 56.8% 61.0% 58.9% 60.0% Factory Orders -0.6% +1.2% +0.7% -4.5% +1.1% +2.2% GDP(Gross Domestic Product) Numbers 2nd Quarter 2006 1st Quarter 2006 4th Quarter 2005 3rd Quarter 2005 2nd Quarter 2005 1st Quarter 2005 2.6% 5.6% 1.7% 4.3% 3.3% 3.8%(revised) Inflation Numbers Year to year inflation according to core CPI is now at 2.7% In the last 2 weeks we had several major economic news. See the table above for all numbers. Existing home sales for august were down to 1,050,000 millions down again from previous month. New home sales were down to 6.30 Millions from previous month. Durable good orders came in at -0.50% lower than expected. ISM manufacturing came in at 52.9 the lowest number in 6 months. Employment for september was only 56,000 however the august number was revised up to 188,000. The GDP for second quarter was revised down to 2.6%. All numbers above continue to show growth decelaration. We still face a much serious economic slow down than expected. Sure the inflation numbers are good and investors are betting on when rates will start to go down which is pushing the market up. The crude is still around 60$ giving a small boost to the market. It is a lot lower now in the past 3 weeks and helping stock market. It might be short lived however just like last year. The prime is still at 5.25. With latest readings on inflation numbers and real estate market rate hikes are over. With latest economic data we can start to say that rated decreases might be closer than we think. The SP500 PE ratio is at 18.07 according to june results. We can almost say that for spetember estimates we are at about 17.75 which is still considered low but less comfortable then earlier in the year. 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.