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 March 17th. Please note also that the trading signals service will be completely revamped towards the end of march. It will replace the current options signals page. It will be oriented towards portfolio management examples. This is based on regular monthly revenu. In fact you will see my own real trades plus other possibilities to generate 15-20% growth every year no matter where the market is haeding. More soon. Rebound insight All markets had a bad week because of problems in China would you believe. We are now oversold (RSI way under 30) for all markets. A short term rebound is in sight but it will be very short term. SP500 and DOW are not too far to reach the 2% band offset which would trigger a strong and brief upswing. It would be at 1360 for SP500 and declining 2-3 points a day. So stay tuned for any change. Rebound in sight Last trades update Index Market Current Price 2 weeks Change # cycles completed SP500 1387.17 -68.37 0 ND100 1726.03 -95.4 0 Dow 12114 -653 0 SP500 Last Comment SP500 had a bad week and lost near 5% because of problems in China despite the fact that US economy remains solid. I guess it was overdue to get a correction. SP500 is oversold with a 27 RSI reading. It is 25 points away to reach the 2% band offset which would trigger a sharp and short term upswing. But I believe we will have a short term rebound before we see that next week. For sure the party is over and at best we will get into a sideways market. I would be surprised to see a full fledged bear market right after a long uptrend that brought a 20% increase from last july low. In the past after all long market advance we went into sideways markets for a minimum of 3 months before any major weaknesses. So don't panic and be patient. 1325 is now our first support. 1220 is our next support. 1170-1180 support level is our third support level. ND100 Last Signal Comment ND100 could not pass over it's recent head and shoulder pattern and double top at the same time and sank like other markets. However it is a lot less oversold and near the lower band. Actually it shows here a buy signal. For sure it is not a safe one but still. This market will follow what we have said for SP500 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 DOW like SP500 retreated a good 5% last week and now have a band offset of 1.33. It is the market the most oversold. Remember that if we reach a 2% band offset we have a golden opportunity. This level is 11914 and declining 30 points per day. This market in fact is on a buy signal right now but this is not the safest signal of all. We can expect a short term rebound this week which would be followed by another downswing. So stay tuned for any change in this market. Our first support is now at 10650 and our next support is at 10200. Special Option Strategy Update Our new SPX March PUT 1365 sold at 1.10$ is widely in trouble. We are still 23 points under the current level with 2 weeks expiration. So we might face for the first time in 4 years a loss. However since we expect a short term rebound we will stay calm and wait for that to occur. When it does we might decide to exit at a loss and wait for a set back and rolloer to april at a much lower strike price and better premium. Same comment apply to those with OEX 630 and spreads with SPX or OEX. Always remember that you need between 12,000 and 15,000 USD margin for each contract. Click here to find the options trading signals page. Economic Current Conditions Table of Economic Numbers Economic Info January 2007 December 2006 November 2006 October 2006 September 2006 August 2006 July 2006 Juin 2006 May 2006 April 2006 Mars 2006 February 2006 PPI -0.6% +0.9% +2.0% -1.6% -1.3% +0.1% +0.1% +0.5% +0.2% +0.9% +0.5% -1.4% +0.3% Core PPI +0.2% +0.2% +1.3% -0.9% +0.6% -04.% -0.3% +0.2% +0.3 +0.1% +0.1 +0.3% Retail Sales 0.0% +0.9% +0.6% +0.1% -0.8% +0.2% +1.4 -0.4% +0.1 +0.8% +0.6% -1.4% +0.7% CPI +0.2% +0.5% 0.0% -0.5% -0.5% +0.2% +0.4% +0.2% +0.4% +0.6% +0.4 +0.1% +0.7% Core CPI +0.3% +0.2% 0.0% +0.1% +0.2% +0.2% +0.2% +0.3% +0.3% +0.3% +0.2 +0.1% +0.2% Housing Starts 1.41M 1.64M 1.57M 1.486M 1.74M 1.67M 1.795M 1.85M 1.953M 1.863M 1.96M 2.12M 2.28M Building Permits 1.568M 1.60M 1.51M 1.535M 1.638M 1.72M 1.747M 1.869M 1.946M 1.98M 2.06M 2.15M 2.22M Employment +111,000 +206,000 +132,000 +79,000 148,000 188,000 121,000 124,000 92,000 126,000 200,000 225,000 170,000 Durable Goods Orders -7.8% +1.9% -8.3% +7.8% -0.50% -2.4% +3.1% -0.3% -4.7% +6.1% +3.4% Durable Goods Excluding Transportation -3.1% -1.1% -1.7% +0.1% +0.5% +1.0% +0.7% -1.1% New Homes Sales -6.6% +12% +3.9% -4.0% +5.3% -3.0% -4.5% -3.0% +4.6% -4.9% +18.0% Existing Homes Sales 6.46 Millions 6.22 Millions 6.28 Millions 6.24 Millions 6.21 Millions 6.30 Millions 6.33 Millions 6.62 Millions 6.67 Millions 6.75 Millions 6.92 Millions 6.91 Millions ISM Index(Manufacturing) 49.3 51.4 49.5 51.2 52.9 54.5 54.7 53.8 54.4 58.9 55.2% 57.2% ISM Services 59.0 56.7 58.9 57.1 52.9 57 54.8 57.7 60.1 63.0 56.8% Factory Orders +2.4% +0.9 -4.5% -1.7% -0.6% +1.2% +0.7% GDP(Gross Domestic Product) Numbers 4th Quarter 2006 3rd Quarter 2006 2nd Quarter 2006 1st Quarter 2006 4th Quarter 2005 3rd Quarter 2005 2.2% 2.0% 2.6% 5.6% 1.7% 4.3% 3.3% 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. PPI and CPI came in at quite expected numbers for january relieving pressure on inflation. Real estate markets continue to show weaknesses and durable good orders were sharply down reviving economic slowdown pressure. However always remembe rthat manufacturing activity count for only 20% of GDP. All numbers show some equilibrium in the economy and it seems like for the first time in history a soft landing was successfull. FED will be forced to keep rates the way they are for quite a while. The crude is now back above 60$ because of the recent cold period. It is not too good for the market. The prime is still at 5.25. With latest readings on CPI and PPI we can start to say that rates decrease might be for last quarter 2007. The SP500 PE ratio is at 17.65 according to september results. Remember that when the last major economic cycle that started in march 2003 the PE ratio was at around 16. So we are stay in the middle. Despite the fact the PE is not too high we will have to watch for a possible bear market in march april 2007. Our last major bear market was on july 2002.