INDEX TRADING WEEKLY UPDATE

SP500 is now retesting january low of 1270 and is holding up well in a persisting double bottom pattern. DOW is in the same pattern as SP500 but in a better shape. ND100 is testing again the january low of 1740 and seems ready to start a new cycle.

First level support holding up

Last trades update

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First level support holding up

Index Market	Current Price	2 weeks Change	# cycles completed
SP500	1288.14	-42.49	0
ND100	1713.83	-31.56	0
Dow	11951	-315	0

SP500 Last Comment

SP500 is now retesting january low of 1270 and is holding up quite well despite all bad economic news and also bad news from financial sector. SP500 remains in a double bottom pattern and is quite oversold with an RSI at 31. So a turnaround can happen anytime soon since we did not have any up cycle so far and we know that this is a rule that we always have at least 3 significants up cycle very year. 1270 remains a very important support since it was the bear market intraday lowest point.

1270 is our first support 1220 is our next support.

ND100 is in the same pattern as SP500. It is a bit below it's first support of 1740 but remains in a double bottom pattern as well and shows a lot of positive divergences. It is inside the lower band with an RSI of 38. It looks like ready to rebound anytime now.

We can consider that our first support is now at 1710, our next support at 1450.

DOW had the same pattern as SP500 testing january low as well. DOW is in a better shape than SP500 since it is less exposed to financial sector than SP500. It is now near the lower band in a persisting double bottom pattern with an RSI at 33 quite oversold. DOW did not have any up cycle this year and is now in a position to start one anytime soon.

Our first support is now at 12000 and our next support is at 10800.

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Date	Market	Trade Type	Description	Symbol	Strike Price	Month	Margin	Amount	Current	Profit
2008/03/24	SPX	PUT Uncovered	Sell PUT uncovered February SPX	SXY		April	14000	850$	1250$	-400$
2008/03/24	RUT	PUT Uncovered	Sell PUT RUT February	RUT		March	7000	450$	650$	-200$

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

February 2008

January 2008

December 2007

November 2007

October 2007

September 2007

August 2007

July 2007

June 2007

May 2007

April 2007

March 2007

PPI

+1.0%

-01.%

+3.2%

+0.1%

+1.1%

-1.4%

+0.6%

-0.2%

+0.9%

+0.7%

+1.0%

Core PPI

+0.4%

+0.2%

+0.4%

+0.0%

+0.1%

+0.2%

+0.1%

+0.3%

+0.2%

0.0%

0.0%

Retail Sales

-0.6%

+0.4%

-0.4%

+1.2%

+0.2%

+0.6%

+0.3%

+0.5%

-0.9%

+1.5%

-0.2%

+1.0%

CPI

+0.0%

+0.4%

+0.3%

+0.8%

+0.3%

+0.3%

-0.1%

+0.1%

+0.2%

+0.7%

+0.4%

+0.6%

Core CPI

+0.0%

+0.3%

+0.2%

+0.3%

+0.2%

+0.2%

+0.2%

+0.2%

+0.2%

+0.1%

+0.2%

+0.4%

Housing Starts

1.012M

1.004M

1.173M

1.232M

1.193M

1.33M

1.367M

1.47M

1.474M

1.506M

1.491M

Building Permits

1.048M

1.080M

1.152M

1.170M

1.126M

1.326M

1.389M

1.41M

1.501M

1.429M

1.56(M

Employment

-63,000

-22,000

+82,000

+135,000

+170,000

+96,000

89,000

+68,000

132,000

+190,000

+88,000

+177,000

Durable Goods Orders

-5.3%

+4.4%

+0.5%

-0.4%

-1.7%

-5.3%

+6.1%

+1.9%

-2.8%

+1.1%

+3.4%

New Homes Sales

-2.81%

-4.7%

-9.00%

+1.68%

-4.8%

-8.0%

+3.7%

-6.5%

-1.61%

+16.2%

Existing Homes Sales

4.89 Millions

4.91 Millions

5.00 MIllions

4.98 Millions

5.04 Millions

5.48 Millions

5.75 Millions

5.76 Millions

5.99 Millions

6.01 Millions

6.15 Millions

ISM Index(Manufacturing)

48.3

50.7

48.4

50.8

50.9

52.0

52.9

53.8

56.0

55.0

54.7

50.9

ISM Services

49.3

44.6

53.9

54.1

55.8

54.8

55.8

55.8

60.7

59.7

56.0

52.4

Factory Orders

-2.5%

+2.3%

+1.5%

+0.7%

+0.30%

-3.5%

+3.4%

+1.0%

-0.5%

+0.5%

+3.1%

GDP(Gross Domestic Product) Numbers

4th Quarter 2007	3rd Quarter 2007	2nd Quarter 2007	1st Quarter 2007	4th Quarter 2006	3rd Quarter 2006	2nd Quarter 2006	1st Quarter 2006	4th Quarter 2005	3rd Quarter 2005
+0.6%	+4.9%	+3.8%	+0.7%	2.5%	2.0%	2.6%	5.6%	1.7%	4.3%

Inflation Numbers

Year to year inflation according to core CPI is now at 2.5% and CPI at 4.5%.

In the last 2 weeks we had several major economic news. See the table above for all numbers.

For february CPI was unchanged as well as core CPI better than expected. ISM manufacturing came in at 48.3 better than expected but indicating contraction. ISM services came in at 49.3 better than expected but indicating contraction. Employment was down 63,000 worse than expected. Retail sales was down 0.6% worse than expected. Factory orders for january was down 2.5% worse than expected.

Economic slowdown is now a reality despite a few good surprises. The way numbers are coming in we should not be surprised to see a negative GDP for first quarter. The FED may have some room to breathe with the latest inflation numbers but it could be short lived.

The SP500 PE ratio is at 16.31 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 in the middle of the range (16-20).