INDEX TRADING WEEKLY UPDATE

SP500 after reaching the high end of it's trading range(1380) is now setting back quite hard to the moving average after coming above the upper band. DOW touched upper band and retreating hard to the moving average. ND100 also went above upper band and is having strong set back to the moving average.

First quarter blues

Last trades update

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First quarter blues

Index Market	Current Price	2 weeks Change	# cycles completed
SP500	1332.83	+17.61	0
ND100	1798.72	+31.15	0
Dow	12325	+109	0

SP500 Last Comment

SP500 continued it's up cycle above the upper band and reaching the high end of it's trading range(1380). It then had a strong set back to 1335 last friday right at the moving average. Financial results for 1st quarter so far are worst than expected which is driving the market down. Several new results will hit the market in the next 2 weeks and we expect the worst. If it continues we might see other selloffs that could bring SP500 to at least the lower band (1300) or even lower to retest current support at 1270. If it does not we will resume the current up cycle and retest last high of 1380 which I doubt. Current RSI is at 43 not oversold enough to spark a short term rally. So for sure we can expect strong movement in both directions in the coming 2 weeks. 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 continued it's up cycle going above the upper band in the overbought territory and then had a quite strong set back to the moving average this past week. Uptrend pattern is still present and a short term recovery remains possible. However as we know by now 1st quarter financial results came in worst than expected and we must be prepared to see ND100 touch the lower band at 1720 if results from next 2 weeks continue to be bad. If not we might then see the current up cycle to resume upward.

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

DOW is in the same situation as SP500 and is now at the moving average after setting back hard. DOW is now in the middle of it's trading and is right at the moving average. If 1st quarter results for next 2 weeks continue to be bad we might see the set back to continue as low as 12000(low end of trading range). If we get some good surprises we might see the current uptrend to resume which I doubt. RSI is at 41 not oversold enough to hope for an immediate upswing.

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
2008/04/09	SPX	PUT Uncovered	Sell PUT uncovered June SPX	SPT		June	12000	430$	600$	-170$
2008/04/09	RUT	PUT Uncovered	Sell PUT RUT June	RUT		June	7000	275$	400$	-125$

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

March 2008

February 2008

January 2008

December 2007

November 2007

October 2007

September 2007

August 2007

July 2007

June 2007

May 2007

April 2007

PPI

+0.3%

+1.0%

-01.%

+3.2%

+0.1%

+1.1%

-1.4%

+0.6%

-0.2%

+0.9%

+0.7%

Core PPI

+0.5%

+0.4%

+0.2%

+0.4%

+0.0%

+0.1%

+0.2%

+0.1%

+0.3%

+0.2%

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%

CPI

+0.0%

+0.4%

+0.3%

+0.8%

+0.3%

+0.3%

-0.1%

+0.1%

+0.2%

+0.7%

+0.4%

Core CPI

+0.0%

+0.3%

+0.2%

+0.3%

+0.2%

+0.2%

+0.2%

+0.2%

+0.2%

+0.1%

+0.2%

Housing Starts

1.065M

1.012M

1.004M

1.173M

1.232M

1.193M

1.33M

1.367M

1.47M

1.474M

1.506M

Building Permits

0.978M

1.048M

1.080M

1.152M

1.170M

1.126M

1.326M

1.389M

1.41M

1.501M

1.429M

Employment

-80,000

-63,000

-22,000

+82,000

+135,000

+170,000

+96,000

89,000

+68,000

132,000

+190,000

+88,000

Durable Goods Orders

-1.7%

-4.7%

+4.4%

+0.5%

-0.4%

-1.7%

-5.3%

+6.1%

+1.9%

-2.8%

+1.1%

New Homes Sales

-1.83%

-2.81%

-4.7%

-9.00%

+1.68%

-4.8%

-8.0%

+3.7%

-6.5%

-1.61%

Existing Homes Sales

5.03 Millions

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

ISM Index(Manufacturing)

48.6

48.3

50.7

48.4

50.8

50.9

52.0

52.9

53.8

56.0

55.0

54.7

ISM Services

49.6

49.3

44.6

53.9

54.1

55.8

54.8

55.8

55.8

60.7

59.7

56.0

Factory Orders

-1.3%

-2.3%

+2.3%

+1.5%

+0.7%

+0.30%

-3.5%

+3.4%

+1.0%

-0.5%

+0.5%

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 factory orders were down 1.3% lower than expected. For march Employment was down 80,000 far worst than expected. ISM manufacturing came in at 48.6 better than expected but below 50 for 3 months in a row. ISM services came in at 49.6 better than expected but below 50 for 3 months in a row.

Economic slowdown is now a reality with those last economic numbers. Employment is negative for the last 3 months, factory orders are down for the last 2 months and ISM manuf and services are below 50 for last 3 months indicating contraction ib those 2 sectors. The way numbers are coming in we will get negative GDP for first quarter. The FED will have to stop lowering rates soon or will have to face inflation for real. So for mid term it does not look well for stock market.

The SP500 PE ratio is at 16.93 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).