April 26, 2008
INDEX TRADING WEEKLY UPDATE
April 25th 2008 Issue # 105
Written By Richard Bastien
Author of Index Trading System
© copywright besttradingsystems.com
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Please note that the next number will be May 10th 2008. This is based on regular monthly revenu. In fact you will see my own real trades plus other possibilities to generate 20 - 25% growth every year no matter where the market is heading. More soon.
First divergences appearing |
SP500 resumed uptrend and now near 1400 above the upper band. SP500 shows first negative divergences in a 28 days old cycle. DOW also resumed uptrend and now above the upper band and showing negative divergences. ND100 continued it's uptrend and is showing more important negative divergences. Last trades update
SP500 Last Comment SP500 resumed uptrend after flirting with the moving average. SP500 is now above the upper band and near 1400 which ties the high from january recovery. It is some kind of double top. We notice first negative divergences despite a solid mid term uptrend which means we must start to be carefull. Financial results for 1st quarter were after all inline with expectations which was a 15% decrease in profit. Financial sectors continue to be in trouble but nobody seems to care from now on. All other sectors are quite solid. Several. Current RSI is now at 58 not far to be overbought. Our current upcycle is 28 days old. We can expect at least temporary resistance at 1400 and a possible brief set back in the coming week. If more negative divergences continue to build with a new high above 1400 we will have to worry. 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 Last Signal Comment ND100 continued it's up cycle still at upper band level. We can observe more important negative divergences with this market. I don't think this is the end of this uptrend but we can expect brief set backs before we see other attempts to new cycle high. If on the next significant high in this cycle we observe more negative divergences we will have to worry and start thinking taking profits. We can consider that our first support is now at 1710, our next support at 1450.
DOW Last Signal Comment DOW is in the same situation as SP500 and is now above the upper band. DOW is attempting to get above the current trading range. We observe as for SP500 first negative divergences in this current up cycle. It does not mean this is the end of the cycle but we must start to be more cautious. RSI is at 61 not far from overbought level. So we can expect brief set backs followed by new high attempt. If we observe more negative divergences on the next high attempt we will have to be veru cautious. Our first support is now at 12000 and our next support is at 10800. 
Special Option Strategy Update Please note that the email service to signal new trades update will be now available to subscribers only. The service is no longer free. It yielded so far 27% in 14 months. So Order now Our June trades are near profit taking. It may occur as soon as next week. We may then wait a while and hope for a market set back to reenter. You now need to subscribe to our trading service to see the specifications. All our portfolio shows a 22% plus value since beginning of march so far.
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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
GDP(Gross Domestic Product) Numbers
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 march PPI was up 1.1% and core PPI was up 0.3% above expectations. CPI was up 0.3% and core CPI was up 0.2% inline with expectations. Housing starts were down sharply as well as building permits worse than expected. Existing home sales and new home sales were also down sharply (see table above) and worse than expected. Durable good orders were down 0.3% a bit better than expected and retail sales was up 0.2% better than expected. Economic slowdown continue to be a reality with those last economic numbers. Inflation numbers are contained so far but are ready to explode if the dollar remains weak. Real estate markets continue to register new lows and the fall seems endless. Retail sales is still up which is a relief. 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 17.75 according to September results. It is probably higher as for december 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). |
This is it for this week and continue to monitor any signal change on the
Index Trading Signals page
Richard Bastien