June 21, 2008
INDEX TRADING WEEKLY UPDATE
June 20th 2008 Issue # 109
Written By Richard Bastien
Author of Index Trading System
© copywright besttradingsystems.com
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Please note that the next number will be July 5th 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.
Downtrend continues |
SP500 continues in it's downtrend pattern to hit an oversold level with RSI at 31. We now have a slow downtrend now lasting for 5 weeks. DOW is also in a downtrend even more persistant than SP500 now lasting for 5 weeks and is near first level support of 11700 established last march. ND100 remains the strongest of all markets and is now at the lower band but in much better shape then SP500 and DOW with RSI at 42. Last trades update
SP500 Last Comment SP500 contibues in a slow downtrend for 5 weeks now. It is quite oversold with RSI at 31. We can now expect SP500 to rebound next week on a short term basis however. In the 3 weeks to come we might see a retest of first level support at 1270. It should take another 3 weeks before we see this downtrend resolved. So far this year we had only one up cycle in 6 months. So we are overdue to get a new upcycle in about 3 weeks from now. 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 remains the strongest markets of all. However it is now near the lower band and all negative divergences observed eralier finally took it lower. RSI is at 41 much stronger then SP500 and DOW. ND100 might get into a trading range for 2-3 weeks and may not collapse like SP500 and DOW and hold the rest of the market. We can consider that our first support is now at 1710, our next support at 1450.
DOW Last Signal Comment DOW is in a slow downtrend for now 5 weeks and is the weakest of our 3 markets. RSI reading is at 31 very oversold and a short term rebound is expected next week. DOW is near retesting it's first level support of 11700 established last march where we should see a stronger short term recovery. We amy have another 3 weeks left in this downtrend pattern before we see a reversal and start a new upcycle. We had only 1 upcycle this year and I believe we are 3 weeks close to start a new one. Our first support is now at 11700 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 30% in 14 months. So Order now Our July trades are in the profit zone with 4 weeks before expiration. If we can get a short term recovery we will take profit and wait for a set back to reenter. Our selected strike prices are still very secure and we can expect a good profit again in the week to come. You now need to subscribe to our trading service to see the specifications. All our portfolio shows a 30% 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 may Retail sales were up 1% better than expected. CPI was up 0.6% and core CPI was up 0.2% inline with expectations. PPI was up 1.4% and core PPI was up 0.2% a bit higher than expected. Housing starts was down 2% and building permits were down 1.4% lower than expected. Economic slowdown stays in our mind. Economic results continue to be mixed and are not as bad as many were expecting. We are not in a recession as many wanted us to believe. We may not be far form it but we are not there yet. Energy prices continued to swing both sides with a few new records. However we can expect this speculation to end sooner than anticipated which good give a boost to the market. It is clear that 100$ is the right price reflecting supply and demand at this time and it looks more and more like tech bubble we had in 2001. The FED made it clear the rate cuts are over and may have to start rising them earlier than previously forecasted. So for mid term it does not look so well for stock market. The SP500 PE ratio is at 16.74 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