INDEX TRADING WEEKLY UPDATE

SP500 moved out of a trading range(1230-1280) and is now in a slow uptrend. 2nd up cycle of the year is now in motion and should last till the end of the month. DOW is still in a trading range. ND100 broked out of current trading range and is now way above the upper band and is overbought

Slow uptrend

Last trades update

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Slow uptrend

Index Market	Current Price	2 weeks Change	# cycles completed
SP500	1298.2	+37.89	1
ND100	1957.56	+131.00	1
Dow	11660	+334	1

SP500 Last Comment

SP500 broked above it's short term trading range and is now in a slow uptrend confirming that we are in our second up cycle of the year. It is near the upper band with an RSI at 64 almost overbought. We don't see any negative divergences for now which means we should have a shot higher above the last short term high of 1310 soon. We might have 2 more weeks of slow uptrend.

1200 is our first support. 1180 is our second support

ND100 broked solid above recent trading range(1800-1870) and is now over the upper band and is overbought with an RSI reading at 76. This market is very strong and does not show any negative divergences. We might see short term pullbacks but retest to new high in this current up cycle is what we can expect.

We can consider that our first support is now at 1800, our next support at 1670.

DOW is still in a trading range(11200-11700) now lasting for 5 weeks but is near breaking out above that range. RSI reading is at 62 not yet overbought. DOW started also it's second up cycle of the year. I don't expect this cycle to go very high however. We can expect DOW to behave OK since we don't have any negative divergences

Our first support is now at 10800.

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2008/06/30	SPX	PUT Uncovered	Sell PUT uncovered september SPX	SPT		September	12000	1100$	100$	1000$
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Click here to find the options trading signals page. Economic Current Conditions

Table of Economic Numbers

Economic Info

July 2008

June 2008

May 2008

April 2008

March 2008

February 2008

January 2008

December 2007

November 2007

October 2007

September 2007

August 2007

PPI

+1.8%

+1.4

+0.2%

+1,1%

+0.3%

+1.0%

-01.%

+3.2%

+0.1%

+1.1%

-1.4%

Core PPI

+0.3%

+0.2%

+0.2%

+0.4%

+0.2%

+0.5%

+0.4%

+0.2%

+0.4%

+0.0%

+0.1%

+0.2%

Retail Sales

-0.1%

+0.1%

+0.8%

+0.4%

+0.2%

-0.4%

+0.4%

-0.4%

+1.2%

+0.2%

+0.6%

+0.3%

CPI

+0.8%

+1.1%

+0.6%

+0.2%

+0.3%

+0.0%

+0.4%

+0.3%

+0.8%

+0.3%

+0.3%

-0.1%

Core CPI

+0.3%

+0.3%

+0.2%

+0.1%

+0.2%

+0.0%

+0.3%

+0.2%

+0.3%

+0.2%

+0.2%

+0.2%

Housing Starts

1.091M

0.975M

1.008M

0.954M

1.065M

1.012M

1.004M

1.173M

1.232M

1.193M

1.33M

Building Permits

1.066M

0.969M

0.982M

0.932M

0.978M

1.048M

1.080M

1.152M

1.170M

1.126M

1.326M

Employment

-51,000

-51,000

-62,000

-28,000

-81,000

-63,000

-22,000

+82,000

+135,000

+170,000

+96,000

89,000

Durable Goods Orders

+0.8%

+0.1%

-1.0%

-0.3%

-0.9%

-4.7%

+4.4%

+0.5%

-0.4%

-1.7%

-5.3%

New Homes Sales

-0.56%

-2.28%

+2.8%

-8.5%

-1.83%

-2.81%

-4.7%

-9.00%

+1.68%

-4.8%

Existing Homes Sales

4.86 Millions

4.99 Millions

4.89 Millions

4.93 Millions

5.03 Millions

4.89 Millions

4.91 Millions

5.00 MIllions

4.98 Millions

5.04 Millions

5.48 Millions

ISM Index(Manufacturing)

50.0

50.2

49.6

48.6

48.6

48.3

50.7

48.4

50.8

50.9

52.0

52.9

ISM Services

49.5

48.2

51.7

52.0

49.6

49.3

44.6

53.9

54.1

55.8

54.8

55.8

Factory Orders

+1.7%

+0.9%

+1.3%

+1.5%

-0.9%

-2.3%

+2.3%

+1.5%

+0.7%

+0.30%

-3.5%

GDP(Gross Domestic Product) Numbers

2nd Quarter 2008	1st Quarter 2008	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
+1.9%	+1.0%	+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 2.9% and CPI at 5.0%.

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

For June Factory orders were up 1.7% a bit better than expected. For July ISM services came in at 49.5 a bit lower than expected. Retail sales were down 0.1% inline with expectations. CPI was up 0.8% and core CPI was up 0.3% higher than expected.

Economic slowdown continues no surprise about that. Inflation numbers were higher than expected despite a drop in crude oil. This is very disturbing. GDP is still postive so we are not in recession. Crude continue down sharply giving some breathing space to monetary authorities. Inflation numbers are not lower than previous ones so it is adding pressure to increase rates if we get another bad month on inflation numbers. The FED made it clear the rate cuts are over and may have to start rising them earlier than previously forecasted.

The SP500 PE ratio is at 19.3 according to December results. We are close to the high end of the 16-20 range which means we could see lower levels.

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 high end of the range (16-20).