INDEX TRADING WEEKLY UPDATE

SP500 slowed down a bit and will show negative divergences if any attempt to new high in the coming weeks. 2nd up cycle of the year may be near the end. DOW is still in a trading range. ND100 weakened a lot in the past 2 weeks and is now near the lower band. It may be the end of the second up cycle in this market.

Slowing down

Last trades update

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Slowing down

Index Market	Current Price	2 weeks Change	# cycles completed
SP500	1282.82	-15.37	1
ND100	1872.54	-85.02	1
Dow	11544	-116	1

SP500 Last Comment

SP500 slowed down a bit in the past 2 weeks and is now around the moving average. If any attempt to new high which means above 1305 we will see our first negative divergences in this cycle. We may start to see in a couple of weeks from now a set back to the lower band to find a base for the last cycle of the year which could be very interesting. We have an RSI of 43 almost oversold. We can expect sideways market conditions over the next 2 weeks in this market.

1200 is our first support. 1180 is our second support

ND100 had a quite strong retreat in the past 2 weeks now under the moving average and near the lower band for the first time in 2 months. It is the first major weakness since a long time. We may see the end of the second cycle in this market over the next 2 weeks. ND100 is almost oversold with an RSI at 35.

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 7 weeks and is now weakening a little like SP500. RSI reading is at 43 near oversold. We can expect DOW to continue it's trading range with a slight possibility for a set back to the lower band (11215).

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$	500$	1050$
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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

+1.2%

+1.8%

+1.4

+0.2%

+1,1%

+0.3%

+1.0%

-01.%

+3.2%

+0.1%

+1.1%

-1.4%

Core PPI

+0.7%

+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

0.965M

1.091M

0.975M

1.008M

0.954M

1.065M

1.012M

1.004M

1.173M

1.232M

1.193M

1.33M

Building Permits

0.937M

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

+1.3%

+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

+2.4%

-0.56%

-2.28%

+2.8%

-8.5%

-1.83%

-2.81%

-4.7%

-9.00%

+1.68%

-4.8%

Existing Homes Sales

5.00 Millions

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
+3.3%	+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 July PPI came in at + 1.2% and core PPI at 0.7% much higher than expected. Building permist were down more than 6% and housing starts were down near 4% lower than expected. Existing home sales were up 3% and new home sales were up 2.4% a bit better than expected. Revised DSP for 2nd quarter came in at 3.3% much better than expected.

Economic slowdown continues no surprise about that. Inflation numbers were higher at wholesale level were much higher than anticipated. This is very disturbing. GDP is far better than expected so we are not in recession. Crude continue to remain lower at around 115-120. Real estate markets show sign of improvements in the existing home sales because of lower prices. 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 21.2 according to March results. We are above 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).