September 27, 2008
INDEX TRADING WEEKLY UPDATE
September 26th 2008 Issue # 116
Written By Richard Bastien
Author of Index Trading System
© copywright besttradingsystems.com
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Please note that the next number will be September 27th 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.
3rd up cycle nearby |
SP500 had wild swings over the past 2 weeks reaching extreme oversold then rebounded strong to then set back again to create a double bottom. So we are now near the beginning of our 3rd up cycle of the year. First level support of 1200-1220 still hold. DOW remains in a trading range and is also testing first level support. ND100 barely hold first level support. Last trades update
SP500 Last Comment SP500 had several wild swings reaching extreme oversold in the first week to react immediately up on a 2 days strong recovery and then had a set back again last week to create a double bottom at the end of the week. 1200-1220 support was strongly tested and even temporarly penetrated but was reintegrated which is good news. It is possible that SP500 could retest last low of 1135-1150 before starting the last up cycle of the year which is generally the best one of the year even if it does not look that way for now. We have an RSI of 43 almost oversold. We can expect a few more wild swings in the coming days but I believe we are close to start an up cycle. 1200 is our first support. 1180 is our second support 
ND100 Last Signal Comment ND100 had wild swing s as well and is barely holding 1680 support line. It came close to be extreme oversold and rebounded like the rest of the markets and is now retesting 1680 support where we should have the base for a new up cycle. We can expect a few more wild swings before a new up cycle starting. We can consider that our first support is now at 1670. Our second support is at 1450.
DOW Last Signal Comment DOW like our other 2 markets almost touched the extreme oversold level then rebounded strong to set back again to create a double bottom like SP500. DOW is much more solid than other markets and is now in position to start a new up cycle which can occur any time now. First level support is hanging in there. RSI reading is at 40 near oversold. We can expect DOW to continue holding up above 10800 and start a new up cycle in the next 2-3 weeks. Our first support is now 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 40% in 18 months. So Order now Our december trades are safe for now but still behind. If SP500 does not go through it's first level support we will have a chance to take a lot of profits by the end of october. You now need to subscribe to our trading service to see the specifications. All our portfolio shows a 40% plus value since beginning march 2007.
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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 3.1% and CPI at 4.9%. In the last 2 weeks we had several major economic news. See the table above for all numbers. For august CPI was down 0.1% and core CPI was up 0.2% inline with expectations. Building permits were down 6.3%. Housing starts were down 4.5% way under expectations. Existing home sales were down 2.3% and new home sales were down 11.5% way under expectations. Durable food orders were down 4.5% under expectations as well. Finally Final GDP came in at 2.8% for second quarter under expectations again. Economic slowdown continues no doubt about that with real estate numbers worsening again at very deep level. CPI was down with lower oil prices. Crude continue to remain lower near 100. Now that PPI and CPI lowering and oil is down with higher US dollar we have a slight chance to see the FED lower the rates even if it is remote. Those last economic numbers were all way under expectations and if we have another month like that next quarter GDP might be negative. The SP500 PE ratio is at 20.5 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). |
This is it for this week and continue to monitor any signal change on the
Index Trading Signals page
Richard Bastien