Index Trading Weekly Update

Here is an example of the last newsletter: 

SP500 Last Signal Comment

We just had a new sell signal last Friday on June 10, 2005. As expected we faced strong resistance at 1200 and it ended with a double top as stated in previous cases. We have 36 points profit (3%) that the trade was in line with expectations. A double top should always be taken because we had 90% success in the past very seriously. We still have a strong support between 1140 and 1160. We now expect to fall to the lower band of the market in the coming weeks (see chart below). We just completed our second cycle of this year and we are now waiting for the next buy signal to start a new one. On

ND100 Last Signal Comment

We had our last buy signal on April 21, 2005. Since then, the market tried to consolidate just above the 1400 mark which is now considered as a good foothold. We are lead of 73 points so far. We had just a second week now closed down for the moving average and get. Very close to a sell signal The 1460 opposition was more serious than antcipated. This market has not completed any cycle so far and we have our first cycle as we speak. So this last buy signal is ahead for some good profit.

DOW Last Signal Comment

We had our last buy signal on April 21, 2005. Since then, we had a good swing above 10,400, but the DOW had a set back able to downtrending line breaking force since early March. We had a little up this week in this market. It was the only places of a positive step. We are now 294 points ahead. We are not very far to get a sell signal. I have no great profit to expect from this trade, but we now know it will be a profitable one. The 10,600 resistance continued threat this market. We had so far completed one cycle of this year and we are now in a second. It seems that we have a good support at 10,100 (see chart below).

Special Option Strategy Update

We are now 3 weeks into our SP500 1100 PUT around $ 1.45. So much for the value of this PUT now of $ 0.35. With only one week to go we will definitely money with this trade. Always remember that you need between 11,000 and $ 15,000 margin for each contract.

Current economic conditions

Inflation appears to be less related to the latest economic figures in recent weeks. The industrial activity slowed and the employment number was sharply down as well (see below). We can expect at least another two rate hikes in the coming months. The experts are not so sure that we will reach 4% before we can see a break. On rate hikes The break can now come earlier.

Mr. Greenspan tried to reassure this week on the continuation of the current economic growth investors. Time will tell if he's right.

The U.S. employment was weak in May with only 78,000 new Jons created compared to 275,000 in April. The employment numbers keep coming in in some way inconsistent. In March we had created only 140,000 jobs, which was considered weak.

The SP500 PE ratio is at 19.40 which is considered low. Remember that when the last major economic cycle that began in March 2003 with the PE ratio was about 16. So we are on the low side. The markets are way is overbought and we should not expect any major bear market that for the moment.

The latest revised GDP for the first quarter of 2005 was 3.5 only 0.1 from the expectations compared to the previous reading of 3.8. It starts on a slight slowdown in economic growth, but nothing to show. Worry at this point

This is it for this week and continue each signal change on the Index Trading Signals page monitors

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Thanks

Richard Bastien

My name is Richard Bastien. I have a computer specialist for over 30 years. I researched and created an Index Trading System with 100% automated trading signals in the past 10 years.