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Mikey's Short Term Trading Rules

1) Make up a list of stocks, commodities or ETF's to trade. This list should be names that have good earnings and high relative strength.
2) Monitor this list and throw out the weaker names
3) Buy only stocks or ETF's that are intermediate and daily up (green) and the market is Daily and intermediate term up (green)
4) Buy pullbacks on these stocks to the 20 and 50 day averages
Usually you get 4 to 6 20 day pullback buys and 2 or 3 50 day pullback buys in an intermediate term trend
5) More agressive traders can buy the 7 day average in the first 3 to 8 weeks of the uptrend.
6) Buy pullbacks not runups. A buy should not be easy or exciting but difficult and somewhat scary. DO NOT CHASE
7) Place stop at 5% below the buy price. Do not remove
8) Sell 3 to 5 days after the stock price takes out its most recent 2 week high with at least 15% gains
9) Uptrends that are 12 weeks or more may be ripe for a correction. The first 2 pullbacks to the 50 day are usually safe.
Intermediate term uptrends and downtrends generally last from 8 to 16 weeks with 12 weeks being the norm.
10) Shorting is a viable strategy in downtrends for experienced traders only. In general, reverse the above rules
11) Tweet Mikey @themarketshadow with questions or ideas

Tuesday, November 2, 2010

DJIA 11143.38 +64.10 S & P 500 1193.57 +9.19 NASDAQ 2533.5 +28.68
DJT 4818.62 +61.70 DJU 406.65 +4.90 IBD100 276.34 +2.64 VIX 21.57 -.26
US Gov rates: 6 mo .147%  2 yr .3474 % 10 yr 2.59 -.04 30 yr 3.93 -.07
Gold 1356.90 +6.30 Silver 24.84 +.29 Oil 84.68 USD 76.72 -.57
Days to option expiration 14 Day 12 of November Expiration 11/19

Long Term Opinions:

Bonds: Major long term top forming. .... Current trend down
Stocks: Secondary bear market rally ending......  Current trend up weakening
Gold: Primary top forming crash expected.....  Current trend up
Oil : Secondary bear market rally ending..... Current trend up
Commodities: Bear market rally ending..... Current trend up
Real Estate: Bottoming no uptrend..... Current trend neutral, weakening
US Dollar: Major long term bottom forming .....Current trend down
US Economy: Double dip coming .....Current trend neutral, weakening
Emerging Markets: Bear market rally ending..... Current trend up
World economy: Current trend up..slowing
World politcal environment: Tensions increasing

Economic Conditions: Poor

11-1 ISM 56.9 +2.5 14 of 16 industries report growth
Consumer spending declined .2% in Sept
Construction spending +.5% in Sept rising from a decades low level Aug revised to -.2% from +.4%
Incomes fell .1%

Noteable:

SEC investigating Chase on its adequate disclosure of hedge fund in the selection of asset for 1.1 billion package of subprime loans.
Ambac looking to go bankrupt.

Short Term Trading Indicators

Mikey OB/OS index(80 OB 20 OS) 73
Put/Call Ratio(.6 OB 1.2 OS) .52
10 day average .81
Ratio Put Premiums/Call Premium . (OB .53/ OS 1.54) .66
Put Premium 10 day average .67
Williams %R 12 day --37.26 ( uptrend OB:-1.00, downtrend OS -99): Weekly -4.63
% Advisory Service Bulls 45.6  Bears 24.4  Bear/Bull ratio .535   Bullish
Mikey Thrust indicator: Daily 6 Weekly 10(1 low, 10 max) Max thrust 9/3
DJIA MACD +117.30 Falling/ Negative cross 10/19
NYSE New Highs 257  New Lows 14
NASDAQ New Highs 168 New Lows 40
NYSE Advance-Decline +1437 NASDAQ Advance-Decline +1246
Mikey A/D line.(from 9/17/10). NYSE +9504 NASDAQ +5164
Support: 1130 S & P, 10720 DJIA Breakout 9/20
Resistance: 1220 S & P; 11200 DJIA
IBD 100 index Breakout  9/2 242.87
Mikey power index on DJIA peaked on 9/22 at 88
MACD  First negative cross 10/19 MACD peaked on 10/14 @160.92
Put Premiums remain low indicating low demand for puts
Nasdaq A/D line lagging
11-2 .52 Put/call reading

Moving Averages
DJIA 5 day 11130  Falling/Price above
DJIA 20 day 11073 Rising/Price above
DJIA 50 day 10721 Rising/Price above
DJIA 200 day 10529 Rising/Price above

Mikey Power Index (MPI)
 (Uptrend Above 60, Sell below 40)
 (Uptrend = +, Downtrend = -, Neutral = 0)

Stocks 45 Bonds 30 Emerging Mkts 52, China 57, Brazil 40, Oil 49, Nat Gas 44, Copper 52, Gold 50, Silver 61, USD 52,  Aussie 51, Euro 59, Brit Pd 59

Trends
Mikey Short term trend: Up as of 9/2 @ 10320....42 trading days.. 8 weeks
Mikey Intermediate Trend: Up 09/03/10 10477
Mikey Long term trend: UP 10/13/10 11052
IBD : Confirmed Uptrend as of 9/01 @ 10269

2x Short ETF Score 788 ( 2 up, 7 down, 9 neutral)
Green=up, Red= down, Black = neutral

DXD 50, SDS 30, DZZ 52, ZSL 42, DUG 37, EEV 50, FXP 42, SMN 54, CMD 39, SKF 39, SRS 41 SZK 29, QID 23, SCO 54, RXD 36, TBT 67, SDP 68, REW 35

Legend: DXD =UltraShort DJIA,.SDS= Ultra short S&P 500, DZZ= UltraShort Gold, ZSL =UltraShort Silver, DUG =UltraShort Oil index,EEV=UltraShort Emerg Mkts,FXP= Ultrashort China25, SMN=UltraShort Basic Mat, CMD= Ultrashort Commodities, SKF=UltraShort Financials, SRS=UltraShort Real Estate, SZK=UltraShort Consumer Goods, QID =UltraShort NASDAQ 100, SCO=Ultrashort oil, RXD=UltraShort Health Index,TBT=UltraShort 20+ year Treasuries, SDP=UltraShort Utilities REW=UltraShort Technology

2x Long ETF SCORE 1030   (7 up, 1 down, 9 neutral) Green=up, Red= down, Black = neutral

DDM 45, SSO 65, UGL 52, AGQ 62, DIG 67 , EET 59, XPP 50, UYM 43, UCD 61, UYG 56, URE 58, UGE 57, QLD 78, UCO 47 RXL76, UBT 29, UPW 58 ROM 72

Legend: DDM =Ultra DJIA, SSO=Ultra S&P 500, UGL=Ultra Gold, AGQ=Ultra Silver, DIG=Ultra Oil index, EET=Ultra Emerging Mkts, XPP =Ultra China25, UYM Ultra Basic Mat, UCD=Ultra Commodities, UYG=Ultra Financials, URE=Ulta Real Estate, UGE=UltraConsumer Goods, QLD UltaNasdaq 100, UCO=Ultra Crude Oil, RXL=Ultra Healthcare, UBT Ultra 20+ Year Treas, UPW=Ultra Utilities, ROM=Ultra Technology


Total Score (uptrend is positive) +242
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