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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 23, 2010

North Korea gives Ben a boost

DJIA 11036.37 -142.21 SPX 1180.73 -17.11 NASDAQ 2494.95 -37.07
DJT 4779 +78.79 DJU 393.75 -4.66 IBD 100 281.12 -4.53 VIX 20.63
US Gov rates: 6 mo .193%  2 yr .4646 % 10 yr 2.796 -.01 30 yr 4.19 -.02
Gold 1377.60 +19.80 Silver 27.56 +.30 Copper 3.79 +.03
Oil 81.26 -.48 RBOB 2..09 -.01 Nat Gas 4.26 -.02
USD Index 79.75 +1.13 DBC 24.65 -.09
Aussie .9751 -.0165 EURO 1.3323 -.0248 Pound 1.5696 -.0192
Days  to option expiration 19 Day 2 of December Expiration 12-17

Long Term Opinions:

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

Stock Market Trends

Mikey Short term trend: ...11-16. market correction 11023
Mikey Intermediate Trend: Up 09/03/10 10477
Mikey Long term trend: UP 10/13/10 11052
IBD : Market under pressure@ 11192 on 11-13 Market in Correction 11-17 11201

Short Term Trading Indicators

Mikey OB/OS index(80 OB 20 OS) .77
Put/Call Ratio(.6 OB 1.2 OS) .88
10 day average .75
Ratio Put Premiums/Call Premium . (OB .53/ OS 1.54) .72
Put Premium 10 day average .65
Score: Put/call + premium ratio = 1.60
Williams %R 12 day -86.70 .( uptrend OB:-1.00, downtrend OS -99): Weekly -36.70
% Advisory Service Bulls 56.2 Bears 20.2  Bear/Bull ratio .35   Bullish
Mikey Thrust indicator: Daily 1 Weekly 7 (1 low, 10 max) -6
DJIA MACD 32.05  Falling/ Negative  cross 11-12 (second cross)
NYSE New Highs 39 New Lows 31
NASDAQ New Highs 57 New Lows 59
NYSE Advance-Decline -1685 NASDAQ Advance-Decline -1332
Mikey A/D line.(from 9/17/10). NYSE +8122  NASDAQ +2390
NYSE % above 200 day ave: 66%

Support: 1130 SPX, 10720 DJIA Breakout 9/20
Resistance: 1220 SPX; 11200 DJIA
IBD 100 index Breakout  9/2 242.87

Comments:
Mikey power index on DJIA peaked on 9/22 at 88
MACD  First negative cross 10/19 MACD peaked on 10/14 @160.92
11-2 .52 Put/call reading
11-4 DJIA breaks out above 11258 April 26 high DJIA at 11200 resistance level
11-5 Indicators overbought all trends up
P/C and premium total a very low 1.09
MCD positive cross  market at new high MACD below 10-14 high possible divergence
Mikey OB/OS @ 87
Put Premiums .48
11-8 Extremely low put activity and premiums
11-11 Market is selling off Put premiums and P/C ratios NOT expanding meaning there is no concern about this sell off.
11-12 Market reverses 11258 breakout of 11-4
11-15 GLD reverses closes below 133.07
11-16 DJIA reverses closes below 11143 hits 50 day average
Muni market hits 52 week low interday down 4.6% in last 4 sessions ..That was quick
11-17 Bounce off of sell signal
11-23 Dollar in uptrend

Moving Averages

DJIA 5 day 11122 Falling/Price sbove
DJIA 20 day 11209 Falling/Price below
DJIA 50 day 11032  Rising/Price at
DJIA 200 day 10311 Rising/Price above

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

Currencies, Commodities, World markets

DJIA  41, Emer Mkts 38 China 34, Brazil 27, Europe 29
Oil 41, Nat Gas 60, Gasoline 48
Gold 36, Copper 38, , Silver 59, Platinum 42,
DBC 50, USD 53, Aussie 27, Euro 46, Brit Pd 31
Note: Nat Gas verge of emerging, China, Brazil Emerging Markets correcting, Commodities verge of breaking

US Industry Groups (relative strength)  (Uptrend , Downtrend , Neutral )

Homebuilders(XHB) 40, Basic Mat (XLB) 48, Energy (XLE) 56 Finance (XLF) 40, Tech (XLK) 47, Retail (XRT) 70, Health (XLV) 42, Airlines ($XAL) 54, Utilities (XLU) 36 ,Gold Miners (GDX) 55, Real Estate (IYR) 41. Consumer Disc(XLY) 54, Consumer Staple(XLP) 46, Metals and Mining(XME) 57 

Bonds

MUB (Natl Muni) 35,  NCA(Ca Muni) 27
BND (Total Bond Index) 52, BWX (International Treas Bonds) 36,
TLT (20+ US Treasuries) 35, IEF ( 10 yr Treasuries) 36,
PFF (US preferred) 49, HYG (High Yield) 43

Double ETF's

2X Short ETF Score  1057 (11 up  6 neutral  1 down) Green=up, Red= down, Black = neutral

DXD 65, SDS 65, DZZ 65, ZSL 45, DUG 30, EEV 64, FXP 67, SMN 55, CMD 49, SKF 56, SRS 66 SZK 49, QID 68, SCO 64, RXD 68, TBT 65, SDP 55, REW 63

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=UltraShortSZK=UltraShort Consumer Goods, QID =UltraShort NASDAQ 100, SCO=Ultrashort oil, RXD=UltraShort Health Index,TBT=UltraShort 20+ year Treasuries, SDP=UltraShortltraShortSZK=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 668 (1 up 5 neutral 12 down) Green=up, Red= down, Black = neutral

DDM 34 SSO 29, UGL 41 AGQ 56, DIG 70, EET 30 XPP 32, UYM 46, UCD 49, UYG 34, URE 27 UGE 22 QLD 32, UCO 34  RXL 26, UBT 26, UPW 42 ROM 38

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) -389 Correction

The dollar emerged into an uptrend in a flight to safety brought on by one of Ben's closest friends...North Korea. All of this right after the G-20 meetings that failed to make an agreement on Ben's dollar bashing ways. Let's see Ben won't budge but the dollar goes up. This is a perfect senario for a great dollar rally.  
Now what about Israel and Iran, Ben?

Mikey
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