Posting Times

Posts will be between 8:30 PM to 10:00 PM PST
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

Wednesday, November 24, 2010

Stocks rise on errr good economic news

DJIA 11187.28 +150.97 SPX 1198.35 +17.62 NASDAQ 2543.12 +48.17
DJT 4911.38 +132.38 DJU 395.25 +1.50 IBD 100 287.27 +6.15 VIX 19.56
US Gov rates: 6 mo .2019%  2 yr .5390% 10 yr 2.91 +.12 30 yr 4.28 +.09
Gold 1373 -4.30 Silver 27.52 -.04 Copper 3.74 -.05
Oil 83.86 +2.36 RBOB 2.15 +.06  Nat Gas 4.39 +.13
USD Index 79.94 +.15 DBC 25.14 +.46
Aussie ..977 -.0042 EURO 1.331 -.0016 Pound 1.576 -.0014 Yen 83.46 -.08
Days  to option expiration 17 Day 3 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

Economy:
11-24 Durable goods fell 3.3%
Jobless claims fell 34000 last week to 407000
Personal spending +.4% in Oct
U of Mich Consumer sentiment 71.6% highest since June
ECRI Nov 19th -3.1%
New home sales fell 8.1%, ave price of a home fell 13.9% in August

Noteable:
Texas jury covected ex- republican house leader Tom Delay of illegally funneling 190000 of corp donations to Texas GOP candidates in 2002. He was once the most powerful Republican in Congress.
US carrier orders to Korea for war games with S Korea on Sunday.
Deere beats but outlook weak

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) .82
Put/Call Ratio(.6 OB 1.2 OS) .71
10 day average .77
Ratio Put Premiums/Call Premium . (OB .53/ OS 1.54) .72
Put Premium 10 day average .67
Score: Put/call + premium ratio = 1.43
Williams %R 12 day -52.69.( uptrend OB:-1.00, downtrend OS -99): Weekly -23.53
% Advisory Service Bulls 56.2 Bears 20.2  Bear/Bull ratio .35   Bullish
Mikey Thrust indicator: Daily 4 Weekly 8 (1 low, 10 max) -4
DJIA MACD 31.40  Falling/ Negative  cross 11-12 (second cross)
NYSE New Highs 147 New Lows 10
NASDAQ New Highs 185 New Lows 41
NYSE Advance-Decline +1980 NASDAQ Advance-Decline +1533
Mikey A/D line.(from 9/17/10). NYSE +10002  NASDAQ +3923
NYSE % above 200 day ave: 70%

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
11-24 Sharp pre-Thanksgiving rally on low volume
Conclusions: Still correcting an intermediate term uptrend.

Moving Averages

DJIA 5 day 11157 Rising/Price sbove
DJIA 20 day 11212 Flat/Price below
DJIA 50 day 11044  Rising/Price above
DJIA 200 day 10616 Rising/Price above

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

World Markets, Commodities, Currencies

DJIA 39, Emer Mkts 35 China 43, Brazil 31, Europe 28, Russia 42,
Japan 44, Korea 41, India 51, Austrailia 31, Germany 41, Spain 46, UK 41
Oil 39, Nat Gas 65, Gasoline 49
Gold 40, Copper 44, , Silver 61, Platinum 54, DBC 46,
USD 62, Aussie 27, Euro 37, Brit Pd 23, Yuan 41, Yen 38

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

Homebuilders(XHB) 49, Basic Mat (XLB) 54, Energy (XLE) 62 Finance (XLF) 46, Tech (XLK) 55, Retail (XRT) 74, Health (XLV) 48, Airlines ($XAL) 64, Utilities (XLU) 41 ,Gold Miners (GDX) 55, Real Estate (IYR) 49. Consumer Disc(XLY) 62, Consumer Staple(XLP) 51, Metals and Mining(XME) 60 

Bonds

MUB (Natl Muni) 34,  NCA(Ca Muni) 51
BND (Total Bond Index) 38, BWX (International Treas Bonds) 33,
TLT (20+ US Treasuries) 40, IEF ( 10 yr Treasuries) 39,
PFF (US preferred) 44, HYG (High Yield) 37
Double ETF's

2X Short ETF Score  1052 (11 up  6 neutral  1 down) Green=up, Red= down, Black = neutral

DXD 59, SDS 69, DZZ 61, ZSL 42, DUG 34, EEV 67, FXP 68, SMN 49, CMD 51, SKF 60, SRS 65 SZK 48, QID 69, SCO 65, RXD 66, TBT 62, SDP 54, 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 687 (1 up 5 neutral 12 down) Green=up, Red= down, Black = neutral

DDM 35 SSO 26, UGL 44 AGQ 57, DIG 67, EET 30 XPP 30, UYM 51, UCD 51, UYG 32, URE 31 UGE 24 QLD 29, UCO 35  RXL 31, UBT 32, UPW 44 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) -365 Correction

New orders for U.S. manufactured goods unexpectedly fell in October to post their largest decline in nearly two years and business capital spending plans dropped, according to the Commerce Department that pointed to a slowdown in factory activity.

Consumer spending rose for a fourth straight month in October and a key inflation gauge was at a record low, according to the Commerce Department, strengthening the Fed's defense of its decision to loosen monetary policy further.

And consumer sentiment rose to its highest level since June on tentative signs of improved job conditions and early discounts from retailers.

Consumers increased spending in October while jobless claims hit a 2 year low. New claims for unemployment dropped by 34000 last week to 407000 the lowest level since July 2008. You remember July of 2008 don't you. That was when they told us that we were not going into a recession. The dollar was bottoming and the commodities, oil, and gold market were peaking.

The U of Mich consumer sentiment index came in at 71.6 the highest since June. The Fed lowered its 2011 growth forecast to 3 - 3.6 %. Durable goods fell 3.3% in October excluding transportation they fell 2.7%. Demand for non defense fell 4.5%. New home sales fell 8.1% in October to an annual rate of 283000 just above Augusts record low of 275000. Sept median price fell 13.9% from August to 193000.

You add all of this up and you can see why the consumer is as happy as a clam. He is ecstatic that his house only fell 14%, but he got to keep it.  He got to keep his job one more month, and if he bought a big ticket item it is going to be cheaper. Last month he busted out the credit cards and increased his spending. Now that is good news for the economy.
Mikey
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