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

Monday, November 1, 2010

Twisting in the wind, while they extend and pretend

DJIA 11124.62 +6.13 S & P 500 1184.38 +1.12 NASDAQ 2504.84 -2.57
DJT 4156.92 +2.63 DJU 401.75 -3.11 IBD100 273.73 -.49 VIX 21.20 +.32
US Gov rates: 6 mo ..142%  2 yr .3435 % 10 yr 2.63 +.02 30 yr 4.00
Gold 1350.60 Silver 24.55 -.18 Oil 82.95 +1.02 USD 77.29 +.13
Days to option expiration 15 Day 11 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

Short Term Trading Indicators

Mikey OB/OS index(80 OB 20 OS) 73
Put/Call Ratio(.6 OB 1.2 OS) .94 
10 day average .84
Ratio Put Premiums/Call Premium . (OB .53/ OS 1.54) .65
Put Premium 10 day average .67
Williams %R 12 day -38.07( uptrend OB:-1.00, downtrend OS -99): Weekly -9.58
% Advisory Service Bulls 45.6  Bears 24.4  Bear/Bull ratio .535   Bullish
Mikey Thrust indicator: Daily 6 Weekly 9 (1 low, 10 max) Max thrust 9/3
DJIA MACD +117.09 Falling/ Negative cross 10/19
NYSE New Highs 214  New Lows 18
NASDAQ New Highs 146 New Lows 38
NYSE Advance-Decline +151 NASDAQ Advance-Decline -712
Mikey A/D line.(from 9/17/10). NYSE +8067 NASDAQ +3918
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
Put Premiums remain low indicating low demand for puts
Nasdaq A/D line lagging

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 28 Emerging Mkts 50, China 57, Brazil 40, Oil 48, Nat Gas 45, 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 789( 2 up, 7 down, 9 neutral)
Green=up, Red= down, Black = neutral

DXD 50, SDS 34, DZZ 52, ZSL 42, DUG 36, EEV 48, FXP 42, SMN 53, CMD 39, SKF 38, SRS 44 SZK 27, QID 23, SCO 55, 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 1039   (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 49, UYM 48, UCD 48, UYG 57, URE 58, UGE 67, QLD 78, UCO 47 RXL76, UBT 33, UPW 54, ROM 73
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) +250

The US economy is twisting in the wind. It is like an old shoe that is all worn out and is sitting in the back corner of the closet. I think it is by now quite obvious to just about anyone that the economy in the US has been used to the point of being worn out. Personal incomes are flat and business is not hiring and the average guy on the street has used all of his credit  and unemployment benefits are expiring. The GDP was reported to have increased 2% but it did so on inventory expansion and lackluster consumer spending.

The average guy is also getting nailed by Obama care. Insurance companies are passing the higher costs of insuring the poor on to those who have plans, particularly in the public sector where state and local governments must cut hours and benefits to keep to their budgets. They do not have the luxury of printing money they must tighten their belts.

The consumer's main asset, his house, has started to decline again as the banks make ready to start the foreclosure process again. His ability to borrow has be compromised by the falling values of his house and falling income levels and lack of jobs. The only asset that is rising is the stock market.  That, of course is being directly manipulated by the central banks. They base the valuations of corporate incomes. Most of the profits are coming from overseas and, therefore, they can justify higher stock prices by corporate profits and detach the process from the US economy.

This game is going to end soon as the overseas producers will have no market to sell to in the US.  The US economy is a secondary issue now. The central banks are taking care of the corporations and their profits now. The US economy will have to wait and is now twisting in the wind. The name of the game is extending and pretending and as long as the corporations show their profits they can continue to do what they are doing now. The public is fed up with this game and those who still vote will vote out the incumbent again this election. The new guys are the old guys that caused the problems in the first place. The beat goes on.

Mikey
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