All indicators overbought..Trend up but looks tired

DJIA 11478.13 -13.78 SPX  1247.08 +3.17 NASDAQ 2649.56 +6.59
IBD 293.09 +.83 DJT 5042.09 -9.23 DJU 403.75 +2.09 VIX 16.41
US Gov rates: 6 mo .183%  2 yr .6136% 10 yr 3.30 -.04 30yr 4.43 -.01
Gold 1386.10 Silver 29.35 +.13 Copper 4.21 +.04 Platinum 1710.70 +10.40
Oil 89.37 +1.09 RBOB2.32 +.01 Nat Gas 4.24 +.18
Aussie .9964 +.0058 EURO 1.3069 -.0067 Pound 1.5422 -.0011
USD Index 80.97 +.16 DBC 26.53 +.06
Days to option expiration 1 Day 21 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 stalled
Gold: Primary top forming crash expected.....  Current trend up stalled
Oil : Secondary bear market rally ending..... Current trend up stalled
Commodities: Bear market rally ending..... Current trend up
Real Estate: Bottoming ..... Current trend down

US Dollar: Major long term bottom forming .....Current trend up

US Economy: Double dip coming .....Current trend neutral
Emerging Markets: Bear market rally ending..... Current trend up
World economy: Current trend slowing
World political environment: Tension, aggravated

Where's Waldo: Waldo is buying Gold, Bonds and Emerging Markets.

Economy:
Case/Schiller home price index fell .8% in Sept Prices +.6% from 1 year ago
12-2 jobless claims rose 26000 to 436000 presented as a positive
November same store sales rose 5.3% vs a year ago presented as a positive for a nice Xmas for retailers
12-3 Non-farm payrolls rose 39000 in November a 10 month low. Jobless rate at 9.8%
Goods producers trimmed 15000 jobs Builders cut 5000 workers. Retailers cut 28000, government cut 14000. Service firms added 65000
Underemployment rate was 17%
ISM service sector rose .7% to 55
Analysts stuck to their view that the economy is recovering at a modest pace.
Proposed by Obama: 2 Yr extension of Bush tax cuts, Div and payroll tax remain at 15%, 13 month extension of unemployment benefits, 2% cut in payroll taxes for 1 year, 1 yr cut in SS taxes, estates taxes 35% with 5 million exemption. Estimated cost: 450 to 600 bil over 2 years
12-10 Trade deficit fell 13.2% in Oct to 38.7 bil
12-13 Retail Sales +.8% in Nov x Autos +1.2%
Autos fell .8% Building Materials fell .1%
Producer Prices +.8% core +.35 Gasoline +4.7%
Business inventories +.7% to 1.42 trillion highest since Feb 2009

Noteable:
China PMI at a 7 month high
Iran and N. Korea defiant on Nukes
China to be aggressive on monetary controls
Treasury to sell all of its shares (2.4 billion) in CITI at public offering
Goldman Sacs forecasts 25% gain for stocks next year.,1650 for Gold, advises shorting the dollar
China increased bank reserves for 3rd time in a month to 18.5%
China trade deficit with US fell 8.3%
China inflation expected to be 5.1%
Nasdaq rose for 8th day in a row to new highs
12- 17 Tax cuts extended. Tea party defeats appropriation spending bill.
12-20 State deficits and decling Federal money to hurt economy

Stock Market Trends

Mikey Short term up 12-6 11362
Mikey Intermediate Trend: Up 09/03/10 10477
Mikey Long term trend: UP 10/13/10 11052
IBD : 12-21 Market in confirmed uptrend 11478

Short Term Trading Indicators

Mikey OB/OS index (80 OB 20 OS) .94 (market very OB )
Put/Call Ratio(.6 OB 1.2 OS).29
10 day average .60
Ratio Put Premiums/Call Premium  (extremes .60/ 1.54) .59
Put Premium 10 day average .56
Sentiment Total Score: Put/call + premium ratio = .88
10 day Sentiment Total Score: Put/call + premium ratio =1.16
Williams %R 12 day -20.43, Weekly -5.15
% Advisory Service Bulls 56.8 Bears 20.5  Bull/Bear ratio 2.77
Mikey Thrust indicator: Daily 8 Weekly 10 (1 low, 10 max) 18,-2
DJIA MACD 95.76 Rising/ Positive  cross 12-3
NYSE New Highs 208 New Lows 23 
NASDAQ New Highs 226 New Lows 28
NYSE Advance-Decline -52 NASDAQ Advance-Decline -110
Mikey A/D line.(from 9/17/10). NYSE +11806  NASDAQ +6647
NYSE % above 200 day ave:  69%

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

Comments:
12-3 MACD Positive cross
IBD market in confirmed uptrend
12-6 Power numbers turn positive
Mikey short term up
12-7 Extermely low sentiment numbers...very overbought
Possible Metals reversal
Conclusions: Upside Price trend resumes 
12-14 AD line and NH/NL do not confirm DJI new high
New lows hit a 1 month high
30 year bonds return to April lows (amid Fed buying??????)
12-15 IBD Market under pressure
12-17 Gold MACD second negative cross RSI 46
New highs, AD line non confirm new high in DJIA
Options expire
12-20 Nasdaq rallies to new high for 3rd straight day.
IBD  market in confirmed uptrend

Moving Averages

5 day 11480 Rising/Price above 
20 day 11312 Flat/ Price above 
50 day 11227 Rising/Price above
200 day 10700 Rising/Price above
20 week 10944 Rising/Price above
50 week 10642 Rising/Price above
90 week 10057 Rising/Price above
200 week 10918 Falling/Price above

World Markets, Commodities, Currencies

DJIA 81 Emer Mkts 59 China 39, Brazil 53 Europe 58 Russia 75 
Japan 59, Korea 80, India 67, Australia 58  Germany 37, Spain 60, UK 79
Oil 64, Nat Gas 40, Gasoline 54,
Gold 61, Copper 73,  Silver 59, Platinum 76
USD 54, Aussie 61, Euro 62, Brit Pd 44, Yuan 44, Yen 51
Grains 54, DBC 67

US Industry Groups (relative strength)
(Uptrend , Downtrend , Neutral )
 23 up, 6 Neutral, Downtrend 1 Score +22

Homebuilders (XHB) 69,  Real Estate (IYR) 53, Finance (XLF) 61, Insirance 69 (IAK), Broker/Dealers ( IAI) 68, Retail (XRT) 68, Consumer Disc (XLY) 64, Consumer Staple (XLP) 62, Health (XLV) 61, Pharma (IHE) 71, Biotech (PBE )79, Transports (IYT) 58, Aerospace (ITA) 59, SEA (Shipping) 39, Airlines ($XAL) 45, ,Utilities (XLU) 47  , Metals and Mining(XME) 66 Copper (COPX) 61, Nat Gas Production (FCG ) 64,Oil Expl and Prod (IEO) 68, Oil Service (OIH 64),  Coal (KOL) 60 Energy (XLE) 66, Gold Miners (GDX) 51, Steel  (SLX) 67, Basic Mat (XLB) 67, Tech (XLK) 61, Semiconductors (SMH) 60, Software (SWH) 69, Networking (PXQ) 67



Bonds (Relative Strength)
 (0 up, 7 down, 2 neutral) Score -7
MUB (Natl Muni) 38 NCA(Ca Muni) 33 
BND (Total Bond Index) 41 BWX (International Treas Bonds) 40, PCY (Emerg Mkt Debt) 27
TLT (20+ US Treasuries) 42, IEF ( 10 yr Treasuries) 38, PFF (US preferred) 26, HYG (High Yield) 52,

I am dropping the 2X ETF's from my posts. I will concentrate on industry sectors and post in relative strength numbers. The same method applies. A number below 40 is considered a sell and a number above 60 is considered a buy. This is for quick reference only and other data is consider before I trade.

The following conditions exist in an uptrend
1) The 20 day is above the 50 day
2) The MACD is above zero and has a posiitve cross. Meaning that the fast line is above the signal.
3) The relative strength is greater than 60.

The following conditions apply to a downtrend. :
1) the 20 day is below the 50 day
2) The MACD is below zero and there is a negative cross
3) The relative strength is below 40

The relative strength numbers are a guide to the short term condition of the stock the trend may still be up as the relative strength number is below 40. The trend  is a consideration I take into account when I put on a trade. It is not the only thing I am watching. I do take into consideration non-confirmations on the MACD, Relative Strength, New highs and Lows,  and Advance Decline line. I also consider the IBD opinion of the current state of the market. Sentiment and my economic opinions are used when I trade.

I will say that my economic opinions are very early. Many things can be done to extend a market move. I do not have inside information. I am looking at the economy based on my experience. I have learned that strange things can be done to drag on a move. Generally speaking, the trend should be the major focus for most traders.

 I consider public opinion as a strong indicator.  They are the bag holders. The ones that have to be convinced that a move will never change before it does. The public will tell you what they think and you can pretty well guess what they do think by listening to the news. The news grinds out a daily message that will convince the public that the message that the system is sending is not to be questioned. That Where's Waldo section of my blog is what the public knows and is doing with their money. They can be right for long periods but in the end they will lose. That is a sure thing.

The trick is to wait until the message is fully accepted by the public and the experts and then the trend changes. It is a combination of those thing that I watch. Reality and value mean nothing is this game. It is a game of passing the buck. The last one gets left holding the bag. It requires patience and discipline.

Notes: IBD has turning to confirmed uptrend from market under pressure. I still show that the market is in an uptrend and very overbought. The MACD indicator is not confirming the new highs in the DJIA and neither is the advance decline line or new highs. The trend is still up but looks old and tired.

Mikey