New highs not confirming move...Groundhog day continues

DJIA 11499.25 +41.78 SPX  1242.87 +7.64 NASDAQ 2637.31 +20.09
IBD 291.03 +1.05 DJT 5087.30 +67.50 DJU 400.51 +3.81  VIX 17.94
US Gov rates: 6 mo .183%  2 yr .6532% 10 yr 3.48 -.01 30yr 4.56 +.02
Gold 1371 -15.70 Silver 28.77 -.55 Copper 4.11 -.06-Platinum 1698.50 -4.90
Oil 88.62 -.26 RBOB 2.31 +.01 Nat Gas 4.22 -.03
Aussie .9909 +.0038 EURO 1.3186 +.0019 Pound 1.5548 +.0091
USD Index 80.55 -.03  DBC 26.27 -.09  
Days to option expiration 2 Day 18 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

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 : 12-15 Market under pressure 11458
Short Term Trading Indicators

Mikey OB/OS index (80 OB 20 OS) .90(market very OB )
Put/Call Ratio(.6 OB 1.2 OS).33
10 day average .63
Ratio Put Premiums/Call Premium . (extremes .60/ 1.54) .61
Put Premium 10 day average .54
Sentiment Total Score: Put/call + premium ratio = .94
10 day Sentiment Total Score: Put/call + premium ratio =1.17
Williams %R 12 day -3.87, Weekly -2.30
% Advisory Service Bulls 56.8 Bears 20.5  Bull/Bear ratio 2.77 Advisors very bullish
Mikey Thrust indicator: Daily 9 Weekly 9 (1 low, 10 max) 18,-0
DJIA MACD 89.19 Rising/ Positive  cross 12-3
NYSE New Highs 126 New Lows 26 New highs not expanding
NASDAQ New Highs 169  New Lows 21
NYSE Advance-Decline +1082 NASDAQ Advance-Decline +986
Mikey A/D line.(from 9/17/10). NYSE +11515 Non confirmation  NASDAQ +6618
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
12-6 Power numbers turn positive
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??????)
12-17 Gold MACD second negative cross RSI 46
New highs non confirm new high in DJIA

Moving Averages

5 day 11454 Rising/Price above 
20 day 11283 Flat/ Price above 
50 day 11026 Rising/Price above
200 day 10391 Rising/Price above
20 week 10903 Rising/Price above
50 week 10625 Rising/Price above
90 week 10019 Rising/Price above
200 week 10924 Falling/Price above

Mikey Power Index (MPI)
(Uptrend = +, Downtrend = -, Neutral = 0)

World Markets, Commodities, Currencies

DJIA 75 Emer Mkts 59 China 46, Brazil 48 Europe 56 Russia 73 
Japan 63, Korea 64, India 70, Australia 60  Germany 26, Spain 55, UK 72
Oil 70, Nat Gas 36, Gasoline 53,
Gold 64, Copper 72,  Silver 58, Platinum 68
USD 55, Aussie 48, Euro 60, Brit Pd 30, Yuan 48, Yen 45
Grains 55, DBC 59

US Industry Groups (relative strength)
(Uptrend , Downtrend , Neutral ) 8 up, 6 Neutral, Downtrend 1 Score +7
Homebuilders(XHB) 69 Basic Mat (XLB) 66, Energy (XLE) 66 Finance (XLF) 60, Tech (XLK) 62, Retail (XRT) 65 Health (XLV) 65, Airlines ($XAL) 41, Gold Miners (GDX) 49, Real Estate IYR) 43. Consumer Disc(XLY) 63, Consumer Staple (XLP) 71, Metals and Mining(XME) 63, Transports ($DJT) 58, Utilities (XLU) 53

Bonds  (0 up, 7 down, 2 neutral) Score -7
MUB (Natl Muni) 33 NCA(Ca Muni) 41 
BND (Total Bond Index) 30 BWX (International Treas Bonds) 37,PCY (Emerg Mkt Debt) 25
TLT (20+ US Treasuries) 35, IEF ( 10 yr Treasuries) 31, PFF (US preferred) 30, HYG (High Yield) 49,

2X ETF  Short Score 707(1 up, 5 Neutral, 12 down) Score -11
DXD 24, SDS 40, DZZ 48, ZSL 46, DUG 41  EEV 51, FXP 55, SMN 42, CMD 32, SKF 34, SRS 56 SZK 34, QID 46, SCO 36, RXD 4 TBT 76, SDP 10, REW 32
Green=up, Red= down, Black = neutral

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 1117 (11 up 7 neutral 0  down) Score +11

DDM 67 SSO 61, UGL 58 AGQ 48, DIG 61 ,EET 51 XPP 43, UYM 68 UCD 74, UYG 71, URE 54 UGE 88 QLD 58, UCO 70  RXL 75, ROM 65 UBT 49, UPW 56
Green=up, Red= down, Black = neutral

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 Ultra Nasdaq 100, UCO=Ultra Crude Oil, RXL=Ultra Healthcare, UBT Ultra 20+ Year Treas, UPW=Ultra Utilities, ROM=Ultra Technology


Total Score (uptrend is positive) +410 uptrend

The market is very overbought and new highs are not confirming the new highs in the averages. I see market leaders breaking their 50 day averages which tends to happen before a sell off. Still at this point there is no sell signal. The dollar has been persistently strong and the easy Fed story is not jiving with the weak bond markets. Muni markets are extremely weak which can't be a good thing.

The advisers are still very bullish and the same old story about the recovery, the easy Fed,  and inflation is being told. I am hearing Gold commercials from every possible source now and the public has been completely brainwashed about the weak dollar and the need to buy gold. Its groundhog day but the steam is coming out of the story.

 I was watching the evening news a few nights ago and the market had sold off because of a "strong dollar which hurt US companies doing business overseas". That about tells the whole story doesn't it? The business is overseas and a strong dollar hurts the "US" corporations. I think the word "US" corporations is not accurate. They moved their business and jobs overseas with the giveaway , by our elected representatives, created by the Free Trade laws.  The term Free Trade only applies to the corporations. It has cost the US Treasury plenty to create this free trade. The chickens are coming home to roost on this one too.

 Like everything the corporations do they have overdone free trade and the world economy is going to suffer.  The US stock market is really the overseas stock market and they are quickly running out of tricks to keep it going. I still see the lows of March 2009 being taken out when reality finally kicks in. The inflation story is also way out on a limb now and I see weak commodities and a much lower Gold price. The public will be left holding the bag again.

Mikey