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

Thursday, January 20, 2011

Another distribution day for the Market..Gold heads for the border (200 day)

DJIA 11822.80 -2.49 SPX  1280.26 -1.66 NASDAQ 2704.29 -21.07
DJT 5080.82 +2.40 DJU 413.71 +2.40 VIX 17.99
US Gov rates: 6 mo .167%  2 yr .6168 % 10 yr 3.43 +.10 4.59 +.06
Gold 1346.50 -23.50 Silver 27.47 -1.32 Copper 4.28 -.09  Platinum 1817.40 -20.40
Oil 89.59 -1.27 RBOB 2.42 -.06 Nat Gas 4.69 +.11
Aussie .9899 -0127 EURO 1.3421+-0004 Pound 1.5807 -.0089
USD Index 78.98 +.17 DBC 27.68 -.28
Days to option expiration 2 Day 23 of Jan Expiration 1-21

Long Term Opinions:

Bonds: Major long term top forming. .... Current trend down
Stocks: Secondary bear market rally ending......  Current trend up 
Gold: Primary top forming crash expected.....  Current trend down
Oil : Secondary bear market rally ending..... Current trend up
Commodities: Bear market rally ending..... Current trend up
Real Estate: Bottoming ..... Current trend down
US Dollar: Major long term bottom forming .....Current Trend down 1-18
US Economy: Double dip coming .....Current trend up
Emerging Markets: Bear market rally ending..... Current Trend Neutral
World economy: Current trend slowing
World political environment: Tension, aggravated
Where's Waldo: Waldo is buying Gold, Foreign Bonds and Emerging Markets.

Economy:
Earnings season starts will good reports
Noteable:

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

Oil upside breakout 12-1-10 @87.42 USO 37.29
Gold upside breakout 9-22-10 @1283.50 GLD 123.11
Dollar Index breakdown 9-21-10 @81.17  UUP 23.52
(Prices trading below these breakouts are considered trend reversals)

Short Term Trading Indicators


Mikey OB/OS index (80 OB 20 OS) .88 (market very OB )
Put/Call Ratio(.6 OB 1.2 OS).86
10 day average .73
Ratio Put Premiums/Call Premium  (extremes .60/ 1.54) .56
Put Premium 10 day average .53
Sentiment Total Score: Put/call + premium ratio = 1.42
10 day Sentiment Total Score: Put/call + premium ratio =1.26
Daily-Weekly=+.16
Williams %R 12 day -12.71, weekly -3.92
Bulls 56 Bears 20.9 Bull/Bear ratio 2.67
Mikey Thrust indicator: Daily 9 Weekly 10 (1 low, 10 max) 19, -1
DJIA MACD 114.30 flat /Positive cross 1-18
NYSE New Highs 45 New Lows 27
NASDAQ New Highs 36 New Lows 20
NYSE Advance-Decline -721 NASDAQ Advance-Decline -1177
Mikey A/D line.(from 9/17/10). NYSE 15025  NASDAQ +6174
NYSE % above 200 day ave  76%

Support: 1220 SPX, 11258 DJIA Breakout 9/20
Resistance: 1305 SPX; 11867 DJIA
Downside reversal 1207 SPX, DJIA 11200, NASDAQ 2550

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.
12-21 IBD  market in confirmed uptrend
12-27 New highs in A/D lines for both N/H N/L lagging
12-31 Negative MACD cross
1-3 New highs on averages and A/D line N/H N/L Still off Nov 4 highs
1-4 Gold drops $44 Oil 2.17 Commodities showing weakness
Market sells off on higher volume DJIA up
Dollar holds 50 day average turns up
1-7 Foreign markets showing weakness. India in a downtrend
Dollar nears intermediate reversal levels up
Bad news in Europe surfaces again
1-10 MACD Negative cross
World markets give sell signal
1-12 New highs in DJI and NASDAQ confirmd by AD Line.
1-13 New lows expand on NYSE to 111
1-14 New highs confirmed by AD line
1-18 AAPL blows away earnings
1-19 Big distribution day NYSE 1646 net declines Nasdaq 1758 net declines

Moving Averages

5 day 11801 Rising/Price above
20 day 11676 Rising/ Price above 
50 day 11442 Rising/Price above
200 day 10793 Rising/Price above
20 week 11237 Rising/Price above
50 week 10764 Rising/Price above
90 week 10218 Rising/Price above
200 week 10906 Flat/Price above

World Markets (Power Numbers) Ave score 47
DJIA 58 Emer Mkts 34 China 52, Brazil 39 Europe 58  Russia 55  Japan 56, Korea 56, India 37, Australia 41  Germany 48, Spain 67  UK 35
Commodities (Power Numbers)
Oil 38, Nat Gas 57, Gasoline 50,
Gold 37, Copper 38,  Silver 33, Platinum 56
Grains 51 DBC 59


Currencies (Power Numbers)
USD 39, Aussie 31 Euro 53 , Brit Pd 83, Yuan 49, Yen 52

US Industry Groups (relative strength) Ave Score 53
8 up, 22 Neutral, Downtrend 3 Score +5

Homebuilders (XHB) 57,  Real Estate (IYR) 55, Finance (XLF) 57, Insurance (IAK) 52 , Broker/Dealers ( IAI) 56, Retail (XRT) 46, Consumer Disc (XLY) 55, Telecom (IYZ) 39, Consumer Staple (XLP) 61, Health (XLV) 61, Pharma (IHE) 48, Biotech (PBE ) 46, Transports (IYT) 45 Aerospace (ITA) 71, Shipping (SEA) 42, Airlines ($XAL) 39, ,Utilities (XLU) 65 , Metals and Mining( XME) 46, Copper (COPX) 48, Nat Gas Production (FCG ) 58,Oil Expl and Prod (IEO) 59 Oil Service (OIH) 58,  Coal (KOL) 47,  Energy (XLE) 62, Gold Miners (GDX) 32, Steel  (SLX) 49, Basic Mat (XLB) 44, AgriBusiness (MOO) 51, Tech (XLK) 62, Semiconductors (SMH) 64, Software (SWH) 71 Networking (PXQ) 42, Internet (FDN) 49


Bonds (Relative Strength)
 (0 up, 3 down, 6 neutral) Score -3

MUB (Natl Muni) 37 NCA(Ca Muni) 34 
BND (Total Bond Index) 43 BWX (International Treas Bonds) 50, PCY (Emerg Mkt Debt) 33 TLT (20+ US Treasuries) 40, IEF ( 10 yr Treasuries) 42, PFF (US preferred) 51, HYG (High Yield) 57

Gold gaps down today and is chasing the GDX ( Gold Miners Index) which hit its 200 day today. The 200 day for Gold is at 1272.  Oil also gapped down and is in danger of reversing its uptrend. The NASDAQ has been extremely weak the last two days with back to back decline days of over 1000. The number of new highs for the NASDAQ was a measly 36 today. The NYSE also had net declines of 721 today even though the DJI did not show it. It looks like the "risk" trade is on its death bed and that means that all and I mean all investors are standing on the edge of a cliff.

Mikey
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