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

Friday, January 21, 2011

Market internals show weakness spreading Caution light is on

DJIA 11871.84 +49.04 SPX  1283.35 +3.09 NASDAQ 2689.54 -14.95
DJT 5045.62 -35.20  DJU 413.34 -.37  VIX 18.47
US Gov rates: 6 mo .183%  2 yr .6128 % 10 yr 3.40 -.03 4.56 -.03
Gold 1341.90 -4.60 Silver 27.50 +.03 Copper 4.31 +.03  Platinum 1830.70 +13.40
Oil 89.10 -.49 RBOB 2.48 +.06 Nat Gas 4.72 +.03
Aussie .9924 +.0025 EURO 1.3562 +.0142 Pound 1.5714 +.0107
USD Index 78.12 +.14  DBC 27.96 +.28  
Days to option expiration: Options expire today

Long Term Opinions:

US Bonds: Major long term top forming. .... Current trend down
Muni Markets: Rough times ahead: 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 weakening
Commodities: Bear market rally ending..... Current trend up weakening
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 down
Emerging Markets Debt: A disaster.... Current trend down
World economy: Current trend slowing
World political environment: Tension, aggravated
Where's Waldo: Waldo is buying Gold, Foreign Bonds and Emerging Markets.

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
Mikey current trend opinion: 1-21 (DJI 11871) The caution light is on for this uptrend : divergences, weak action in leadership, at major resistence area, showing weakness from extreme overbought condition
IBD : 1-20 Market under pressure


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

Short Term Trading Indicators


Mikey OB/OS index (80 OB 20 OS) .86 (market very OB )
Put/Call Ratio(.6 OB 1.2 OS).75
10 day average .74
Ratio Put Premiums/Call Premium  (extremes .60/ 1.54) .66
Put Premium 10 day average .54
Sentiment Total Score: Put/call + premium ratio = 1.41
10 day Sentiment Total Score: Put/call + premium ratio =1.28
Daily-Weekly=+.13
Williams %R 12 day -9.71, weekly -3.29
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 117.40 flat /Positive cross 1-18
NYSE New Highs 81 New Lows 12
NASDAQ New Highs 60 New Lows 21
NYSE Advance-Decline +154  NASDAQ Advance-Decline -476
Mikey A/D line.(from 9/17/10). NYSE 15179 NASDAQ +5698
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
1-20 Google blows away earnings estimate
1-20 IBD goes to market under pressure
1-20 AAPL selling off on big volume
1-21 Mikey Caution light is on for this uptrend
1-21 Google stocks reverse lower on big volume

 Options expire

Moving Averages

5 day 11872 Rising/Price above
20 day 11691 Rising/ Price above 
50 day 11452 Rising/Price above
200 day 10797 Rising/Price above
20 week 11239 Rising/Price above
50 week 10765 Rising/Price above
90 week 10218 Rising/Price above
200 week 10908 Flat/Price above

World Markets (Power Numbers) Ave score 49
DJIA 58 Emer Mkts 29 China 51, Brazil 33 Europe 63  Russia 57  Japan 54 Korea 49, India 37, Australia 45  Germany 55, Spain 73  UK 38

Commodities (Power Numbers)
Oil 38, Nat Gas 57, Gasoline 57,
Gold 35, Copper 37,  Silver 26, Platinum 61
Grains 55 DBC 64


Currencies (Power Numbers)
USD 38, Aussie 34 Euro 57 , Brit Pd 89, Yuan 49, Yen 53

US Industry Groups (relative strength) Ave Score 51

10 up, 20 Neutral, Downtrend 3 Score +7

Homebuilders (XHB) 52,  Real Estate (IYR) 57, Finance (XLF) 60, Insurance (IAK) 54 , Broker/Dealers ( IAI) 58, Retail (XRT) 43, Consumer Disc (XLY) 56, Telecom (IYZ) 40, Consumer Staple (XLP) 62, Health (XLV) 61, Pharma (IHE) 44, Biotech (PBE ) 42, Transports (IYT) 42 Aerospace (ITA) 70, Shipping (SEA) 37, Airlines ($XAL) 36, ,Utilities (XLU) 64 , Metals and Mining( XME) 40, Copper (COPX) 47, Nat Gas Production (FCG ) 60,Oil Expl and Prod (IEO) 61 Oil Service (OIH) 57,  Coal (KOL) 41,  Energy (XLE) 64, Gold Miners (GDX) 30, Steel  (SLX) 53, Basic Mat (XLB) 43, AgriBusiness (MOO) 54, Tech (XLK) 56, Semiconductors (SMH) 61, Software (SWH) 67 Networking (PXQ) 41, Internet (FDN) 43


Bonds (Relative Strength)
 (1 up, 1 down, 7 neutral) Score 0

MUB (Natl Muni) 46 NCA(Ca Muni) 42 
BND (Total Bond Index) 47 BWX (International Treas Bonds) 58, PCY (Emerg Mkt Debt) 33 TLT (20+ US Treasuries) 44, IEF ( 10 yr Treasuries) 46, PFF (US preferred) 54, HYG (High Yield) 63

The large caps are holding up while the smaller growth sectors are showing weakness. The NYSE had 175 advances today and the NASDAQ listed 476 declines. The DJIA closed at a new high but the A/D line is
at a point that is 200 points lower. The A/D line on the NASDAQ is at a point where it was in the beginning of December.  In other words, the market averages are diverging and showing a false picture of the broad market.

The Gold, Silver, Copper and oil markets are now in sell mode. The dollar is trying but has not been able to reverse its Sept breakdown. It has taken a back seat to the need to bailout Europe again.  The commodities seem to be following the dollar but in a delayed move. I am thinking that everything including the DJI is going to go to their 200 day averages. Even beloved AAPL is getting questioned about its new competition.

The economic news is just peachy now and Obama has appointed a new jobs Czar, the CEO of GE. That means his economic advisor is an ex Wall Streeter, his Treasury Secretary is ex NY Fed,  and his job Czar is the GE CEO. He is not hiding who he owes his Presidency to,  is he?

The choice of GE CEO Jeff Immelt is interesting. GE received 139 billion in bailouts from the taxpayers in the form of backing GE capital in 2009. The irony in making him the job Czar is that eliminated 18000 jobs at GE despite receiving millions in subsidies  like the 60 million to to build the technology center in Michigan and 455 million to build a hybrid locomotive battery plant in New York.  Will he create new jobs? It doesn't matter they make up the numbers anyway.

The GOP (The Grinch) expect the states and local governments to beg (their words) Congress for relief from their underfunded pension programs soon. Their plan is to deny bailout, and to create a manage bankruptcy bill for the states to "deal" with the problem. Read that to mean trash public pensions and continue to make unions obsolete.

This sounds exactly like what has happened to every industry in the United States since free trade became the economic religion. If the states could only print money like the good old boys in Congress then I guess they could be responsible and not beg. The mantra will be save the states and make those greedy pensioners bow down like the rest of us did.

The financial boys will make tons of money screwing the pensioners believe me. Those Muni bonds should be going up and down like a yo yo. Each crisis will produce will price swings before the public unions crack. Union representation is now 36.2% while the the number is 6.9% in the private sector. The process will now attack the public sector as Obama makes the US a "world competitor" for the new world order. That giant sucking sound will be the money coming out the pensioners pockets no doubt to save the economic recovery. The story seems to heading in that direction.

I updated my profile today. Space limits what I can say but I think you will get the picture.

Mikey
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)