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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, January 3, 2011

Stocks Party on on 2011 first day

DJIA 11670.75 +93.24 SPX  1271.89 +14.25 NASDAQ  2691.52 +38.65  
DJT 5174.93 +68.18 DJU 406.58 +1.59 VIX 17.61
US Gov rates: 6 mo .183%  2 yr .5973% 10 yr 3.34  30yr 4.40+.07
Gold 1422.90 +1.50 Silver 31.05 +.17 Copper 4.45 +.09 Platinum 1786.40 +13.40
Oil 91.55 +.16 RBOB 2.43 -.02 Nat Gas 4.65 +.25
Aussie 1.0169 -.0097 EURO 11.3297 -.0012 Pound 1.5392 -.0185
USD Index 79.28 -.01 DBC 27.67 +.12
Days to option expiration 10 Day 11 of Jan Expiration 1-15

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 up stalled
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 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:

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
(Prices trading below these breakouts are considered trend reversals)


Short Term Trading Indicators


Mikey OB/OS index (80 OB 20 OS) .89 (market very OB )
Put/Call Ratio(.6 OB 1.2 OS).66
10 day average .62
Ratio Put Premiums/Call Premium  (extremes .60/ 1.54) .56
Put Premium 10 day average .58
Sentiment Total Score: Put/call + premium ratio = 1.22
10 day Sentiment Total Score: Put/call + premium ratio =1.20
Daily-Weekly= +02
Williams %R 12 day -14.03, Weekly -5.64
% Advisory Service Bulls 56.8 Bears 20.5  Bull/Bear ratio 2.77
Mikey Thrust indicator: Daily 9 Weekly 9 (1 low, 10 max) 18,-0
DJIA MACD 104.56 Rising/Positive cross 1-3
NYSE New Highs 373 New Lows 2
NASDAQ New Highs 290 New Lows 3
NYSE Advance-Decline +1445 NASDAQ Advance-Decline +1417
Mikey A/D line.(from 9/17/10). NYSE +16300 NASDAQ +8290
NYSE % above 200 day ave: 78%

Support: 1220 SPX, 11258 DJIA Breakout 9/20
Resistance: 1305 SPX; 11867 DJIA
Downside reversal 1207 SPX, DJIA 11276

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


Moving Averages

5 day 11599 Rising/Price above 
20 day 11495 Rising/ Price above 
50 day 11317 Rising/Price above
200 day 10742 Rising/Price above
20 week 11081 Rising/Price above
50 week 11307 Rising/Price above
90 week 10691 Rising/Price above
200 week 10912 Falling/Price above

World Markets, Commodities, Currencies (Power Numbers)


DJIA 82 Emer Mkts 63 China 36, Brazil 62 Europe 56  Russia 75 
Japan 65, Korea 84, India 64, Australia 61  Germany 31, Spain 26 UK 59

Oil 62, Nat Gas 64, Gasoline 65,
Gold 60, Copper 74,  Silver 67, Platinum 66
Grains 65 DBC 71
Note: Nat Gas breaking out from base

USD 43, Aussie 61, Euro 54 , Brit Pd 44, Yuan 58, Yen 62

US Industry Groups (relative strength)
 21 up, 9 Neutral, Downtrend 0 Score +21

Homebuilders (XHB) 67,  Real Estate (IYR) 67, Finance (XLF) 72, Insirance (IAK) 67 , Broker/Dealers ( IAI) 67, Retail (XRT) 65, Consumer Disc (XLY) 64, Consumer Staple (XLP) 59, Health (XLV) 62, Pharma (IHE) 55, Biotech (PBE )57, Transports (IYT) 66 Aerospace (ITA) 66, Shipping (SEA) 56, Airlines ($XAL) 54, ,Utilities (XLU) 56  , Metals and Mining( XME) 72, Copper (COPX) 74, Nat Gas Production (FCG ) 75,Oil Expl and Prod (IEO) 77, Oil Service (OIH) 65,  Coal (KOL) 75,  Energy (XLE) 76, Gold Miners (GDX) 51, Steel  (SLX) 67, Basic Mat (XLB) 75, Tech (XLK) 68, Semiconductors (SMH) 58, Software (SWH) 68, Networking (PXQ) 67



Bonds (Relative Strength)
 (0 up, 0 down, 9 neutral) Score 0
MUB (Natl Muni) 46 NCA(Ca Muni) 48 
BND (Total Bond Index) 42 BWX (International Treas Bonds) 57, PCY (Emerg Mkt Debt) 43 TLT (20+ US Treasuries) 46, IEF ( 10 yr Treasuries) 43, PFF (US preferred) 49, HYG (High Yield) 59,

The stock market partied on the first trading day of the new year. 21 of my industry groups are in an uptrend and 9 are neutral. All commodities including Nat Gas are uptrending. Most overseas stock markets are  also in an uptrend with Korea the strongest and China Germany and Spain the weakest. All my indicators have been overbought for some time now and in my opinion the markets are ripe for at least a correction and more than likely an intermediate top. A reversal would be a close below 1207 on SPX and 11276 on DJIA.


Mikey



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