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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, February 14, 2011

DJIA 12268.19 -5.07 SPX 1332.32 +3.17 NASDAQ 2817.18 +7.74
Russell 2000 825.90 +3.17 DJT 5217.90 -17.61 DJU  409.76 -3.58 VIX 15.95
US Gov rates: 6 mo .157%  2 yr .851% 10 yr 3.64 +.02 30 yr 4.68 -.01
Gold 1365.10 +4.70  Silver 30.54 +.55  Copper 4.63 +.10 Platinum 1827.60 +14.10
Oil 84.81 -.77  RBOB 2.52 +.06 Nat Gas 3.92 +.01
Aussie 1.0049 +.0018 EURO 1.3434 -.0063 Pound 1.5944 +.0032
USD Index 78.71 +.21  DBC 28.79 +.14
Days to option expiration: 4
Long Term Opinions:

US Bonds: Major long term top forming. .... Current trend down
Muni Markets: Bottoming : Current trend down
Stocks: At 2 year highs......  Current trend up 
Gold: Primary top forming .....  Current trend down
Silver: Blow out top....Current trend up
Oil : Secondary bear market rally ending..... Current trend Neutral
Commodities: Bear market rally ending..... Current trend up
Real Estate: Bottoming ..... Current trend down
US Dollar: Long term bottom forming .Current Trend down
US Economy: Proped up with debt.....Current trend up
China: Accident waitng to happen.. Current trend down
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, US Stocks.

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 :
IBD : Uptrend resumes 2-1


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) .97  Overbought
Put/Call Ratio(.6 OB 1.2 OS)..66   10 day average .72
Ratio Put Premiums to Call Premium (..34 to 2.5) .51   
Mutial Fund  Purchase/Redemptions ( 1.5 to .66)  1.15   
Williams %R 12 day -3.67 weekly -.1.29
Bulls 53.4  Bears 23.3 Bull/Bear ratio 2.29 Bullish
Mikey Thrust indicator: Daily 10 Weekly 10 (1 low, 10 max) 20, -0 ...At the top
DJIA MACD 165.10  Rising /Positive cross 1-18
NYSE New Highs 354 (12/7 429)  New Lows 11
NASDAQ New Highs 282 (12-7 352) New Lows 22
NYSE Advance-Decline +323 NASDAQ Advance-Decline +208
Mikey A/D line (2/14 22254). NYSE 22254  NASDAQ ( 2-14, 9290 ) +9290
NYSE % above 200 day ave  79%

Support: 1190 SPX, 11200 DJIA Breakout 9/20
Resistance: 1313 SPX; 13136 DJIA
Downside reversal 1270 SPX, DJIA 11800, NASDAQ 2679

Comments:
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
1-25 Consumer confidence strong, State of the Union message..overhall taxes
1-26 IBD Uptrend resumes, S&P, NASDAQ 2 year highs..Fed meets no changes Assets rally
1-28 Big distribution day second in 2 weeks
1-28 IBD uptrend under pressure
2-1 IBD uptrend resumes (3 rd change in past month)
2-3 Cramer says Gold decline over
2-4 DJI 4 th closing high in a row, NASDAQ closes at a new high, Transports 4% off highs
NASDAQ AD line lagging

Moving Averages

5 day 12248 Rising/Price above
20 day 12032 Rising/ Price above 
50 day 11746  Rising/Price above
200 day 10877 Rising/Price above
20 week 11523 Rising/Price above
50 week 10906 Rising/Price above
90 week 10383 Rising/Price above
200 week 10898 Rising/Price above

Trends Green up, Red Down, Black neutral

World Markets (Power Numbers) Ave score 51
DJIA 73, Canada 60 
Latin Amer 41 Mexico 36 Brazil 37
Europe 59 UK 65 Germany 72 Spain 58  Russia 60 
China 43 Japan 62  Korea 40, Singapore 39, Taiwan 36  India 43 Australia 48
Emer Mkts 44 Total World market Index 61

Commodities (Power Numbers)
Oil 39, Nat Gas 12, Gasoline 62
Gold 51 Copper 68, Silver 75, Platinum 49
Grains 59 DBC 69


Currencies (Power Numbers)
USD 46, Aussie 52 Euro 54 , Brit Pd 47, Yuan 58, Yen 37

US Industry Groups (relative strength) Ave Score  63
22 up, 13 Neutral, Downtrend 0 Score +22
Homebuilders (XHB) 58,  Real Estate (IYR) 70, Finance (XLF) 67, Regional Banks (IAT) 66, Insurance (IAK) 57 , Broker/Dealers ( IAI) 71, Retail (XRT) 68, Consumer Disc (XLY) 72, Telecom (IYZ) 67, Consumer Staple (XLP) 59, Health (XLV) 59, Pharma (IHE) 52, Biotech (PBE ) 51, Transports (IYT) 62 Aerospace (ITA) 71, Shipping (SEA) 53, Airlines ($XAL) 48, ,Utilities (XLU) 49 , Metals and Mining( XME) 61, Copper (COPX) 57, Nat Gas Production (FCG ) 65, Oil Expl and Prod (IEO) 69 Oil Service (OIH) 68,  Coal (KOL) 52,  Energy (XLE) 73, Gold Miners (GDX) 47 Steel  (SLX) 59, Basic Mat (XLB) 67, Timber (Wood) 64 AgriBusiness (MOO) 67, Tech (XLK) 67, Semiconductors (SMH) 73, Software (SWH) 70 Networking (PXQ) 72, Internet (FDN) 68



Bonds (Relative Strength)
 (2 up, 1 down, 6 neutral) Score +1

MUB (Natl Muni) 54 NCA(Ca Muni) 47 
BND (Total Bond Index) 41 BWX (International Treas Bonds) 40, PCY (Emerg Mkt Debt) 30 TLT (20+ US Treasuries) 43, IEF ( 10 yr Treasuries) 40, PFF (US preferred) 67, HYG (High Yield) 60

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