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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

Friday, February 18, 2011

Opions expire at market highs

DJIA 12391.25 +73.11 SPX 1343.01 +2.58 NASDAQ 2833.95 +2.37
Russell 2000 834.82+.80  DJT 5296.20 -1.90 DJU  411.13 -.10 VIX 16.43
US Gov rates: 6 mo .137%  2 yr .751% 10 yr 3.58 -.01 30 yr 4.69 -.01 
Gold 1388.60 +3.50 Silver32.29 +.72 Copper 4.48 uch Platinum 1844
Oil 86.20 -.16    RBOB 2.55 +.03 Nat Gas 3.87 +.01
Aussie 1.0170 +.0036  EURO 1.3632 +.0079 Pound 1.6137 +.0065
USD Index 77.72 -.34 DBC 28.69 -.03
Days to option expiration: 1

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 up
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) .94  Overbought
Put/Call Ratio(.6 OB 1.2 OS)..80       10 day average .72
Ratio Put Premiums to Call Premium (..34 to 2.5) .49      10 day ave .54
Mutial Fund  Purchase/Redemptions ( 1.5 to .66)  1.15   
Williams %R 12 day -000 weekly .06
Bulls 53.4  Bears 23.3 Bull/Bear ratio 2.29 Bullish
Mikey Thrust indicator: Daily 10 Weekly 10 (1 low, 10 max) 20, -1 ...At the top
DJIA MACD 165.89  Rising/Positive cross 1-18
NYSE New Highs 352(12/7 429)  New Lows 7
NASDAQ New Highs 247 (12-7 352) New Lows 14
NYSE Advance-Decline +446 NASDAQ Advance-Decline +62
Mikey A/D line (2/18 24526). NYSE +24526  NASDAQ ( 2-18, 10095 ) +10095
NYSE % above 200 day ave  80%

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
2-18 options expire

Moving Averages

5 day 12298 Rising/Price below
20 day 12125 Rising/ Price above 
50 day 10385 Rising/Price above
200 day 10906 Rising/Price above
20 week 11452 Rising/Price above
50 week 10908 Rising/Price above
90 week 10385 Rising/Price above
200 week 10898 Rising/Price above

Trends Green up, Red Down, Black neutral

World Markets (Power Numbers) Ave score 61

DJIA 74, Canada 68 
Latin Amer 53 Mexico 34 Brazil 48
Europe 71 UK 71 Germany 73 Spain 60  Russia 52 
China 44 Japan 62  Korea 32, Singapore 39, Taiwan 37  India 51 Australia 49
Emer Mkts 49 Total World market Index 65


Commodities (Power Numbers)
Oil 45, Nat Gas 17, Gasoline 67
Gold 67 Copper 55 Silver 85, Platinum 48
Grains 49 DBC 58


Currencies (Power Numbers)
USD 36 Aussie 73 Euro 56 , Brit Pd 65, Yuan 74, Yen 39

US Industry Groups (relative strength) Ave Score  63
24 up, 11Neutral, Downtrend 0 Score +24
Homebuilders (XHB) 62,  Real Estate (IYR) 71, Finance (XLF) 68, Regional Banks (IAT) 61 Insurance (IAK) 69 , Broker/Dealers ( IAI) 71, Retail (XRT) 68, Consumer Disc (XLY) 74, Telecom (IYZ) 56, Consumer Staple (XLP) 64, Health (XLV) 68, Pharma (IHE) 58, Biotech (PBE ) 52, Transports (IYT) 65 Aerospace (ITA) 73, Shipping (SEA) 55, Airlines ($XAL) 45, ,Utilities (XLU) 52 , Metals and Mining( XME) 61, Copper (COPX) 46, Nat Gas Production (FCG ) 67, Oil Expl and Prod (IEO) 71 Oil Service (OIH) 72,  Coal (KOL) 51,  Energy (XLE) 74, Gold Miners (GDX) 62 Steel  (SLX) 58/, Basic Mat (XLB) 61, Timber (Wood) 62 AgriBusiness (MOO) 55, Tech (XLK) 67, Semiconductors (SMH) 73, Software (SWH) 71 Networking (PXQ) 66, Internet (FDN) 55



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

MUB (Natl Muni) 58 NCA(Ca Muni) 48 
BND (Total Bond Index) 47 BWX (International Treas Bonds) 59, PCY (Emerg Mkt Debt) 34 TLT (20+ US Treasuries) 44, IEF ( 10 yr Treasuries) 45, PFF (US preferred) 72, HYG (High Yield) 64

 
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