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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, March 25, 2011

Market rallies back to breakdown.

DJIA 12220.59 +50.03 SPX 1313.80 +4.14 NASDAQ 2743.06 +6.64
Russell 2000 823.85 +6.75 DJT 5207.57 +41.69 DJU 408.07 +.23 VIX 17.91
US Gov rates: 6 mo .1674%  2 yr .7356% 10 yr 3.43 +.04 30 yr 4.49 +.02
IEF(US10 yr) 93.17 -.25 TLT (US LT)92.17 -.23 MUB (LT Natl Muni)99.82 -.04
BND (Total Bond Mkt)80.18 -.11 HYG (High Yield)91.79 +.03
Gold 1426.2 -8.70 Silver 37.05 -.32 Copper 4.41 -.01  Platinum 1745.60 -14.40
Oil 105.40 -.20 RBOB 3.04 -.01 Nat Gas 4.40 +.16
Aussie 102.85 +0037 EURO 1.4017 -.0096  Pound 1.5915 -.0091
USD Index 76.48 +.59 DBC 30.32 +.08
Days to option expiration: 15

Current Trends

US Bonds: Current trend up
Muni Markets: Bottoming : Current trend Neutral
Stocks:   Current trend down
Gold: ..  Current trend up
Silver: ...Current trend up
Oil : ..... Current trend up
Commodities: .. Current trend up
Real Estate: ... Current trend down
US Dollar:  .Current Trend down
US Economy: Current trend up ..Slowing
China: .. Current trend down
Emerging Markets: ... Current trend down
Emerging Markets Debt: .. 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.
Notes: trend change in stocks and Bonds

Stock Market Trends

Mikey Short term down 3-14 11855
Mikey Intermediate Trend: Up 09/03/10 10477
Mikey Long term trend: UP 10/13/10 11052
Mikey current trend opinion: 3-15 Current trend down: 11855
IBD : IBD: 3-7 MARKET IN CORRECTION  12090


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) 89
Put/Call Ratio(.6 OB 1.2 OS) .84 10 day average .85
Ratio Put Premiums to Call Premium (..34 to 2.5)  .68    10 day ave .82
Mutial Fund  Purchase/Redemptions ( 1.5 to .66)  1.15   
Williams %R 12 day -5.61weekly -20.46
Bulls 50.6   Bears 22.4 Bull/Bear ratio 2.26 Bullish
Mikey Thrust indicator: Daily 9 Weekly 8 (1 low, 10 max)17, +1
DJIA MACD +2.76  Rising/Positive Cross  3-24
NYSE New Highs 210 (12/7 429)  New Lows 5
NASDAQ New Highs 138(12-7 352) New Lows 18
NYSE Advance-Decline +954 NASDAQ Advance-Decline +420
Mikey A/D line NYSE (3/3 25358)+25041 NASDAQ (2-18 10095) +6217
NYSE % above 200 day ave  74%

Support: 1182 SPX, 11200 DJIA Breakout 9/20
Resistance: 1330 SPX; 12258 DJIA

Comments:
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
2-16 Gold buy signal
2-18 options expire
2-21 Consumer confidence strong
2-22 IBD Uptrend under pressure 12212
2-22 MACD negative cross
3-1 Reversal day big distribution day 3rd in month
IBD Uptrend under pressure 12058
3-2 Weak bounce
3-8 IBD Market in correction
3-11 DJI Hits 50 day NASDAQ breaks 50 day at Jan lows
3-12 bounces off 50 day
3-14 Hard break of 50 day. Mikey trend change ..down
3-16 US long bonds uptrend
3-17 Snap back rally
3-18 options expire as mkt rallies
3-24 Continuation rally out of expiration
3-25 Market rallies back to break down. Mikey is OB at 89. Put/Call ratio .84 and .85 on 10 day which is neutral to oversold.
Moving Averages

5 day 12106 Rising/Price above
20 day 12047 Rising/Price below
50 day 12057  Rising/Price below
90 day 11770 Rising/Price above
200 day 11119  Rising/Price above
20 week 11724 Rising/Price above
50 week 11010 Rising/ Price above
90 week 10536 Rising/Price above
200 week 10873 Flat/Price above

Trends Green up, Red Down, Black neutral

World Markets (Power Numbers) Ave score  48
DJIA 56 Canada 52 Latin Amer 34 Mexico 60 Brazil 64
Europe 34 UK 37 Germany 29 Spain 57 Russia 54
China 58 Japan 44 Korea 60
Singapore 51 Taiwan 51 India 58  Australia 56
Emer Mkts 60 Total World market Index 54

Commodities (Power Numbers)
Oil 51 Nat Gas 71, Gasoline 64
Gold 55 Copper 34 Silver 65 Platinum 44
Grains 28 DBC 65

Currencies (Power Numbers)
USD 47 Aussie 53 Euro 51 Brit Pd 50 Yuan 38 Yen 62  

US Industry Sectors (relative strength) Ave Score 54
(5 up, 30 Neutral, 0 Downtrend)Score 3

Homebuilders (XHB) 56, Real Estate (IYR) 48, Finance (XLF) 48  Regional Banks (IAT) 44 Insurance
(IAK) 50, Broker/Dealers ( IAI) 47, Retail (XRT) 61 Consumer Disc (XLY) 53  Telecom (IYZ) 53 Consumer Staple (XLP) 56 Health (XLV)54, Pharma (IHE) 54, Biotech (PBE ) 52, Transports (IYT) 57 Aerospace (ITA) 56, Shipping (SEA) 50, Airlines ($XAL) 47, ,Utilities (XLU) 45, Metals and Mining( XME) 60, Copper (COPX) 52, Nat Gas Production (FCG ) 70, Oil Expl and Prod (IEO) 65 Oil Service (OIH) 55, Coal (KOL) 62, Energy (XLE) 61, Gold Miners (GDX) 56 Steel (SLX) 53 Basic Mat (XLB) 57 Timber (Wood) 57 AgriBusiness (MOO) 55, Tech (XLK) 51Semiconductors (SMH) 52, Software (SWH) 55 Networking (PXQ) 49 Internet (FDN) 56


Bonds (Relative Strength)
(1 up, 0 down, 8 neutral) Score 1

MUB (Natl Muni) 53 NCA(Ca Muni) 48 BND (Total Bond Index) 58 BWX (International Treas Bonds) 59, PCY (Emerg Mkt Debt) 55 TLT (20+ US Treasuries) 51, IEF ( 10 yr Treasuries) 47, PFF (US preferred) 56 HYG (High Yield) 54

Market rallies back to break down. Mikey is OB at 89. Put/Call ratio .84 and .85 on 10 day which is neutral to oversold. May need more time to work off last negative sentiment. Jobs numbers coming next week. A good number would be bad for the bulls.

Mikey
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