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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

Tuesday, March 29, 2011

Market punches through resistance... Mikey uptrend

DJIA 12279.01 +81.13 SPX 1319.44 +9.25 NASDAQ 2756.89 +26.21  
Russell 2000 829.49 +7.72 DJT 5261.9 +32.41 DJU 409.51  VIX 18.16
US Gov rates: 6 mo .1730%  2 yr .8210% 10 yr 3.49 +.05 30 yr 4.54 +.05
IEF(US10 yr) 92.92 -.28 TLT (US LT)91.65 -.65 MUB (LT Natl Muni)99.69 -.17
BND (Total Bond Mkt)79.74 -.39 HYG (High Yield)91.90 +.08
Gold 1416.20 -3.70 Silver 36.99 -.10 Copper 4.35 +.01  Platinum 1740.60 -7.20
Oil 104.79 +.81 RBOB 3.04 +.01 Nat Gas 4.26 -.11 
Aussie 1.0327 +.0050 EURO 1.4014 -.0021 Pound 1.5894 uc
USD Index 76.50 +.02  DBC 30.08 +.17
Days to option expiration: 13
Current Trends

US Bonds: Current trend up
Muni Markets: : Current trend Neutral
Stocks:  Current trend up

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 up 3-29 12279
Mikey Intermediate Trend: Up 09/03/10 10477
Mikey Long term trend: UP 10/13/10 11052
Mikey current trend opinion: 3-29 Current trend up 12279
IBD : IBD: 3-29 Market in confirmed uptrend



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) 87
Put/Call Ratio(.6 OB 1.2 OS) .70 10 day average .79
Ratio Put Premiums to Call Premium (..34 to 2.5)  .65    10 day ave .19
Mutial Fund  Purchase/Redemptions ( 1.5 to .66)  1.15   
Williams %R 12 day -.87 weekly -23.14
Bulls 50.6   Bears 22.4 Bull/Bear ratio 2.26 Bullish
Mikey Thrust indicator: Daily 10 Weekly 8 (1 low, 10 max)18, +1
DJIA MACD +30.87 Rising/Positive Cross  3-24
NYSE New Highs 120 (12/7 429)  New Lows 15
NASDAQ New Highs 111(12-7 352) New Lows 26
NYSE Advance-Decline +1151 NASDAQ Advance-Decline +892
Mikey A/D line NYSE (3/3 25358)+25641 (New High) NASDAQ (2-18 10095) +6689
NYSE % above 200 day ave  74%

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

Comments:
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.
3-28 P/C .61 10 day .82 Mikey rates trend Neutral
3-29 IBD and Mikey issue short term uptrend signals
Moving Averages

5 day 12213 Rising/Price above
20 day 12063 Rising/Price below
50 day 12063 Flat/Price below
90 day 11811Rising/Price above
200 day 11148 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  47
DJIA 58 Canada 59 Latin Amer 39 Mexico 64 Brazil 54
Europe 39 UK 31 Germany 22 Spain 56 Russia 55
China 44 Japan 28 Korea 45
Singapore 45 Taiwan 38 India 60  Australia 62
Emer Mkts 64 Total World market Index 42

Commodities (Power Numbers)
Oil 50 Nat Gas 73, Gasoline 63
Gold 50 Copper 45 Silver 60 Platinum 41
Grains 35 DBC 70

Currencies (Power Numbers)
USD 45 Aussie 55 Euro 56 Brit Pd 51 Yuan 47 Yen 47  

US Industry Sectors (relative strength) Ave Score 52...(Not updated today)
(5 up, 30 Neutral, 0 Downtrend)Score 3

Homebuilders (XHB) 54, Real Estate (IYR) 47, Finance (XLF) 46  Regional Banks (IAT) 44 Insurance
(IAK) 49, Broker/Dealers ( IAI) 46, Retail (XRT) 57 Consumer Disc (XLY) 49  Telecom (IYZ) 49 Consumer Staple (XLP) 56 Health (XLV)55, Pharma (IHE) 53, Biotech (PBE ) 51, Transports (IYT) 58 Aerospace (ITA) 54, Shipping (SEA) 46, Airlines ($XAL) 46, ,Utilities (XLU) 43, Metals and Mining( XME) 57, Copper (COPX) 51, Nat Gas Production (FCG ) 63, Oil Expl and Prod (IEO) 60 Oil Service (OIH) 58, Coal (KOL) 58, Energy (XLE) 60, Gold Miners (GDX) 51 Steel (SLX) 52 Basic Mat (XLB) 54 Timber (Wood) 58 AgriBusiness (MOO) 52, Tech (XLK) 50 Semiconductors (SMH) 51, Software (SWH) 52 Networking (PXQ) 47 Internet (FDN) 52


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

MUB (Natl Muni) 49 NCA(Ca Muni) 66 BND (Total Bond Index) 46 BWX (International Treas Bonds) 57, PCY (Emerg Mkt Debt) 40 TLT (20+ US Treasuries) 60, IEF ( 10 yr Treasuries) 53, PFF (US preferred) 66 HYG (High Yield) 46

I have a short term up trend in place and even though I do not believe it I have to close my shorts. I will not play the long side of this because if a real chance of getting whipsawed. The bond markets were weak today even though my power numbers do not show it. They usually lag the price. The dollar held study at its lows and the market drifted higher. A new high looks possible now.

The jobs numbers come out this week and they are probably going to cook the books to make them look good. It is the end of the quarter and the little people are looking to invest their 401K money. They will be getting their end of quarter statements just about the time they make their decision. The boys, I think, want them to feel good about being invested so look for more posiitve action here.

Mikey
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