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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

Wednesday, March 23, 2011

Snap back rally continues

DJIA 12086.02 +67.39 SPX 1297.54 +3.77 NASDAQ 2698.30 +14.43
Russell 2000811.24 +2.58 DJT 5096.58 -33.5 DJU406.04 -.31 VIX 19.17
US Gov rates: 6 mo .1573%  2 yr .6454% 10 yr 3.33 +.02   30 yr 4.43 uc
IEF(US10 yr) 93.90 -.12 TLT (US LT)93.02 -.30 MUB (LT Natl Muni)100.13 +.27
BND (Total Bond Mkt)80.42 -.03  HYG (High Yield)91.69 -.09
Gold 1438 +10.40 Silver 37.20 +.93 Copper 4.42 +.11 Platinum 1760 +20.60  
Oil 105.75 +.78 RBOB 3.02 uc Nat Gas 4.34 +.08
Aussie 1.0170 +.0035 EURO 1.4045 -.0095 Pound 1.6138 -.0150
USD Index 76.05 +.38 DBC 30.12 +.02
Days to option expiration: 18

Long Term Opinions:

US Bonds: Major long term top forming. .... Current trend up
Muni Markets: Bottoming : Current trend Neutral
Stocks: .....  Current trend down
Gold: Primary top forming .....  Current trend up
Silver: Blow out top....Current trend up
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: Long term bottom forming .Current Trend down
US Economy: Propped up with debt.....Current trend up ..Slowing
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.
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) 83
Put/Call Ratio(.6 OB 1.2 OS) .79 10 day average .87
Ratio Put Premiums to Call Premium (..34 to 2.5)  .85     10 day ave .84
Mutial Fund  Purchase/Redemptions ( 1.5 to .66)  1.15   
Williams %R 12 day -24.46 weekly -36.65
Bulls 50.6   Bears 22.4 Bull/Bear ratio 2.26 Bullish
Mikey Thrust indicator: Daily 8 Weekly 6 (1 low, 10 max)14, +2
DJIA MACD -21.46 (below 0 line) Rising/Negative Cross  2-22
NYSE New Highs 89(12/7 429)  New Lows 17
NASDAQ New Highs 69(12-7 352) New Lows 37
NYSE Advance-Decline +310 NASDAQ Advance-Decline +168
Mikey A/D line NYSE (3/3 25358)+23153 NASDAQ (2-18 10095) +5049
NYSE % above 200 day ave  73%

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

Moving Averages

5 day 12016 Rising/Price above
20 day 12038 Flat/Price below
50 day 12046  Rising/Price below
90 day 11760 Rising/Price above
200 day 11108  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  42
DJIA 51 Canada 56 Latin Amer 36 Mexico 52 Brazil 51
Europe 32 UK 24 Germany 19 Spain 56 Russia 43
China 57 Japan 24 Korea 45
Singapore 37 Taiwan 44 India 51  Australia 44
Emer Mkts 63 Total World market Index 32

Commodities (Power Numbers)
Oil 59 Nat Gas 74, Gasoline 55
Gold 66 Copper 32 Silver 66 Platinum 45
Grains 29 DBC 64

Currencies (Power Numbers)
USD 41 Aussie 48 Euro 49 , Brit Pd 58 Yuan 45 Yen 65  

US Industry Groups (relative strength) Ave Score 49
(4 up, 31Neutral, 0 Downtrend)Score 4

Homebuilders (XHB) 52, Real Estate (IYR) 47, Finance (XLF) 43  Regional Banks (IAT) 41 Insurance
(IAK) 46 , Broker/Dealers ( IAI) 45, Retail (XRT) 51 Consumer Disc (XLY) 47  Telecom (IYZ) 50 Consumer Staple (XLP)50 Health (XLV)47, Pharma (IHE) 49, Biotech (PBE ) 46, Transports (IYT) 51 Aerospace (ITA) 54, Shipping (SEA) 48, Airlines ($XAL) 43, ,Utilities (XLU) 42, Metals and Mining( XME) 59, Copper (COPX) 53, Nat Gas Production (FCG ) 64, Oil Expl and Prod (IEO) 60 Oil Service (OIH) 54, Coal (KOL) 61, Energy (XLE) 57, Gold Miners (GDX) 61 Steel (SLX) 51 Basic Mat (XLB) 53 Timber (Wood) 54 AgriBusiness (MOO) 50, Tech (XLK) 44, Semiconductors (SMH) 46, Software (SWH) 46 Networking (PXQ) 44 Internet (FDN) 49

Bonds (Relative Strength)
(1 up, 0 down, 8 neutral) Score 1
MUB (Natl Muni) 52 NCA(Ca Muni) 54 BND (Total Bond Index) 56 BWX (International Treas Bonds) 66, PCY (Emerg Mkt Debt) 53 TLT (20+ US Treasuries) 57, IEF ( 10 yr Treasuries) 55, PFF (US preferred) 57 HYG (High Yield) 53

Very little to say about today except that we above the 50 day average now. The MACD is approaching the zero line. The standard set up is for the MACD to cross up through zero and then roll over below it. That would be a sell.

Mikey
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