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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 4, 2011

This week had big moves and very little change

DJIA 12169 -88.32 SPX 1321.15 -9.82 NASDAQ 2784.87 -14.07
Russell 2000 824.99 -3.90 DJT 5060.54 -50.88 DJU 412.56 -2.39 VIX 19.06 
US Gov rates: 6 mo .142%  2 yr .6806% 10 yr 3.49 -.06 30 yr 4.60 unch
IEF(US10 yr) 92.80 +.66 TLT (US LT) 90.75 +.91 MUB (LT Natl Muni)99.98 -.33
BND (Total Bond Mkt) 79.89 +.27 HYG (High Yield) 92.00 -.19
Gold 1428.60 +12.30 Silver 35.34 +1.00  Copper 4.48 uch Platinum 1837.90 +4.90
Oil 104.42 +2.51 RBOB 3.05 +.02 Nat Gas 3.81 +.05
Aussie 101.44 -.0019 EURO 1.3928 +.0024 Pound 1.6171 -.0001
USD Index 76.41 -.08 DBC 30.43 +.15
Days to option expiration: 10
Long Term Opinions:

US Bonds: Major long term top forming. .... Current trend down
Muni Markets: Bottoming : Current trend Neutral
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 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: Proped 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.

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 under pressure 3-1



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) ..84
Put/Call Ratio(.6 OB 1.2 OS).88  10 day average .85
Ratio Put Premiums to Call Premium (..34 to 2.5)  .63     10 day ave .67
Mutial Fund  Purchase/Redemptions ( 1.5 to .66)  1.15   
Williams %R 12 day -54.99 weekly -22.76
Bulls 50.6  Bears 19.5 Bull/Bear ratio 2.59 Bullish
Mikey Thrust indicator: Daily 4 Weekly 8 (1 low, 10 max) 12, -4
DJIA MACD 63.21 Flat/Negative Cross  2-22
NYSE New Highs 148 (12/7 429)  New Lows 11
NASDAQ New Highs 110 (12-7 352) New Lows 21
NYSE Advance-Decline -899 NASDAQ Advance-Decline -785
Mikey A/D line NYSE (3/3 25358)+24459 NASDAQ (2-18 10095) +8432
NYSE % above 200 day ave  77%

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
1-5 Gold sell signal
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 confirmed by AD Line.
1-12 Dollar sell signal
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
1-24 Oil sell signal
1-25 Consumer confidence strong, State of the Union message..over hall 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
2-16 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 Gig distribution day 3rd in month
IBD Uptrend under pressure 12058
3-2 Weak bounce

Moving Averages

5 day 12155 Falling/Price above
20 day 12200 Flat/Price above
50 day 11944 Rising/Price above
90 day 11645 Rising/Price above
200 day 10923  Rising/Price above
20 week 11641  Rising/Price above
50 week 10967 Rising/ Price above
90 week 10459 Rising/Price above
200 week 10888 Flat/Price above

Trends Green up, Red Down, Black neutral

World Markets (Power Numbers) Ave score 56

DJIA 53, Canada 79 Latin Amer 76 Mexico 50 Brazil 69
Europe 44 UK 41 Germany 56 Spain 55  Russia 63
China 63 Japan 52  Korea 34 Singapore 42 Taiwan 53 India 62 Australia 58
Emer Mkts 70 Total World market Index 46



Commodities (Power Numbers)
Oil 65 Nat Gas 27, Gasoline 65
Gold 78 Copper 34 Silver 77, Platinum 49
Grains 36 DBC 75


Currencies (Power Numbers)
USD 31 Aussie 65 Euro 71 , Brit Pd 60, Yuan 61, Yen 63

US Industry Groups (relative strength) Ave Score  53
5 up, 29 Neutral, 1 Downtrend  Score -+4
Homebuilders (XHB) 49,  Real Estate (IYR) 52, Finance (XLF) 47 Regional Banks (IAT) 46 Insurance (IAK) 50 , Broker/Dealers ( IAI) 50, Retail (XRT) 54  Consumer Disc (XLY) 54, Telecom (IYZ) 42, Consumer Staple (XLP) 53, Health (XLV) 64, Pharma (IHE) 54, Biotech (PBE ) 50, Transports (IYT) 48 Aerospace (ITA) 52, Shipping (SEA) 43, Airlines ($XAL) 36, ,Utilities (XLU) 54 , Metals and Mining( XME) 58, Copper (COPX) 51, Nat Gas Production (FCG ) 65 Oil Expl and Prod (IEO) 62 Oil Service (OIH) 59,  Coal (KOL) 59,  Energy (XLE) 64, Gold Miners (GDX) 61 Steel  (SLX) 50, Basic Mat (XLB) 49, Timber (Wood) 49 AgriBusiness (MOO) 53, Tech (XLK) 50, Semiconductors (SMH) 59, Software (SWH) 53 Networking (PXQ) 58, Internet (FDN) 51



Bonds (Relative Strength)
 (1 up, 0 down, 8 neutral) Score 1
MUB (Natl Muni) 52 NCA(Ca Muni) 47 
BND (Total Bond Index) 5501 BWX (International Treas Bonds) 63, PCY (Emerg Mkt Debt) 54 TLT (20+ US Treasuries) 49, IEF ( 10 yr Treasuries) 50, PFF (US preferred) 58, HYG (High Yield) 54

The week emded up 30 points after moving like a yo yo for the last 5 days. Oil moves employment numbers Fed chairmn talks and alot of whip saws. My opinion of the theconomy is that it is on life support. The life support is Federal debt and Fed manipiulation. Not healthy. The game is a sure loser. The market trend is still up.

Mikey




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