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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

Thursday, May 19, 2011

Put killing rally continues

Closing Prices


US Stocks
DJIA 12605.32 +45.14 SPX 1343.60 +2.92 NASDAQ 2823.31 +8.31   
MDY 180.56 +.14 Russell 2000 835.16 +1.71 DJT 5478.80 +57.70 DJU 439.92 +.54
US bonds and interest rates
US Gov rates: 6 mo .0964%  2 yr .5357% 10 yr 3.17 -.01 30 yr 4.30 +.01
IEF(US10 yr) 95.43 +.08 TLT (US LT)95.22 -.09 MUB (LT Natl Muni)103.25 -.35 Calif Muni (NCA)8.80 -.03 HYG (High Yield) 92.74 +.09 PFF(Preferred) 40.12 +.03 BND (Total Bond Mkt) 81.24 -.04
Commodities
Commodities Indexes (DBC)29.09 -.22 (USCI) 66.13 -.69
Gold 1492.40 -3.90 Silver 34.93 -.14  Copper 4.05 -.05
Platinum 1769 -.50 Nickel (JJN) 34.92 -.91
Oil 98.44 -1.45 RBOB 2.92 -.02 Nat Gas 4.09 -.11
Grains (JJG)54.81 -.11 Livestock (COW)28.77 -.20
Cotton (BAL) 85.66 -2.24 Agg complex(JJA) 83.55 -.57
US Dollar Index and World Currencies
Aussie 1.0696 +.0049 Euro 1.4257 +.0072 Pound 1.6124 +.0072
Yen 1.2096 +.0008 Can$ 1.0270 +.0023 USD Index 75.27 -.32
World Debt markets
BWX(Intl Treas) 61.25 +.32 PCY(Emerging Mkt) 27.07 +.01
IBND(Intl Corp Bond) 34.51 +.23

All Markets Current Trends

World debt markets
US Bonds: 4-15 current trend up
US Natl Muni Markets: : 2-18 current trend up
Intl Treas Bonds 1-24 current trend up correcting
Intl Corp Bonds 1-24 current trend up correcting
Emerging Markets Debt: ..3-24 current trend up

Commodities
Commodity index (Broad based) 5-5 current trend down
Gold: .2-18.  current trend up
Silver: 5-11  current trend down
Copper 4-18 current trend down
Platinum 5-11 current trend down
Palladium 5-5 current trend down
Nickel  5-6 current trend down
Grain complex 4-28 current trend down 
Sugar 2-23 current trend down
Cotton `4-25 current trend down
Livestock 4-25 current trend down
Coffee 5-11 current trend down
Lumber  3-29 current trend down
Agg complex 5-2 current trend down
Oil :5-6. current trend down
Gasoline 5-16 current trend down
Natural Gas 5-11 current trend down

World Stock markets
US Stocks: 3-25 current trend up
Europe 3-29 current trend up correcting
China: 5-13  current trend down
Brazil 5-4 current trend down
Japan 5-13 current trend down
India 3-29 current trend down
Russia 5-4 current trend down
Emerging Markets: .5-13.. current trend down
Total world markets 3-29 current trend up correcting

Currencies markets
US Dollar Index 1-25 current trend down correcting..possible reversal up
Aussie Dollar 3-24 current trend up correcting
Euro 5-13  current trend down
Brit Pd 5-13 current trend down
Jap Yen 4-26  current trend up 
Canadian Dollar 5-13 current trend down
Mexican Peso 9-22-10 current trend up
Brazilian Real 5-12 current trend down
Indian Rupe 5-16 current trend down

US 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 5-13 correcting
Mikey: 4-28 12763 Caution advisory..no long positions
close below 12300 reverses trend
Mikey: NASDAQ 5-16 Downtrend 2782.31
IBD : 5-5 market in correction 12584

US markets short term  technical trading indicators:

VIX (OB 10 - OS 40) 15.52 Mikey OB/OS index (80 OB 20 OS) .98
Put/Call Ratio(.6 OB 1.2 OS) .93 10 day average .84
Ratio Put Premiums to Call Premium (..34 to 2.5)  .91 10 day ave .96
Mutial Fund  Purchase/Redemptions ( 1.5 to .66)  1.17   
Williams %R 12 day -47.49 Weekly -20.63
Bulls 45.6  Bears 19.6  Bull/Bear ratio 2.32
Mikey Thrust indicator: Daily 5 Weekly 8 (1 low, 10 max) 13, -3
DJIA MACD +56.34 Falling/ Negative cross 5-9
Weekly MACD +383.43 Rising / Negative cross 5-16
NYSE New Highs 194 (12/7 429)  New Lows (1-14 152 ) 20
NASDAQ New Highs 80 (12-7 352) New Lows (3-15 131) 39
Daily NYSE Advance-Decline +554 NASDAQ  Advance-Decline +14
Daily Mikey A/D line NYSE (5-10 33618)+31662
Daily Mikey A/D line NASDAQ (2-18 10095) +4385
5 day AD NYSE -601 NASDAQ -2140 NYSE..(OB +4000 OS -4000)
 % above 200 day ave 69%
Days to option expiration:1

Comments:
5-2 Bin Laden killed Stocks, Metals and commodities all sell off
Mikey buys ERY@ 13.14
5-3 NYSE Net declines -907 NASDAQ -1042 day now in decline DJI masking decline
IBD changes to market under pressure. Silver nears 40 and Gold shows weakness. Russia (RSX) looks close to breaking down.  Aussie looks like silver 4 days ago.
5-4 Commodity index downgraded to neutral, Brazil to downtrend, Russia to downtrend, China to Neutral, India to downtrend, Brazilian Real big down day under review. Aussie strong sell off. US and Europe weakening.  Silver is now down to its 50 day. 10 bucks off of its highs last week.
5-5 IBD Market in correction. Oil -9.00 and Gold -34.00 joined the commodity sell off and now everyone sees it. BRIC'S are all in a sell off except China which is all but there. Foreign bonds had a bad day with the first big uptick in the Dollar Index +1.14. Commodities index in downtrend Aussie,-.0159, and Euro -.0259 were the standoffs on the downside. The broad commodity index is now in a downtrend. Silver free falls to 34 today right to its 90 day average and just above a trend line drawn from its Sept lows.
5-6 jobs numbers show economy is growing.  Oversold rally today. Oil 98.08 changed to downtrend today. Mikey buys DXD @ 16.60
5-9 oversold rally continues. Margin on oil increased to 25% by CME for tomorrow trades. Commodities rally and dollar sells off. Traders still in the dark about Fed intentions
5-11 Decline resumes Dollar Index at 50 day ave. All commodities are in decline except Gold and Gasoline
5-12 Blog not posted unable to access
5-13 Dollar potential reversal up Brazil Real, British Pd, Euro, Loony, all downgraded to downtrends
Emerging markets, Japan, China markets downgraded to downtrend. Coffee downgraded to downtrend
International bonds downgraded to correcting. US market hanging on to 20 day average. Gasoline downgraded to correcting.
5-16 Gasoline tanks .14 enters downtrend NASDAQ enters downtrend, DJI breaks 20 day ave. All commodities in downtrend except Gold. Soros sells most of Gold holdings
5-17 3 days to options expiration and the 5 day  AD NYSE -4203 NASDAQ -4008  both are now oversold and the puts ran at .92 with heavy out premium of 1.12 today I would expect the crooks to rally into and probably out of expiration to waste the put buyers.
5-18 Put options killing rally
5-19 Ditto yeterday

DJI Moving Averages

5 day 12557 Falling/Price above
20 day 12648 Rising / Price below
50 day 12372 Rising/Price above
90 day 12236  Rising/Price above
200 day 11544 Rising/Price above
20 week 12226 Rising/Price above
50 week 11348 Rising/ Price above
90 week 10884Rising/Price above
200 week 10823 Flat/Price above

Looking at buying volatility with the VXZ. The $VIX is at a very low 15.52 and is at the low end of its range. The VXZ  has traded with a high of 95.26 and a low of 50.71 over the last 200 days. The VIX has traded between 29.40 and 14.30 during that time frame. VXZ trades right with the $VIX. closed today at 51.54. This trade is really a short on the market.

No trends changes

Mikey
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