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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, July 29, 2011

US Bonds close at 6 month highs ...Really?

US bonds have big up day today and closed at 6 month highs. The 30 year is 4.11% and the 10 year is 2.80. The good news is that mortgages should fall soon. Stocks continue down nearing the 200 day average which is at 11977 or near its mid June lows. Mikey5 is at -176 and the Mikey10 is -78. New lows of 175 on the NYSE exceeds the number of lows hit in the January sell off. The MACD is nearing zero at 7.68 and only 42% of the stocks are above the 200 day showing that the DJI is masking the decline.

The real story is the weakening economy not the debt talks. If it was not, the bonds would be making new lows and not new highs. Maybe the Fed is taking profits in stocks and buying bonds. Either way, stocks are falling and bonds are rallying according to the trends. None of the experts are long bonds yet but they will be squawking it up for the bonds when their daddy the Fed wants to sell. 

Commodities are generally weak but the precious metals and copper are still showing strength with Gold at a new high at 1631.  It looks more and more that a double dip is coming. I have been saying for the past year that the winner will be the US bond markets and the losers will be equities, commodities and the economy. It looks like that day is coming closer.

Mikey

Closing Prices

US Stock Indexes
DJIA 12143.24 -96.87 S/P 500 1292.28 -8.39
NYSE Comp 8079.43 -44.59 NASDAQ 2756.38 -9.87
S/P Midcap 943.47 -2.56 Russell 2000 797.03 -2.31 
DJT 5184.05 -12.66 DJU 431.17 -4.26
US bonds and interest rates
US Gov rates: 6 mo .1628%  2 yr .3632% 10 yr 2.80 30 yr 4.11
IEF (US10 yr) 98.66 +1.18 TLT (USLT)97.92 +1.90 
MUB (NatlMuni) 103.77 +.14 CalMuni (NCA)8.76 +.03
HYG (High Yield)91.05 +.09 PFF(Preferred) 38.70 -.14
BND (Total Bond Mkt)82.76 +.42
Commodities
Commodities Indexes (DBC)30.28 -.25 (USCI ) 66.33 -.48
Gold 1631.20 +15.90 Silver40.10 +.31 Copper4.48 +.01
Platinum 1785.30 -7.10 .Nickel (JJN) 36.43 +.35  
Oil 95.70 -1.74 RBOB 3.06 -.05 Nat Gas 4.14 -.09
Grains (JJG)49.77 -1.27 Livestock (COW) 30.17 +.19
Cotton (BAL 62.78 -1.06 Agg complex(JJA)59.65 -1.11
US Dollar Index and World Currencies
Euro 1.4314 +.0060 Pound 1.6298 +.0069 Swiss Franc 1.2579 +.0238
Yen 1.2815 +.0129 Aussie 11.1045 -.0006 Can$ 1.0408 -.0044
USD Index 74.03 -.19
World Debt markets
BWX(Intl Treas) 62.66 +.32 PCY(EmerMkt) 27.52 +.16
IBND(Intl Corp) 35.04 +.36
All Markets Current Trends

World debt markets
US Bonds: 7-29 current trend up
US Natl Muni Markets:7-27 current trend neutral
Intl Treas Bonds 7-25 current trend up
Intl Corp Bonds 7-25 current trend up
Emerging Markets Debt: ..3-24 current trend up
US High Yield 7-27 current trend neutral
US Preferred Stocks 7-6 current trend down

Commodities
Commodity index (Broad based) 7-11 current trend up
Gold: .7-6 current trend up
Silver: 7-13  current trend up
Copper 6-29 current trend up
Platinum 7-21 current trend up
Palladium 7-7 current trend up
Nickel 7-13 current trend up
Grain complex 7-25 current trend down
Sugar 2-23 currevt trend up
Cotton `4-25 current trend down
Livestock 7-7 current trend up
Coffee 5-11 current trend down
Lumber 7-1 current trend neutral
Agg complex 7-13  current trend neutral
Oil 7-13 current trend neutral
Gasoline 7-7 current trend up
Natural Gas 7-28 current trend down

World Stock markets
US Stocks: 7-27 current trend down
Europe 7-1 current trend down
China: 6-3 current trend down
Brazil 7-1 current trend down
Japan 6-29 current trend up
India 7-27 current trend neutral
Russia 7-13  current trend up
Emerging Markets: 7-27 current trend neutral
Total world markets 7-27 current trend neutral  

Currencies markets
US Dollar Index 7-21  current trend down
Aussie Dollar 7-19 current trend up
Euro 7-21 current trend up
Brit Pd 7-21 current trend up
Swiss Franc: 2-17 current trend up
Jap Yen 7-11 current trend up
Canadian Dollar 7-1 current trend up
Mexican Peso 7-20 current trend up
Brazilian Real 5-27 current trend up
Indian Rupe 6-30 current trend up

Trend changes:
World Stocks:
Currencies:
Commodities:
World Debt :
US Stock Market Trends
Mikey Short term down  7-28 12240
Mikey Intermediate Trend: Up 09/03/10 10477
Mikey Long term trend: UP 10/13/10 11052
NYSE 7-21 Current trend down  
NASDAQ 7-28 Current trend down
Transports: 7-27 down  
Russell 2000: 7-27 down   
IBD : 7-27 mkt in correction 12302
Stock of the day: CHSI 65.57
US markets short term technical trading indicators:

Mikey10 Meter -78 (-80 OB, 0 Neutral,  80 OB)
Mikey5 Meter -176 VIX (OB 10 - OS 40) 23.74 ,VXZ 50.00 Mikey OB/OS index (80 OB 20 OS) 62
Put/Call Ratio(.6 OB 1.2 OS) 1.05 10 day average .96
Ratio Put Premiums to Call Premium (.34 to 2.5) .84  10 day ave .82
Mutial Fund Purchase/Redemptions ( 1.5 to .66) 1.14
Williams %R 12 day 91.15 Weekly 69.48
Slow Stocastic D 5 Slow Stocastic K 48
Bulls 49.5  Bears 21.5  Bull/Bear ratio 2.30
Mikey Thrust indicator: Daily 0 Weekly 3 (1 low, 10 max)3 -3
Daily DJIA MACD +7.68 Falling Neg cross 7-27 
Weekly MACD +184.14 Falling/Negative cross 5-16
NYSE New Highs 17(12/7 429) New Lows (7-29 175 )175
NASDAQ New Highs 25(12-7 352) New Lows (6-10 162) 111
Advance/Declines
Daily NYSE Advance-Decline -1024 NASDAQ Advance-Decline -396
Daily Mikey A/D line NYSE (7-7 37567) 28390
Daily Mikey A/D line NASDAQ (2-18 10095) (6-13 -2188) -1661
5 day AD NYSE -7023 NASDAQ -4069 NYSE..(OB +4000 OS -4000)
10 day AD NYSE -4702 (6000 OB -6000 OS)
% above 200 day ave (6-13 47%) 42%
below 50% indicates intermediate trend may be changing
Days to option expiration 16
Stock of the day: WLT RS 86

DJI Moving Averages

5 day 12355
20 day 12512  Falling/ Price below
50 day 12321  Falling/Price below
90 day 12387 Rising /Price below
200 day 11977 Rising/Price above
20 week 12363  Rising/Price below
50 week 11755 Rising/ Price above
90 week 11166  Rising/Price above
200 week 10769  Falling/ Price above

Comments:

6-28 New Mikey indicator overbought oversold for short term traders -80 oversold (a buy) +80 overbought (a sell). Green being buy red being a sell. Currently at +45 or mildly overbought
Stock of the day (SOTD) ACOM 41
6-29 Mikey Meter 99, (STOD) SQM 64.55 Exxon counts the Greek austerity vote oil spikes
6-30 Mikey Meter 127 extremely overbought, Mike index 94 also overbought, % W at 3.11 all the way up
The market has returned to its pivot line and last breakdown. This would be a logical place to stop.
STOD: RUE 32.50
7-1 Mikey meter 147 AD 5 day 7421 10 day 8815 Pivot line is 12350 that will be the reversal number to look for. STOD ALTR 47.53 RS 91 Dollar reverses down Stocks all over the world reverse up.
7-5 False sell off a nothing day. Gold up 30 bucks above 1500
7-6 QE 2 extends into July
7-7 Gasoline turns up market nears highs mikey meter at 136.
7-8 Weak jobs Stocks sell off bonds rally. Mikey meter still at overbought 125. STOD BHI 75.06 RS 90
ECRI falls to 1.8%
7-11 Dollar and US bonds reverse up on US debt problems. Thank God the Fed owns all those bonds.
7-13 Bernanke slams the dollar at the reversal. Commodities and stocks rally. The big debt deadline crisis appears on the evening news. Talk of the Bernanke Put on the market(don't fight the Fed)
7-14 Bernanke says no QE3 now colling off commodities. STOD ATHN 45.87 RS 87
7-15 Gold up 10 days in a row Options expire. Mikey meter at 1. Next options series starts a neutral.
 ECRI 128.4 annual rate 1.7%
7-18  First day out of expiration.  Market to neutral Meter at -37 STOD CF 151.56 RS 90
7-19 Pre Debt agreement reached, Mikey Meter -35, STOD INFA 54.94 RS 90, mkt to up, Aussie to up, Grains to up
7-20 Dollar rolls over AGAIN International debt turns up Markets are mixed. Mikey Meter at -29. Oil on verge of buy signal most commodities are resuming their uptrends. Europe, China, and emerging markets lagging.
7-21 Dollar nears lows. Gold and commodities sell off??? International debt back in uptrend Mikey Meter -5, STOD AVGO 36.76 RS 91 Euro and PD turn up, High yield turns up International markets turn up
7-22 Pre debt agreement breaks up dollar tanks STOD HS RS 95 Mikey meter -36 market slightly OS
High Yield debt to up
7-25 Debt talks taken public flame is turned up on the public STOD FEIC 36.57 RS 94. mikey meter at -47 indicating downward pressure over the last 10 days.
7-27 AD line tanking, Mikey meter -60, Daily MACD Negative cross, DJI closes at 50 day, DJT and Russel 2000  break down to 200 day, less than 50% of all NYSE stocks are above their 200 day averages. IBD goes to market in correction Mikey goes to neutral.
7-28 Meter reads -153 for 5 day and -90 for 10 day either we crash or the market is close to a rally. Put/call is .97 10 day so the puts are out on a limb again, Put premium is finally starting to rise at .81 10 day but is saying that puts are still cheap relative to calls. %R is all the way down on the daily and half the way down on the weekly. I gave a sell signal today but it looks like the decline is slowing
7-29 US bonds have big up day at 6 month highs 30 year to 4.11 10 year to 2.80. Mortgages should fall. Stocks continue down nearing the 200 day average which is at 11977 or near its mid June lows. Mikey5 is at -176 and the mikey10 is -78.  MACD is nearing zero at 7.68 and only 42% of the stocks are above the 200 day showing that the DJI is masking the decline.

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