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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

Monday, November 28, 2011

Oversold rally sends puts running

Now that was unfair open the market up 300 points after 6 of the last 7 were down. If you trade the markets that is what is going to happen and traders are always looking over their shoulder when the market gets oversold as it was Friday. That is the game and it will never be fair.  The Put got smoked from the opening bell and got all day to think about it. This is a good example of why buying options is a losing deal. 

Puts ran .66 today and the market is still oversold. Mikey5 at -115 Mikey 10 at -168 and Mikey 20 at -96. The trend remains down and the Dollar pulled back a little but is still in a solid uptrend. The number to watch on the dollar index is 80. A close above 80 would be a bad sign for assets.

Bonds are still in an uptrend but I suspect at some point in here the debt contagen
will catch up with it. You can only pretend to do something for so long until the markets call BS on you.  The news was very muted when the debt negotiators failled to come to an agreement. I even saw a report that it might be a good thing. I just can't believe that. A spike in rates would not be a good thing right now and I think that is on the way.

Mikey

Closing Prices

US Stock Indexes DJI Trading Range 10600 to 11700
Long term trend Neutral   Intermediate trend down   Current trend down
Market conditon : Oversold
DJIA 11523.01 +291.23  S/P 500 1195.55 +33.88
NYSE Comp 7120.55 +222.37  NASDAQ 2527.34 +85.83
S/P Small Cap 600 388.68 +17.37  Russell 2000 697.90 +31.74  
DJT 4692.35 +158.91 DJU 432.20 +6.19 
US bonds and interest rates
US Gov rates: 6 mo .0650%  2 yr .2617% 5 Yr  .9246% 10 yr 1.98 30 yr 2.93
Ave Mtg rates : 30 Yr 4.02% 30 Yr Rifi 4.10% 15 Yr 3.38% 5/1 ARM 2.97
IEF (US10 yr) 104.71 +.01 TLT (USLT) 120.74 -.01
MUB (NatlMuni) 106.24 -.19 Cal Muni (NCA) 9.23 -.02
Preferred (PFF) 35.91 +.17  HYG (High Yield)84.60 +1.85
BND Total Bond Index 83.66  uc
Commodities
CRB Commodities Index 305.45 -1.28
Gold 1710.80 +25.10  Silver 32.16 + 1.15  Copper 3.36 +.09
Platinum 15.39.50 +6.40  Nickel (JJN) 24.60 +.41
Oil 98.21 +1.44  RBOB 2.57 +.12  Nat Gas  3.52 -.02
Grains (JJG) 41.41 +.47  Livestock (COW) 30.80 -.16
Cotton (BAL) 56.17 +.33 Agg complex(JJA) 50.37 +.50
US Dollar Index and World Currencies
Euro 1.3260 +.0070  Pound 1.5383 +.0061 Swiss Franc 1.0706 +.0088
Yen 1.2634 -.0042 Aussie .9928 +0201 Dollar Index 79.43 -.39
World Debt markets
BWX(Intl Treas) 57.92 +.20 PCY(EmerMkt) 26.81 .10  IBND(Intl Corp) 31.80 +.35



All Markets Current Trends 

World debt markets
US Bonds: 11-16 current trend up
US Natl Muni Markets:: 11-21 current trend up
Intl Treas Bonds 11-9 current trend down
Intl Corp Bonds 11-9 current trend down
Emerging Markets Debt: 11-21 current trend down
US High Yield 11-21 current trend down
US Preferred Stocks 11-22 current trend down
Commodities
Commodity index (Broad based) 11-21 current trend down 
Gold: .11-21 current trend down  
Silver: 11-17 current trend down
Copper 11-17 current trend down
Platinum 11-17 current trend down
Palladium 11-17 current trend down
Nickel 11-1 current trend down
Grain complex 9-19 current trend down   
Sugar 10-31 current trend down
Cotton 10-21 current trend down
Livestock 11-21 current trend neutral
Coffee 9-21 current trend down
Lumber 9-23 current trend down
Agg complex 9-16 current trend down
Oil 10-18 current trend up
Gasoline 11-21 current trend down
Natural Gas 7-28 current trend down

World Stock markets
US Stocks: 11-22 current trend down
Europe 11-9 current trend down
China: 10-26  current trend down
Brazil 10-24  current trend down
Japan 11-1 current trend down
India 11-9 current trend neutral
Russia 11-9 current trend neutral
Emerging Markets: 11-9 current trend down
Total world markets 11-9 current trend down


Currencies markets
US Dollar Index 11-14 current trend up
Aussie Dollar 11-21 current trend down  
Euro 11-14  current trend down
Brit Pd  11-21   current trend down l
Swiss Franc: 10-27  current trend down  
Jap Yen 10-31 current trend down
Canadian Dollar 11-21 current trend down
Mexican Peso 8-3 current trend down
Brazilian Real 11-21 current trend down
Indian Rupe 11-21  current trend down


Trend changes today:
World Stocks:
Currencies:,
Commodities:
World Debt :
Intermediate Term Trends
Oil: Neutral
Gold: Up
Silver: down
Commodities: Down
US Bonds: Up
World Bonds: Down
Emerging Debt: Neutral
Emerging Markets: Down
Dollar:UP
World Stocks: Down 
US Stocks Down


US Stock Market Trends
Mikey Short term  down  11-22 11493
Mikey Intermediate Trend: down   11-21 11547
Mikey Long term Neutral 8-4-11 11779
NYSE 10-14 Current trend down
NASDAQ 11-17 Current trend down
DJ Utilities: 11-22 Current trend down
Transports: 11-23 current trend down
Russell 2000: 11-22 current trend down 
IBD :11-17  Market in Correction 11770
US markets short term technical trading indicators:
Mikey5 -115 Mikey10 -168 Mikey20 -96 (-135 OS, 0 Neutral,  135 OB)
VIX (OB 10 - OS 40) 32.13 ,VXZ 69.92
Mikey Int OB/OS index (80 OB 20 OS)+31
Put/Call Ratio .66 10 day average .96
Put Premium/Call Premium 1.48 10 day 1.07
Mutual Fund Purchase/Redemptions  ( 1.5 to .66) 1.07
Stocastic Fast D 10 day 9.36  Weekly 62.76
Bulls 47.4   Bears 32.6   Bull/B ear ratio 1.45
Daily DJIA MACD  -55.52 down/ Negative cross 11-9
Weekly MACD -61.34 down / Positive cross 10-24
NYSE New Highs 64 (12/7-10 429) New Lows (8-8-11 1345 ) 34
NASDAQ New Highs 15 (12-7-10, 352 ) New Lows ( 10-4-11, 755 ) 86
Advance/Declines
Daily NYSE Advance-Decline +2090 Nasdaq Advance-Decline +1631
Daily Mikey A/D line NYSE (7-7 37567) (8-8 19199) 27245
Daily Mikey A/D line NASDAQ (2-18 10095) (10-3-10-15390) -12761
5 day AD NYSE -4597 NASDAQ -3517 NYSE..(OB +4000 OS -4000)
10 day AD NYSE --8394  (5000 OB-5000 OS) 20 day --6732  7000 OB -7000 OS)
% above 200 day ave  20%
below 50% indicates intermediate trend down


DJI Moving Averages
5 day 11410  Down/ Price above
20 day 11812  Down/ Price below
50 day 11537 Flat/Price below
90 day 11508 Down/Price below
200 day 11953 Down / Price below
20 week 11646 Down/ Price below
50 week 11930  Down/Price below
90 week 11362 Down Price/below
200 week 10620 Flat / Price above


Daily comments for last 30 days:
10-21 The intermediate term was upgraded to neutral and the current trend is still up. Stocks break out above the top of their trading range of 11600 close at 11808
10-24 All three Mikey indicators are overbought. The Mikey5 is at 38, the Mikey10 is at 144 and the Mikey20 is at 136. This is unusual and the last time it happened was July 7 and that was a top. The trends are turning positive for world markets. Brazil current trend is now up along with the total world markets indicator. US bonds are now in current trend down and joined its buddy the dollar. I believe these changes are temporary but the trends must be honored.
10-25 another day another almost solved European crisis another dollar down day  160 points. Ho hum
10-27 Euro Deal made stocks rally World stocks turn up US bonds and dollar in downtrend
10-28 Euro party ends now lets look at something else like phony job numbers that's next week
11-1 Stocks closed down 297 at 11657 or at the 20 week average. That was the breakout on 10-21 and was then resistance and now is support. That is also my line in the sand or you may also call it the pivot point.That is the critical area that this battle is being fought. A closetocks closed down 297 at 11657 or at the 20 week average. That was the breakout on 10-21 and was then resistance and now is support. That is also my line in the sand or you may also call it the pivot point.That is the critical area that this battle is being fought. A close below that number would turn the trend down again. Pt/calls ran hot at 1.22
11-8 approaching overbought
11-9 Europe breaks dollar rallies stocks sink 389
11-12 Market back above 200 day weaving back and forth on Europe story
11-21 The big news today was that world stocks all broke their up trends are in a downtrend along with the broader commodity index. The only commodity I follow that in in an uptrend is oil as Gold broke its uptrend today. The strength of the dollar is overwhelming the asset markets. The central bankers have a decision to make here which is to pump it up by taking the dollar lower or letting the markets fall.
11-22 all markets in downtrends market oversold Mikey5 -175 Mikey 10 -138
11-23 Dollar strength and weak world assets US Bonds 30 year 2.88%
11-24 Market oversold M5 157 M10 166 M20 126
11-27 Market opens up 300
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