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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

Tuesday, January 3, 2012

Europe saved again market extends uptrend...Utilities reverse breakout

The central banks are again profiting from a bailout of Europe. To top it off the European stock market is on the verge of an uptrend. In other words the new year is starting off like last year. A crisis rises up and the central banks arranges a solution. The way this thing looks they will be arranging solutions for a long long time.

Utility stocks and bonds underperformed today. It is worth keeping an eye on rates and utilities in here as the "economy is picking up" news is creeping into the news now. The move today flipped many world stocks up to neutral. The US market is still vastly out performing the world markets. 

 The DJI hit 12400 resistance today and pulled back. Put/Call ratio was .62 and the 10 day was .69 saying that the shorts are out of the game now. Mikey 5,20 and 50 are neutral and the 10 is slightly overbought. Long term, intermediate and short term trends are all pointed up .

Keep an eye on the utilities, the transports and the bond markets for possible reversals. The DJU 455.72 reversed below the 460 breakout and would be in a downtrend on a close below 440. The TLT 119.38 has not been able to top its Oct 4 highs and would be in a downtrend below 114. The DJ Transportation ave 5065.71 would reverse on a close below 4750.  I still consider a close below 11700 the reversal number for the DJI.

Mikey


Key Indicators
DJI Close 12397.38
US Stock Indexes DJI Current Trading Range 11700 to 12478 Price as % of range 100
Support 1 12151 Support 2 11700 Support 3 11200
Resistence 1 12400 Resistance 2 12800 Resistence 3 13132
Long term trend Up ...signal 12/1/10 11577
Intermediate trend Up...signal 12-19-11 12102
Current trend Up ...signal 12-14-11  12102
IBD Current trend 12-20 Market in confirmed uptrend 12103

Mikey5 (+38) Neutral, Mikey10 (+109) Overbought
Mikey20 (+62) Neutral, Mikey50 (+62) Neutral
Put/Call day .62 10 day .69,  Put Premium .95 10 day 1.12,  
Bull/Bear Ratio 1.71 Mutial Funds Buy/Redeem ratio 1.02
MACD  Daily (+128.27),Positive cross 12-22, Weekly (+118.58), Positive cross 10-24
VIX 22.97 VXZ 58.83 Mikey Fear 68 (80 Low 20 High) 
 % Stocks above 200 day ave 44% (above 50% uptrend)

Averages
20 day 12097 Rising/Price above
50 day 11957 Rising/ Price above
200 day 11949 Rising/ Price above
20 week 11682  Rising/ Price above
50 Week 11987 Rising/Price above
200 Week 10611 Rising/ Price above

Closing Prices

US Stocks
DJIA 12397.38 +179.82 S/P 500 1277.06 +19.46
NYSE Comp 7624.32 +147.29 NASDAQ 2648.72 +43.57
S/P Small Cap 421.55 +6.48  Russell 2000 752.28 +11.36
DJT 5065.71 +46.02 DJU 455.72 -8.96
US Debt Markets
US Gov rates: 6 mo .0578%  2 yr .2631% 5 Yr .8798% 10 yr 1.95 30 yr 2.97
Ave Mtg rates : 30 Yr 3.93% 30 Yr Rifi 4.00 % 15 Yr 3.27% 5/1 ARM 2.88
IEF (US 7-10 yr) 104.90 -.67 TLT (20 yr) 119.29 -1.62
MUB (NatlMuni) 108.50 +.25 Cal Muni (NCA) 9.50 -.01
BND Total Bond Index 83.28 -.26
Commodities
CRB Commodities Index 313.87 +8.07
Gold 1600.50 +33.70 SILVER 29.51 +1.66 Copper 3.43 +.09 Platinum 1432.50 +27.60
Oil 102.72 +3.89 RBOB 2.75 +.10 Nat Gas 2.99 uc
US Dollar Index and World Currencies
Euro 1.3001 +0109 Pound 1.5521 +.0072 Swiss Franc 1.0599 +.0089
Yen  1.2846 +.0053 Aussie 1.0369 +.0107
Dollar Index 79.92 -.60
World Debt markets
BWX 59.42 +.59 PCY 27.13 -.22 IBND (Intl Corp) 31.52 -.09

All Markets Current Trends 

World debt markets
US Bonds: 12-14  current trend up
US Natl Muni Markets:: 11-21 current trend up
Intl Treas Bonds 11-9 current trend down
Intl Corp Bonds 1-3-12 current trend neutral
Emerging Markets Debt: 11-21 current trend up
US High Yield 12-12 current trend up
US Preferred Stocks 11-30 current trend neutral

Currencies markets

US Dollar Index 11-14 current trend up
Aussie Dollar 12-12 current trend neutral
Euro 11-14 current trend down
Brit Pd 11-21 current trend down
Swiss Franc: 10-27 current trend down
Jap Yen 12-30 current trend neutral
Canadian Dollar 12-30  current trendneutral
Mexican Peso 12-12 current trend down 
Brazilian Real 12-12 current trend down
Indian Rupe 11-21 current trend down
Commodity index (Broad based) 11-21 current trend down
Metals
Gold: .12-11  current trend down
Silver: 12-11 current trend down
Copper 12-12 current trend neutral
Platinum 11-17 current trend down
Palladium 12-14 current trend neutral
Agg, Fiber, Wood
Grains  Current trend up
Cotton 10-21 current trend down
Livestock 12-7 current trend neutral
Coffee 9-21 current trend down
Lumber 12-14 current trend down
Energy
Oil 12-21 current trend up
Heating Oil 12-9 Current trend down
Gasoline 12-21 current trend up
Natural Gas 7-28 current trend down

World Stock markets
US Stocks: 12-14 current trend up
Europe 1-03-12 current trend neutral
China: 1-03 current trend neutral
Brazil 1-03 current trend neutral
Japan 1-03 current trend neutral
India 11-9 current trend down
Russia 12-9  current trend down
Emerging Markets: 1-03 current trend neutral
Total world markets 1-03 current trend neutral

Intermediate Term Trends

Dollar:Up
Oil: Up
US Stocks Up
Gold: Down
US Bonds: Up
Silver: Down
Commodities: Down
World Bonds: Down
Emerging Debt: Neutral
Emerging Markets: Down
World Stocks: Down 

Trend changes today:

World Stocks:  Europe, China, Brazil, Japan, Emerging Markets ,
Total World Markets to current trend neutral

Currencies:, Aussie to up
Commodities:
World Debt :


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