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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, October 5, 2012

MACD divergence forming

The MACD is forming a divergence.  This divergence forms between two tops that are spaced about a month apart. The MACD made a high on Sept 24 and had a negative cross on Sept 28. The high on the MACD was 147.44.  The DJI was at 13597.  The MACD closed today at 94.06 and the DJI closed at 13610.  There is a lag here and should there be a negative cross lower than 147.44 in the near future a top would be in place.

30 year bond yields spiked to 2.97 today and 10 year rates closed at 1.74.  Bonds are now intermediate term neutral and are on the verge of turning down. Gold sold off 15.50 and oil dropped 1.83. The RBOB chart (gasoline) is also forming a negative divergence so I would expect a top soon in Gasoline.

Mikey 

Trends:
Daily Uptrend  12822 on 7-20
Long Term UP/ Intermediate Term Up/ Daily Trend Up  /Short Term up
DJI Close 13610.15 +34.79
Current trading range: 13423- 14200 
Step up trading range  14200 -new high
Step down support range 12980-13423
Key Indicators

Averages
50 Hour Ave: 13512 Price above
20 Day Ave: 13497 Price above
50 Day Ave: 13277 Price above
20 Week Ave: 13010 Price above
50 Week Ave: 12755  Price above
50 Month Ave 10942 Price above

Overbought/Oversold readings (Mikey reading) +100  to -100
3 day +72 N   7 day 102 N    20 day +59 N    50 day +128 OB
MACD Readings
MACD Crosses: Negative cross = consolidation/correction Positive cross=uptrend
Short term (50 hour) ,Up  (14Hrs) signal 10-4
MACD Hourly +33.32
Daily trend (50 day) Up 58 days 7-17 12805
MACD Daily +94.06 Negative cross 9-26
Intermediate trend (50 week) Up (16 weeks).signal 6-1 12118
MACD Weekly (+246.03) Positive cross  7-30
Long term trend (50 month) Up (22 months)...signal 12/1/10 11577
MACD Monthly (+605.70) Positive Cross 9-1-09

IBD:Market in Confirmed Uptrend 7-26 12887

Volume Readings
Volume (Millions) NYSE 3125 NASDAQ 1561
Advance/Decline NYSE +405 NASDAQ -210
Mikey NYSE A/D line +66039 Mikey NASDAQ A/D line -11716
Trader Psychology
Put/Call day .89 10 day .79  Put Prem/Call Prem  .70 10 day .76
Bull/Bear Ratio 1.83 Bulls 46.8%, Bears 25.5%
Mutial Funds Buy/Redeem ratio 1.17
VIX 14.33 VXZ 32.46 Trin  1.21  10 day ave 1.05
Mikey Fear  103 (80 Low 20 High)
New Highs NYSE 329 NASDAQ 157 New Lows NYSE 8 NASDAQ 36
% Stocks above 200 day ave 69% (above 50% uptrend)

Closing Prices

US Stocks
DJIA 13610.75 +34.79 S/P 500 1460.93 -.47 NASDAQ 3136.19 -13.27
DJT 5046.43 +33.72  DJU 479.93 -.47
US Debt Markets
US Gov rates: 6 mo .1355% 2 yr .2461% 5 yr .6314% 10 yr 1.74% 30 yr 2.97
IEF (US 7-10 yr) 107.67 -.46 TLT (20 yr) 121.00 -1.74 High Yield 92.50 -.01
MUB(NatMuni) 111.80 -.08 Cal Muni(NCA)10.63 -.01
BND Total Bnd Ind 84.81 -.05
Commodities
CRB Commodities Index 307.62 -2.83
Gold  1778.60 -15.50 Silver 34.57 -.53 Copper 3.77 -.02 Platinum 1707.20 -17.90
Oil89.88 -1.83 RBOB 2.95 +.01 Nat Gas 3.39 -.01
US Dollar Index and World Currencies
Euro 1.2941 +.0008 Pound 1.5965 -.0061 Swiss Franc 1.0580 +.0006
Yen .012481 -000034  Aussie 1.0174 -.0073 Canadian Dollar 1.0158 +.0017
Dollar Index 79.33 -.10

All Market Trends:

Commodities
Gold:    Long Term/ Intermediate Term  Daily Trend// Short term
Silver: Long Term / Intermediate Term/ Daily Trend / Short term
Copper:Long Term/ Intermediate Term/ Daily Trend / Short term
Oil:       Long Term/ Intermediate Term/ Daily Trend / Short term
Gasoline Long Term/ Intermediate Term/ Daily Trend/  Short term
Nat Gas:Long Term/ Intermediate Term/ Daily Trend / Short term
CRB        Long Term/ Intermediate Term/ Daily Trend / Short term
Bond Markets
US Bonds LT Long Term/ Intermediate Term/ Daily Trend/ / Short term
Intl  Treas       Long Term/ Intermediate Term/ Daily Trend /Short term
Intl Corp          Long Term/ Intermediate Term/ Daily Trend/ / Short term
US Muni        Long Term/ Intermediate Term/ Daily Trend   Short Trend/ /
High Yield     Long Term/ Intermediate Term/ Daily Trend/ / Short term
Currencies
Aussie DollarLong Term/ Intermediate Term/ Daily Trend/ / Short term
Brit PD         Long Term/ Intermediate Term/ Daily Trend / Short term Euro             Long Term/ Intermediate Term/ Daily Trend Short term
Yen               Long Term/ Intermediate Term/Daily Trend/  Short term
Swiss            Long Term/ Intermediate Term/ Daily Trend / Short term
Can Dollar Long Term/ Intermediate Term Daily Trend/ Short term
US Dollar   Long Term/ Intermediate Term/ Daily Trend / Short term
Stocks
US      Long Term/ Intermediate Term/ Daily Trend/  Short term
Europe Long Term/ Intermediate Term/ Daily Trend/ Short term
Germany Long Term/ Intermediate Term/ Daily Trend/ Short term
China     Long Term/ Intermediate Term Daily Trend/ / Short term
Brazil    Long Term/ Intermediate Term/ Daily Trend/ Short term
India   Long Term/ Intermediate Term/ Daily Trend/ Short term
Emerg Mkts Long Term/ Intermediate Term/ Daily Trend/Short term
Japan Long Term/ Intermediate Term/ Daily Trend/ Short term
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