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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, June 20, 2013

Big Volume decline signals new downtrend

Remember when the risk trade was popular.  The idea was that interest rates paid nothing so you had to invest. To help the investor the Fed would prop up everything from government bonds to muni bonds to corporate bonds to stocks to utilities to commodities to Gold  to you name it.  The investors would then feel safe as a bug in a rug and take the bait and buy all those assets off  the central banks, who by the way, bought them at crash prices in 2008 and 2009.  Of course, there would be a day of reckoning but that was way off in the future because hey the economy would take along time to mend and the good old boys at the Fed would be there to save your butt anyway.

Today there was a mass exodus from all markets, bonds, stocks, commodities, and gold all got nailed. Gold the protector of all thing evil is now 1286 or down 700 from its highs.  The only thing that did not go down were bank accounts paying zero interest and the hated dollar. All markets are now in downtrend and the most vulnerable of all assets now is stocks. 

Stocks decliners outnumbered winners 29 to 1 on the NYSE and almost 7 to 1 on the NASDAQ.
Stocks above their 50 day average are now 43%.  Yield's on  the 30 year made a 2 year high at 3.51
the 10 year ended at 2.42.  Mortgage yield are at 2 year highs at 4.24 on 30 year and 3.31 on the 15 year.  Gold was down 87 to 1286, silver was down 1.80 to 19.82.  You remember silver at 48 bucks less than 2 years ago.  Remember how the Fed was printing and the dollar was going to do nothing but go down. Stocks are just as ripe as Gold and Silver was 2 years ago. 

I hear talk of Bernanke leaving in January.  That would be a good time for his replacement to save the day just as Ben did in 2009 with the QE's.

Mikey


DJI Close 14578.32 -353.57
    DJI Trend Summary
    Long Term UP/ Intermediate UP/ Daily down/Short Term down
    Hourly down 6-19 15169
    Daily downtrend: 15037 on 6-20 1 trading day
    Intermediate Uptrend: at 13412 on 1-2 ( 116 trading days)
    Long Term Uptrend 11315 on 11-1-10  2 years + 7 months
    Mikey Short term Buy/Sell signal 6-19 down
    IBD confirmed downtrend 6-20  14758
    Current Trading range   14444 -15542
    Step Down trading Range 14050 - 14444
    Resistence: 15542
    Support 1 15180 broken and retaken and broken, etc
    Support 2 14844  broken
    Support 3 14400

    Average watch
    50 Hour Ave: 15169 price below
    20 Day Ave: 15207 Price below
    50 Day Ave: 15037 Price below
    200 Day Ave: 13965 Price above
    20 Week Ave: 14702 Price above
    50 Week Ave: 13829 Price above
    200 Week Ave: 12020 Price above
    50 Month Ave: 11836 Price above

    Indicators
    NYSE A/D -2802 NASDAQ A/D -1795
    NYSE A/D line  93111 NASDAQ A/D line -3530
    Put/Call 1.29 10 day .99 Put Prem/Call Prem  .87 10 day .93
    % Stocks above 50 day average  43
    CNN  Fear/Greed Index 16  fear (100 Greed to 0 Fear)
    Mikey total OB/OS Oscillator  Range (+550 to -550) -364
    Bulls 46.8  (58.8 to 21.3) Bears 21.9 (54.4 to 15.6)  Ratio 2.14
    Mutual Fund Purch/Redemp: 1.17 (.66 to 1.46) High public buy
    DJI PE ratio 16.8  DJI  Price/Book 3.77(1.27 to 4.13)
    DJI Dividend Yield 2.44 (2.38 to 4.45)
    NYSE Vol (in Millions) 4782 NASDAQ Vol 1988
    New Highs NYSE 15 NASDAQ 44
    New Lows  NYSE 380 NASDAQ 73
    Closing Prices
    US Stock
    DJI 14758.32 -353.87 DJT 6142.12 -140.92 SPX 1588.19 -40.74 
    DJU 465.57 -13.81 NASDAQ 3364.63 -78.51
    US Debt Markets
    US Gov: 3 mo .051% 2 yr .327% 5 yr 1.30% 10 yr 2.42% 30 yr  3.51%
    Mortgage Rates 30 year 4.24 % 15 Yr 3.31%
    Yield:  Investment grade 3.17   High Yield 6.13
    IEF(2-10 year) 102.83 -.76 TLT (US 20 yr) 110.10 -2.01
    Muni Bonds 104.08 -1.87 Cal Muni (NCA) 9.24 -.16
    LQD (Inv Grade Corp) 113.13 -1.58 High Yield 90.74 -.90
    Commodities 
    CRB Commodities Index 279.57 -8.39
    Gold 1286.70 87-.80 Silver 19.82 -1.80
    Copper 3.06 -.08 Platinum 1363.80 -60.10
    Oil 95.40 -3.03 Gasoline 2.79 -.10 Nat Gas 3.88 -.09
    US Dollar Long Term/ Intermediate Term / Daily Trend / Short term
     
    All Market Trends: 
     
    Commodities
    Gold: (GLD)    Long/ Intermediate   Daily / Short term
    Silver: (SLV)   Long  / Intermediate / Daily / Short term
    Copper:(JCC) Long / Intermediate / Daily  / Short term
    Oil: (USO)       Long / Intermediate / Daily/ Short term
    Gasoline (UGA) Long/ Intermediate / Daily/Short term
    Nat Gas:(UNG)Long Term/ Intermediate/ Daily/ Short term
    Commod (USCI) Long Term/ Intermediate / Daily / Short term
    Bond Markets
    US Bonds LT (TLT) Long Term/ Intermed/  Daily/ Short term
    US Corp BBB (LQD)  Long Term/ intermediate/Daily/ Short term 
    US Muni  (MUB)      Long Term  Intermed/ Daily/ Short Trend
    High Yield  (HYG)   Long Term/Intermed/ Daily/ Short term
    Utility stocks (XLU):Long Term/ Intermed/ Daily  / Short term
    Stocks
    US ($DJI)      Long Term/Interrmed Term/ Daily Trend/  Short term
    Europe(IEV) Long Term/ Intermediate Term/ Daily Trend/ Short term
    China (FXI)    Long Term/ intermed Term/ Daily Trend/ Short term
    Brazil EWZ)  Long Term/ Intermediate Term/ Daily Trend/ Short term
    India  (PIN)   Long Term/ Intermediate Term/ Daily Trend/ Short term
    Emerg Mkt(EEM) Long Term/ Interm Term/ Daily Trend/Short term
    Japan (EWJ) Long Term/ In termed Term/ Daily Trend/ Short term

    Stocks I like
    These are not recommendations as I am not an analyst or financial planner
    Buy Signal = Daily and Intermediate green, short term turns green 
    IF Long and Intermediate are green buy sell off  to 50 day average
    Buy Put 5% out of the money with less than 1 month to expiration
    or place stop 5% below purchase price
    Sell = price returns to pre selloff highs
      
    AAPL Long Term/ Intermediate Term/ Daily Trend/ Short term
    AET Long Term/ Intermediate Term / Daily Trend/ Short term
    AGU Long Term/ Intermediate Term/ Daily Trend/ Short term 
    APA  Long Term/ Intermediate Term/ Daily Trend  Short term
    APC  Long Term/ Intermediate Term/ Daily Trend/ Short term
    ATHN Long Term/ Intermediate Term/ Daily Trend/ Short term
    AUY Long Term/ Intermediate Term/ Daily Trend/ Short term
    AXP Long Term/ Intermediate Term/ Daily Trend/ Short term
    BOFI Long Term/ Intermediate Term/ Daily Trend/ Short term
    BP  Long Term/ Intermediate Term/ Daily Trend/ Short term
    BWLD  Long Term/ Intermediate Term/ Daily Trend/ Short term
    CAT Long Term/ Intermediate Term/ Daily Trend/ Short term
    CLNE Long Term/ Intermediate Term/ Daily Trend/ Short term 
    COG Long Term/ Intermediate Term/ Daily Trend/ Short term
    COP Long Term/ Intermediate Term/ Daily Trend/Short term
    COST Long Term/ Intermediate Term/  Daily Trend Short term
    CRM Long Term/ Intermediate Term/ Daily Trend/ Short term
    DAL  Long Term/ Intermediate Term/  Daily Trend Short term
    DDD Long Term/ Intermediate Term/  Daily Trend Short term
    DISCK Long Term/ Intermediate Term/  Daily Trend Short term
    ELLI Long Term/ Intermediate Term/ Daily Trend/ Short term
    FB   Long Term/ Intermediate Term/ Daily Trend/ Short term
    FDX Long Term/ Intermediate Term/ Daily Trend/ Short term
    GILD  Long Term/ Intermediate Term/ Daily Trend/ Short term
    GLW    Long Term/ Intermediate Term/ Daily Trend/ Short term
    GMCR Long Term/ Intermediate Term/ Daily Trend/ Short term
    GOOG Long Term/ Intermediate Term/ Daily Trend/ Short term
    HAL Long Term/ Intermediate Term/ Daily Trend/ Short term
    HD  Long Term/ Intermediate Term/ Daily Trend/ Short term
    HEI Long Term/ Intermediate Term/  Daily Trend Short term
    HFC Long Term/ Intermediate Term/ Daily Trend/ Short term
    IT    Long Term/ Intermediate Term/  Daily Trend Short term
    KORS Long Term/ Intermediate Term/ Daily Trend/ Short term
    KMX Long Term/ Intermediate Term/  Daily Trend Short term
    LCC  Long Term/ Intermediate Term/ Daily Trend/ Short term
    LNKD Long Term/ Intermediate Term/ Daily Trend/ Short term
    LEN  Long Term/ Intermediate Term/ Daily Trend/ Short term
    MCD Long Term/ Intermediate Term// Daily Trend  Short term
    MELI Long Term/ Intermediate Term/ Daily Trend/ Short term
    NOV  Long Term/ Intermediate Term/ Daily Trend/ Short term
    ORB Long Term/ Intermediate Term/ Daily Trend/ Short term
    P      Long Term/ Intermediate Term/ Daily Trend/ Short term
    PAA  Long Term/ Intermediate Term/ Daily Trend/ Short term
    PG  Long Term/ Intermediate Term/ Daily Trend/ Short term
     QCOM Long Term/ Intermediate Term/ Daily Trend/ Short term
    RAX  Long Term/ Intermediate Term/ Daily Trend/ Short term
    SLB Long Term/ Intermediate Term/ Daily Trend/ Short term
    WAG  Long Term/ Intermediate Term/ Daily Trend/ Short term
    WFM Long Term/ Intermediate Term/ Daily Trend/ Short term
    XONE Long Term/ Intermediate Term/ Daily Trend/ Short term
    Z  Long Term/ Intermediate Term/ Daily Trend/ Short term

    Short ETF's
          SH ( Short S & P)              Long / Intermediate / Daily / Short
          SJB (Short High Yield bonds)   Long / Intermediate / Daily/  Short
          VIXY (Short term VIX futures) Long /Intermediate / Daily/  Short
          YXI (Short China)                      Long / Intermediate / Daily / Short
          SEF (Short Financial Index)      Long / Intermediate / Daily / Short
          DOG (Short DJI)                        Long / Intermediate / Daily / Short
       

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