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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, November 13, 2012

A sell signal only a mother would love


    The fiscal cliff is being hammered into the brain of every investor.  If only we could get an agreement then the markets could move higher.  That may very well be true but an agreement would be about raising taxes and cutting spending. I would think that if the market moves higher it would be in a bad economy. Now days you need a bad economy to move stocks higher so maybe they are right.

    The reality of whatever moves prices means nothing to this blog.  It is about trends. The intermediate and daily trends are down and this blog is on the sideline position wise.  That being said the airline group appears to be emerging after an 8 year run in oil prices. I like DAL and LCC in this space but not with a market in a downtrend.

    The NASDAQ A/D made a new low today and the % of stocks > than 200 day on NYSE is now 50%. The last low of 12743 held again today and there is a minor positive divergence in the hourly chart. The short term turns positive above 12955.  The Put/call ratio is not excessive at .92 and .86 10 day. Put premiums are elevated at 118 but not excessive.  The  Mikey's are 3 day -52 7 day -93 20 day -17 and 50 day +45 so they are not oversold.  The Mikey fear factor of 93 says that the traders are not looking for anything big on the downside.  Bull/Bear readings are in favor of the Bulls 1.57 to 1, meaning that again the traders are not worried.

    In conclusion, the market has just given an intermediate term sell signal and nobody cares. I would not be long with these kinds of readings.  The Ca Muni bond market looks shakey. It is very close to a sell signal I would honor that sell if we got it. Nat Gas resetablished its daily uptrend and rallied .17. The GDX miners index was much weaker than Gold and Silver and traded near last weeks lows. The dollar index 81.13 is back up to its Sept breakdown and just below a intermediate term uptrend both come with a trade above 81.50.  There is alot of red in the world stocks section.

    Mikey
    DJI Trend Summary
    Daily Downtrend 13344 on 10-23 
    Intermediate Downtrend  at 12932 on 11-7 5 days old
    Long Term Uptrend 11315 on 11-1-10 2 years old
    Last high 9-14 13653  Last Low  11-9 12743
    20 day average rallies since downtrend began  0
    50 day averge rallies since uptrend  began 0
    IBD Market in correction 10-13 13344
     Long Term UP/ Intermediate Term Up/ Daily Trend Down/Short Term up
    DJI Close 12756.18 -58.90
    Step up range: 13043 - 13344
    Current trading range 12743 - 13043
    Step down support range 12300-12966

    Average watch
    50 Hour Ave: 12955 Price below
    20 Day Ave: 13153 Price below
    50 Day Ave: 13317 Price below (no long positions if this line is red)
    20 Week Ave: 13162 Price below
    50 Week Ave: 12896 Price below
    200 Week Ave 10973 Price above

    Overbought/Oversold Oscillator(Mikey reading) +150  to -150
    Take profits  at +150 readings  buy or cover at -150 readings
    3 day -52 N  7 day -93 N 20 day -17 N  50 day +45
    MACD Readings
    MACD Crosses: Negative cross = consolidation/correction Positive cross=uptrend
    Short term (50 hour) down (29 Hrs) signal 11-7
    MACD Hourly -37.44
    Daily trend (50 day) Down 15 days 10-23-12
    MACD Daily -153.30 Negative cross 9-26
    Intermediate trend (50 week) Down (5 days).signal 11-7 12400
    MACD Weekly (+73.62) Negative cross  10-23-12
    Long term trend (200 week) Up (23 months)...signal 12/1/10 11577
    MACD Monthly (+515.76) Negative Cross 11/8/12.

    Volume Readings
    Volume (Millions) NYSE 3388  NASDAQ 1769
    Advance/Decline NYSE -1068 NASDAQ -866
    Mikey NYSE A/D line +62002 Mikey NASDAQ A/D line -18451
    Trader Psychology
    Put/Call day .92 10 day .86 Put Prem/Call Prem  1.18 10 day 1.04
    Bull/Bear Ratio 1.57  Bulls 43.6 %, Bears 27.7%
    Mutial Funds Buy/Redeem ratio 1.15
    VIX 16.65 VXZ 31.15 Trin  .89 10 day ave 1.24
    Mikey Fear 93 (20 high, 80 low)
    New Highs NYSE 43  NASDAQ 22  New Lows NYSE 134 NASDAQ 136
    % Stocks above 200 day ave 50% (above 50% intermediate term uptrend)

    Closing Prices
     
    US Stocks
    DJIA 12756.18 -58.90 S/P 500 1374.53 -5.5  NASDAQ 2883.89 -20.37
    DJT 5054.71 -3.76 DJU 445.83 +1.83
    US Debt Markets
    US Gov rates: 6 mo .1420% 2 yr .2540% 5 yr .6235% 10 yr 1.59% 30 yr  2.72
    IEF (US 7-10 yr) 108.94 +.09 TLT (20 yr) 126.50 +.31 High Yield 91.21 -.21
    MUB(NatMuni) 113.39 -.11 Cal Muni(NCA)10.51 -.12
    BND Total Bnd Ind 85.02 -.01
    Commodities 
    CRB Commodities Index 292.16 -.01
    Gold  1724.80 -6.10 Silver 32.49 -.03
    Copper 3.47 +.01 Platinum 1586.40 +19.90
    Oil 85.38 -.19 RBOB 2.65 -.02 Nat Gas 3.74 +.17
    US Dollar Index and World Currencies
    Euro 1.2615 -.0008 Pound 1.5707 -.0010 Swiss Franc 1.0385 +.0004
    Yen .12363 +.0015 Aussie 1.0439 +.0004 Canadian Dollar  .9926 -.0025
    Dollar Index 81.13 +.02
     
    All Market Trends:

    Commodities
    Gold:      LongTerm/ 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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