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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

Wednesday, November 7, 2012

Intermediate term break


    Stocks broke down today and closed below the 7-27 breakout of 12960.  The daily and intermediate term trends are now down. To reverse up the DJI would have to trade above 13344.  This move coinsides with dollar strength and at this time appears that the Fed is more interested in lowering interest rates short term and is using stock sales proceeds to do it.  Long positions should be liquidated if you are a trend follower.  The trend may reverse back up but this discipline will protect capital at the expense of missing a turn. 

    There were 553 up and 2464 down today on the NYSE on expanded volume of 4.236 billion shares.  The NASDAQ had 374 up and 2120 down on 2.015 billion shares. This is the second crossing of the 200 day average this year with the last time being on 6/1.  That crossing was reversed 1 week later and remained above the 200 day until today. There are 56% of the stocks on the NYSE  above their 200 day average so  the breaking of the 200 day average could still be reversed.

    Gold and silver outperformed today on the notion that they are counter trend to the market.  This has not been the case for the past 4 years but it sounds good anyway. The trend on Gold is still up intermediate term so positions can be held but until it reverses above 1750 no longs should be added.  My personal opinion, which is frequently wrong, is that gold will follow the market down.

    The long term bond market turned an impressive performance, thanks Ben, and is now all green.  The utilities market has now given up the entire gain for the year. That is to say you would have been better off in cash earning nothing than to have been in utilities this year up to this point.

    In summary, it looks like the powers that be want to have the budget problem settled.  That would be the reason to tank stocks because it is an attention getter. It also gets the public looking at the shy politicians who would prefer to remain out of the spotlight so expect some dialog to take place soon. In the meantime, stay out of stocks below 13344.

    Mikey

    DJI Trend Summary
    Daily Downtrend 13344 on 10-23 
    Intermediate Uptrend  at 12400 on 6-7 20 weeks old
    Long Term Uptrend 11315 on 11-1-10 2 years old
    Last high 9-14 13653  Last Low  10-25 13039
    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 12932.73 -312.95
    Step up range: 13043- 13344
    Current trading range 12932 - 13043
    Step down support range 12300-12966

    Average watch
    50 Hour Ave: 13125 Price above
    20 Day Ave: 13267 Price below
    50 Day Ave: 13339 Price below(do not be long if this line is red)
    20 Week Ave: 13174 Price below
    50 Week Ave: 12883 Price above
    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 -22 N  7 day +25 N 20 day -9 N  50 day +68
    MACD Readings
    MACD Crosses: Negative cross = consolidation/correction Positive cross=uptrend
    Short term (50 hour) ,down (2 Hrs) signal 11-7
    MACD Hourly -52.52
    Daily trend (50 day) Down 9 days 10-23-12
    MACD Daily -90.38 Negative cross 9-26
    Intermediate trend (50 week) Up (19 weeks).signal 6-7 12400
    MACD Weekly (+125.20) Negative cross  10-23-12
    Long term trend (200 week) Up (23 months)...signal 12/1/10 11577
    MACD Monthly (+530.00) Positive Cross 9-1-09.

    Volume Readings
    Volume (Millions) NYSE 4236  NASDAQ 2015
    Advance/Decline NYSE -1911 NASDAQ -1746
    Mikey NYSE A/D line +64704  Mikey NASDAQ A/D line -16252
    Trader Psychology
    Put/Call day 1.09 10 day .86 Put Prem/Call Prem  .83 10 day 1.01
    Bull/Bear Ratio 1.57  Bulls 43.6 %, Bears 27.7%
    Mutial Funds Buy/Redeem ratio 1.15
    VIX 19.08 VXZ 31.95 Trin  2.31 10 day ave 1.25
    Mikey Fear 84 (20 high, 80 low)
    New Highs NYSE 73  NASDAQ 25  New Lows NYSE 83 NASDAQ 101
    % Stocks above 200 day ave 56% (above 50% intermediate term uptrend)

    Closing Prices
     
    US Stocks
    DJIA 12932.73 -312.95 S/P 500 1394.53 -33.86  NASDAQ 2937.29 -74.64
    DJT 5103.52 -100.12 DJU 452.30 -9.96
    US Debt Markets
    US Gov rates: 6 mo .1438% 2 yr .2736% 5 yr .6733% 10 yr 1.68% 30 yr  2.83
    IEF (US 7-10 yr) 108.31 +.92 TLT (20 yr) 124.04 + 2.25 High Yield 91.76 -.64
    MUB(NatMuni) 112.52 +.30   Cal Muni(NCA)10.60 +.19
    BND Total Bnd Ind 84.85 +.20
    Commodities 
    CRB Commodities Index 291.49 -5.68
    Gold  1714.00 -1.00 Silver 31.66 -.37
    Copper 3.44 -.07 Platinum 1539.50 -19.80
    Oil 84.44 -4.27 RBOB 2.59 -.08 Nat Gas 3.57 -.04
    US Dollar Index and World Currencies
    Euro 1.2684 -.0043 Pound 1.5816 -.0020 Swiss Franc 1.0414 -.0023
    Yen .012271 +.00057 Aussie 1.0419 -.0020 Canadian Dollar  .9983 -.0042
    Dollar Index 80.87 +.16
     
    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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