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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, November 1, 2012

Short term signals turn up ahead of jobs report

Stocks rallied and new highs expanded to 218 on the NYSE with net plus AD of 1637.  It was an impressive rally and the type of rally back you normally get after the first sell signal. The DJU sold off to 472.93 -6.47 and interest rates rose. There is, I believe, a big interest rate risk on the horizon. and the public has invested 10 to 1 in bonds and income over growth stocks.

Typically the next rally will be to the old highs and will set up  a  MACD divergence.  I have said never chase the first signal and the first sell signal by IBD.  I would expect this rally to spook the shorts and IBD to give a market in confirmed uptrend soon.  The sell signal comes when the MACD crosses back down.

Mikey 
     
    DJI Trend Summary
    Daily Downtrend 13344 on 10-23 6 days
    Intermediate Uptrend  at 12400 on 6-7 19 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 13232.62 +136.16
    Step up range: 13295- 13653
    Current trading range 12966 - 13344
    Step down support range 12300-12966

    Average watch
    50 Hour Ave: 13156 Price above
    20 Day Ave: 13361 Price below
    50 Day Ave: 13343 Price below(do not be long if this line is red)
    20 Week Ave:13143 Price below
    50 Week Ave: 12852 Price above
    200 Week Ave 11031 Price above

    Overbought/Oversold Oscillator(Mikey reading) +150  to -150
    Take profits  at +150 readings  buy or cover at -150 readings
    3 day +105 N  7 day +41 N 20 day +32 N  50 day +73 N

    MACD Readings
    MACD Crosses: Negative cross = consolidation/correction Positive cross=uptrend
    Short term (50 hour) ,up (7 Hrs) signal 11-1
    MACD Hourly +20.29
    Daily trend (50 day) Down 5 days 10-23-12
    MACD Daily -70.65 Negative cross 9-26
    Intermediate trend (50 week) Up (19 weeks).signal 6-7 12400
    MACD Weekly (+188.89) Negative cross  10-23-12
    Long term trend (200 week) Up (22 months)...signal 12/1/10 11577
    MACD Monthly (+553.56) Positive Cross 9-1-09

    Volume Readings
    Volume (Millions) NYSE 3716 NASDAQ 1826
    Advance/Decline NYSE + 1637  NASDAQ +760
    Mikey NYSE A/D line +66454  Mikey NASDAQ A/D line -14632
    Trader Psychology
    Put/Call day .81 10 day .90 Put Prem/Call Prem 1.09 10 day 1.00
    Bull/Bear Ratio 1.50  Bulls 41.5 %, Bears 27.7%
    Mutial Funds Buy/Redeem ratio 1.15
    VIX 16.69 VXZ 30.08 Trin .83 10 day ave 1.32
    Mikey Fear  93 (20 high, 80 low)
    New Highs NYSE 218  NASDAQ 95 New Lows NYSE 31 NASDAQ 48
    % Stocks above 200 day ave 64% (above 50% intermediate term uptrend)

    Closing Prices
     
    US Stocks
    DJIA 13232.62 +136.16 S/P 500 1427.59 +15.43 NASDAQ 3020.06 +42.83
    DJT 5167.49 +82.46   DJU 472.93 -6.47
    US Debt Markets
    US Gov rates: 6 mo .1564% 2 yr .2853% 5 yr .7213% 10 yr 1.72 % 30 yr  2.89
    IEF (US 7-10 yr) 107.55 -.19 TLT (20 yr) 122.20 -.89 High Yield 92.42 +.34
    MUB(NatMuni) 111.97 -.02  Cal Muni(NCA)10.51 -.09
    BND Total Bnd Ind 84.71 -.18
    Commodities 
    CRB Commodities Index 296.88 +1.04
    Gold  1715.20 Silver 32.25 -.06 Copper 3.55 +.03  Platinum 1573.20 -4.80
    Oil 87.09 +.98 RBOB 2.62 -  Nat Gas 3.69 -
    US Dollar Index and World Currencies
    Euro 1.2849 -.0021 Pound 1.5953 -.0009 Swiss Franc 1.0560 -.0012
    Yen .012246 -.00048 Aussie 1.0405 +.0028 Canadian Dollar  .9977 +.0021
    Dollar Index 80.14 +.15 
     
    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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