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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, December 18, 2012

Mkt rallies back to Oct 22 breakdown AAPL reverses

    The DJI rallied back to its Oct 22 breakdown as the Feds put pressure on the shorts. Volume was heavy at 4.043 billion on the NYSE and 1.975 billion on the NASDAQ. If there are going to increases in capital gains taxes then this rally gives the investors with the largest tax brackets good prices to take profits.

    AAPL has reversed off of a double bottom breakdown and closed above its first break of 522.  I am long this stock with a tight stop of 500.  Gold continues its weakness closing at a 3 month low below 1700 at 1671.70. It closed at just above the 200 day average which I think will provide only minor support in the short term.  The talk is that investors are moving into stocks and selling Gold.  The Euro is now at. believe it or not, a 7 month high at 131.32. Get ready for some bullish talk to surface on the European situation.  The European market is now at a 1 1/2 year high.

    Oil 87.93,  is trying to claw its way back into an uptrend and needs to close above its 10-3 low of 88.54 to do so.  Bonds have broken its 200 day for the third time in the past 3 months and usually its 3 times and you are out.  Remember the Fed commitment to interest rates? Munis continue their weakness.

    This brings me to a point I cannot make enough. Do not listen the reason why things happen in the markets, follow the price action. If you would have played the Euro because of fundamentals you would have been short the whole year and getting your butt kicked. Stick with the trend and ignore the reasons. I think the applies to Gold now.  All the printing and problems and it is in a downtrend. Go with the trend and do not get hung up in the logic. Keep focused on the ALL TRENDS section of this blog and stay on the right side of the trade.

    Mikey
    DJI Trend Summary 
    Daily Uptrend  13248 on 12-11 
    Intermediate Uptrend at 13034 on 11-7 7 days old
    Long Term Uptrend 11315 on 11-1-10 2 years old
    Last high 9-14 13653  Last Low  11-15 12471
    20 day average sell offs  since uptrend began 
    50 day averageselloffs since uptrend began
    IBD Market in confirmed uptrend 11-23-12  13009
    Long Term UP/ Intermediate Term down/ Daily Trend Neutral/Short Term up
    DJI Close 13350.96 + 115.56
    Step up range: 13344 - 13650
    Current trading range 13043 - 13344
    Step down support range 12471- 12973

    Average watch
    50 Hour Ave: 13227 Price above
    20 Day Ave: 13062 Price above
    50 Day Ave: 13109 Price above (no long positions if this line is red)
    20 Week Ave: 13197 Price above
    50 Week Ave: 12987 Price above
    200 Week Ave 11056 Price above

    Overbought/Oversold Oscillator(Mikey reading) +150  to -150
    Take profits  at +150 readings  buy or cover at -150 readings
    3 day +92 N  7 day +69 N 20 day +109 N  50 day +43 N
    MACD Readings
    MACD Crosses: Negative cross = consolidation/correction Positive cross=uptrend
    Short term (50 hour)down (6 Hrs) signal 12-14
    MACD Hourly +40.20
    Daily trend (50 day) Up 7 days 12-11
    MACD Daily +64.19 Positive Cross 11-23
    Intermediate trend (50 week) up (10 days).signal 12-5 12932
    MACD Weekly (+63.69) Negative cross  10-23-12
    Long term trend (200 week) Up 25 months)...signal 12/1/10 11577
    MACD Monthly (+540.29) Negative Cross 11/8/12.

    Volume Readings
    Volume (Millions) NYSE 4043  NASDAQ 1975
    Advance/Decline NYSE +1455 NASDAQ +1100
    Mikey NYSE A/D line +69934 (New High) Mikey NASDAQ A/D line -13735
    Trader Psychology
    Put/Call day .62 10 day .69  Put Prem/Call Prem .90  10 day .99
    New Highs NYSE 194   NASDAQ 100  New Lows  NYSE 20 NASDAQ 18
      
    Closing Prices

    US Stocks
    DJIA 13350.96 +115.56 S/P 500 1446.79 +16.43 NASDAQ 3054.53 +43.93
    DJT 5310.75 +84.24  DJU 461.34 +4.15
    US Debt Markets
    US Gov rates: 6 mo .145% 2 yr .246% 5 yr .69% 10 yr 1.82% 30 yr  3.00%
    IEF (US 7-10 yr) 107.12 -.42 TLT (20 yr) 120.51 -1.24 High Yield 93.67 +.05
    MUB(NatMuni) 109.79 -.36  Cal Muni(NCA)10.09 +.01
    BND Total Bnd Ind 84.20 -.19
    Commodities 
    CRB Commodities Index 296.59 +1.05
    Gold  1671.20 -26.50 Silver 31.67 -.61
    Copper 3.65 -.01 Platinum 1591.70 -23.80
    Oil 87.93 +.73 RBOB 2.69 +.02 Nat Gas 3.42 +.06
    US Dollar Index and World Currencies
    Euro 1.3121 +.0066  Pound 1.6070 +.0043 Swiss Franc 1.0769 +.0048
    Yen .11647 -.0050 Aussie 1.0558 -.0016 Canadian Dollar  1.0086 -.0022
    Dollar Index 79.33 -.53
     
    All Market Trends:
    (Initiate long positions when Intermediate term and Daily Trend is green AND the Short term turns green from yellow or red)
    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
    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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