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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

Friday, January 4, 2013

Fed pours cold water on rally props up dollar


For Thursday 1-4

It is looking more and more to me that the Fed has a trading range it wants with assets and the dollar.  It appears that we are at the top end of that range with stocks and commodities and the lower end of the range for the dollar. That being said the Fed came out yesterday and expressed concern about inflation and poured cold water on the rally in stocks.

 Gold and Silver both were hit and returned to downtrends which makes them look very weak right now. They both have broken, returned to their breakdowns and have now rolled over.  A follow through from here could make for a severe downward move.   Bonds continued to retreat with 30 year rates hitting 3.13 and 10 year rates closing at 1.92.  Those rates are the highest since May and show some lack of support by the Fed in the bond market.

Technically the Mikey 3 is at whopping 205 but all other periods are neutral.  75% of all stocks are above their 200 day and the Mikey fear is at 102 which means that the only fear being shown out there is by the shorts. Put premium has melted to 73 and the put/call ratio is at a tame 81 on the 10 day. The DJI at 13391 is 270 points off of its highs in Sept and 900 above its lows in November.

In summary, I would think that we are close to the top end of a Fed created trading range and that upside is limited at this time.  The dollar turned up on the daily today an with the weakness in the metals I am shorting AEM today and adding to my Gold short.

Mikey

    DJI Trend Summary
    Hourly Uptrend: 13104 12-31 (12 hrs)
    Daily Uptrend: 13412 on 1-2 (1 days)
    Intermediate Uptrend: at 13412 on 1-2(1 days)
    Long Term Uptrend 11315 on 11-1-10  2 years + 2 months
    IBD Market in confirmed uptrend 13104 12-31
    Long Term UP/ Intermediate down/ Daily Down/Short Term Down
    DJI Close 13391.36 -21.19

    Current Trading range   13043 - 13660
    Step Down trading Range 12471- 13043

    Average watch
    50 Hour Ave: 13153 Price above
    20 Day Ave: 13208  Price above
    50 Day Ave: 13055 Price above (no long positions if this line is red)
    20 Week Ave: 13195 Price above
    50 Week Ave: 13008 Price above
    200 Week Ave 11287 Price above
    Last high 9-14 13653 Last Low 11-15 12471 
     
    MACD 
    Short term (50 hour) Uptrend(14 Hours)
    MACD +91.11
    Daily trend (50 day) Uptrend 2 days 1-2
    MACD Daily +67.49 Positive Cross 1-3
    Intermediate trend (50 week) Up (2 days).signal 12-31 13104
    MACD Weekly (+58.03) Negative cross  10-23-12
    Long term trend (200 week) Up 25 months)...signal 12/1/10 11577
    MACD Monthly (+532.33) Negative Cross 11/8/12.
     
    Volume Readings
    Volume (Millions) NYSE 3730  NASDAQ 1730
    Advance/Decline NYSE +377 NASDAQ -96
    Mikey NYSE A/D line +72232 new high  Mikey NASDAQ A/D line -13081
    Trader Psychology
    Put/Call day .84 10 day .81 Put Prem/Call Prem .73 10 day .95
    Mikey 102 (Low fear 30 High Fear)VIX 14.56
    New Highs NYSE 305 NASDAQ 140 New Lows  NYSE 7 NASDAQ 12
      
    Closing Prices

    US Stocks
    DJIA 13391.36 -21.19 S/P 500 1459.37 -3.05 NASDAQ 3100.57 -11.69
    DJT 5469.93 +34.19 DJU 461.51 +.11
    US Debt Markets
    US Gov rates: 6 mo .145% 2 yr .271% 5 yr .725% 10 yr 1.93% 30 yr  3.13%
    IEF (US 7-10 yr) 106.44 -.55 TLT (20 yr) 117.66 -1.90 High Yield 93.93 -.30
    MUB(NatMuni) 111.84 +.04 Cal Muni(NCA)10.33 +.07
    BND Total Bnd Ind 83.65 -.25
    Commodities 
    CRB Commodities Index 295.65 -1.89
    Gold  1674.60 -14.20 Silver 30.72 -.29
    Copper 3.71 -.03 Platinum 1579.90 +9.90
    Oil 92.92 -.20 RBOB 2.79 - Nat Gas 3.20 -.03
    US Dollar Index
    Dollar Index 80.51 +.56
    US Dollar Long Term/ Intermediate Term/ Daily Trend/ Short term

    All Market Trends:
    Short term trading rules:
    Initiate long positions when Intermediate and Daily Trends are green AND the Short term turns green from yellow or red  (Caution: The signal is usually the second time it turns green)
    Take profits 3-5 days after 20 day high
    Enter  sell stop below the 20 day low or at 7% loss
    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
    US Corp BBB   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
    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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