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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, October 31, 2008

Fear is leaving the Market uncertainty remains

8:13 DJAI 9212 +35.28 VIX 61.89 Gold 734.40 -4.10 Oil 95-.96

The VIX is reflecting the drop in fear levels now down to low 60's the credit markets are starting to function and the tone of the markets is starting to turn from fear to the world may not be comming to an end. The traders have not embraced the rally yet but are starting to look. Still early in this rally to worry. I am staying long the market and short Gold. Bought some GM today at 5.92

9:26 DJIA 9229 +48 VIX 60.13 Gold 728 -10.50 Oil 64.39 -1.57

Airline now in vouge DAL 11.20 above its 200 day and back to its March 10 breakdown.
Probably getting close to a near term top. The low was 4 bucks on Jul 16 you know when oil was going to 200. My My how things can change. I like the oils better now that its going to 40 don't you know Taking profit on DAL here. By the way GM is where DAL was in July so don't be surprised of GM is selling for 12 to 15 in 3 months
Hey Derrick looks good at this price for 1 unit

Hearing JP Morgan is stopping foreclosure will work out terms with those in trouble. This is going to expand to a kinder gentler banking system. Cumbaya Cumbuya

10:19 DJIA 9305 +125 VIX 58.90 Falling Gold 725.90 -12.60 Oil 64.23 -1.23
Through the 20 day next resistance is at the 50 day which is at 10300 "the breakdown".

10:39 Gold 720 -18.40 is on the window ledge and I am yelling Jump Jump Jump

11:39 DJIA 9360 +178 I want to document this. Art Cashen the technical market expert on CNBC says that he is not buying yet and will wait until the G 20 report on the strong dollar report on Nov 15 before he will get the all clear signal. You will get the all clear signal when the financial stocks...UYG XLF take off.

By the way when they give the all clear signal Mikey will be moving to the sidelines.
Next week I will do a blog and give you analogy of where I think this market is now

That's it for now ..The beat goes on....Mikey
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