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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, October 22, 2008

Five reasons I like Citibank (C) 13.50

1) Goldman Sacs downgraded them today...these guys are never right
2) The treasury put 25 billion in their vault this week
3) Mortgage rates are going to drop to 4 to 4.5% for the 30 year.
4) Banks only need to reserve $1 for every $10 on deposit Multiple 25 billion times 10. That is what they will loan out in new loans earning interest on all of them.
5) The US government is a part owner... they will win on this one.

I like all the banks (XLF) the same applies to Goldman and Morgan Stanley. see my Blog..The World is saved of Oct 14th from last week about the bailout money being deposited 6 banks.
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