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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

Gloomy Earnings reported...What a surprise

Futures Fall Amid Gloomy Earnings Start
from a bevy of big-name companies Wednesday moved stock futures toward a lower open.
Futures, which already were well below fair market value, slipped further as earnings reports continued to come out and indicated a drop of more than 1 percent at the market open, though they were well off their lows.
Recent lows could be tested on the major indexes, Ben Lichtenstein, president from tradersaudio.com, told CNBC. The sheer amount of government intervention is leading some investors to fret about the bleakness of the economic picture, he said

This comes after an article yesterday that gives us 4 reasons why that was not a bottom. Only 4 I could come up with about 24.

6:34 DJIA 8819 -203 VIX 53 Gold 757 -11 69.04 -3.14

Looking to buy this pullback ..adding to DIG 30.50 UYG 9.78
DAL resistance at 11.50 Gold falling on its butt DZZ new high 38.28

10:14 DJIA 8704 -329 VIX 60.63 Gold 744 -23.90 Oil 67.78 -4.40
Experts saying don't invest now wait for 3 to 4 months because it will take time for this to work. Today it looks like the thing to say. But 3 to 4 months from now I think prices are alot higher. How is this going to happen..I don't have a clue no that's uncertainty.
Like FRE .85 Freddie Mac will start here at this price add if it sells off. Would not be surprised to see .30

10:55 8678 -356 VIX 60.63 Gold 722 -46 YEP 722 Oil 66.70-5.41
What I have been hearning for the past 2 weeks is that this is going to take a long time. THIS ECONOMY IS GOING TO V OUT OF HERE THAT'S RIGHT THE SLOW DOWN WILL BE OVER IN A BLINK!!!!! More on that in future blogs

Like the XLK in this area 15.75 Buying here

Todays selloff is masking the thaw in the credit markets. Libor is now 3.5 comming down in a hurry. Things are getting better and liquidity is increasing. The selling is hedge fund meeting margin calls. When that ends we will have EXCESS LIQUIDITY AND NO SELLERS.

DJIA 8465 -568 VIX 60.63 Gold 725.70 -72.70 Oil 66.75 -5.43
Selling waves to meet margin calls. The FED is on the buy side. Enough sail will elaborate tomarroe Peace out. The beat goes on Mikey
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