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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

Thursday, October 16, 2008

No Inflation..That was quick and lower rates..That's a good thing

On the inflation front, the government's Consumer Price Index was unchanged in September, following a 0.1 percent decline the previous month, which is better than the consensus forecast of 0.1 percent.
With more economists saying the economy is in recession, there's growing speculation that the Federal Reserve will cut interest rates again at its Oct. 29 meeting. The Fed's key federal funds rate is already down to 1.50 percent, following a half-point cut last week.

Just 3 short months ago inflation was out of control..remember. Gas was 4.60 a gallon and inflation was rampant. Well welcome to October where the new buzz words are deflation and recession. It shows you how things can change in 3 months. I'll bet that in 3 months..and I am betting...that the crisis will be a distant memory and everything will seem much better.
That is the way of the world. Inflation what inflation. How did that inflation play..(buy the oil stocks and commodities because of the Global growth and never ending demand for oil and commodities would drive prices higher and they would never come down again) work for the experts. Now the experts want you to be safe with your money. You know own Gold and buy bonds. I think in 3 months that one doesn't work either.

6:04 Looks like we open higher this AM

I think today the 600 billion starts comming into the markets..Lets see
6:38 DJIA 8606 +24 VIX 69.23 GOLD 821.60 -17.40 Oil 73.34 -1.20 RBOB Futures
Gold starting to crack here that's good news gang.

Oil stocks have been just clocked now the earning s are going to come in and I suspect they will be very good. Woops!!

7:17 DJIA 8464 -117 VIX 73.46 GOLD 803.60-35.40 Gasoline the RBOB futures are now 1.6847 -.10 Oil now 72.37 -2.12
The API weekly Oil inventory report comes today at about 7:30.
We will see Gas under 3 bucks very soon that's a good thing.

Stay positive gang the calvary is comming

A word about Delta (DAL)7.70 I think this company is a flat out winner after the merger and lower fuel cost. The seat capacity will be reduced and the company is designed to survive with oil at $100 since fuel costs represent such a big portion of costs the trip to $40 oil will make their bottom line go bonkers. I am buying and holding this one for the long term.

8:38 Oil 69.33 -5.21 Notice that the DIG is only down 1 now this is what happens the commodity follows the stocks down the Oil stocks have already discounted the oil move in advance and once oil cracks big people sell their oil stocks because they have a reason to. That is when we buy its getting close.
8:42 DJIA 8374 -200 Market feels good to me here
Fire 2 on DIG 25.10

9:13 The story on the credit markets is clearly improving now. Commercial paper rates are now falling.
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