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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

Tuesday, October 21, 2008

Today is story 2 day..the bad economy

From CNBC.com

6:24 Stock indexes indicated a lower opening as tepid earnings outlooks and worries over bank lending spread worry on Wall Street.
But worries over the health of the economy seemed to offset enthusiasm after news of a possible second stimulus package, and futures were still pointing lower.

6:42 DJIA 9169 -96 VIX 55.08 Gold 772.30 - 17.40 Oil 72.07 -2.18 Gold
Interbank Borrowing Costs Ease Broadly
The interbank cost of borrowing dollars, euros and sterling fell across all maturities on Tuesday, the British Bankers' Association's daily fixing showed.
This is telling us that the credit freeze is thawing.

The story is ping ponging back and forth between the thaw and the bad economy.
He's down he's up he's down no he's up. High drama ...a standard ploy...VIX still high we will go higher.
7:08 Like the techs here buying QLD 35.62 double QQQQ

Keep in mind the message to the public is be safe with your money. I am hearingthis market is too crazy to be in. These all fearful things and guess what the market is moving higher.

7:54 DJIA 9199 -70 VIX 53.66 Gold 777.20 -12.80 Oil 75.63 -1.76
Citibank (C)14.24 -.85 downgraded by Goldman that's funny I was just thinking of buying this one will let it settle and look to buy lower

8:42 DJIA 9196 -70 VIX 53.35 Gold 772.90 -17.10 Oil 70.80 -3.59
Talk of a Bretton Woods type of meeting surfaces. The original meeting created the international monetary fund. This is a further step into singular international control of banking. I don't even want to get into this now. Lets just say it further centralizes the world banking system.

9:59 DJIA 9032 -233 VIX 56.10 Gold 769.50 -20.50 Oil 70.73 -3.66
Pulling back to 10 day average at 8967

11:29 DJIA 9225 -39.90 VIX 51.93 Gold 772.50 -17.50 Oil 71.45 -2.94
Still like all my positions holding Hearing airlines reccoed they like DAL 10.06 it is breaking up through 200 day now starting to get some company.
Like the action in Alcoa (AA)12.56 Also action in oil stocks ...the DIG 36.19

Apple's (AAPL) 93.72 earnings hit after the close I am interested in this one but will not front run the earnings. If they are less than expected I will buy after a 2 or 3 day selloff.

From CNBC.com
The search of a market bottom likely will continue through the rest of the year and into 2009, as signs begin to emerge that a turning point is near but not yet upon Wall Street. I won't post the article here you can read it but I love seeing this article.

Close DJIA 9033 -232 VIX 53.11 Gold 767 -27 OIL 72.18
Posted by at

1 comment:

jaxwhitey said...

I like AA as well Mikey, those $15 calls for December ($.50) look especially nice. I will take chance at this moving higher than $15.50 in the next two months.

They beat this thing down to 1996 levels, unreal.

October 21, 2008 at 12:45 PM

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