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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

Monday, October 20, 2008

Traders still cautious

DJIA 9046 +146 VIX 58.25 Gold 795.50 +7.80 Oil 75.76 +3.91
Art Cashen trader expert trader on CNBC is still cautious and the credit markets are thawing but still no sense that this thing can go higher. Cashen sees resistance at S&P 975 and 980 and major resistance at 985. He is not convinced yet. Remember last week he thought we would retest 7700 well we are at 9046 and up 196 today. It is good until they figure it out lets hope the situation remains cloudy.
Notice oil rallying after thursday's on CNBC website call that it was going to 40.

DIG 34.18 10 day 34.40 20 day 48.29 20 day is target
UYM 24.20 10 day 24.32 20 day 34.40 20 day is target
UYG 10.43 10 day 14.12 20 day
SSO 32.32 and 40.48

These are only areas where I is see a pullback possible

12:43 DJIA 9148 +294 VIX 56.08 GOLD 794.50 +6.80 Oil 74.36 +2.51
VIX pulling back but still way too high to worry about. The rally continues.
Oil stocks rally as OPEC meets friday to cut production. Lets hope they do so we can sell the DIG and buy the DUG...the oil stock short.

Close DJIA 9265 +412 VIX 53.29 Gold 794.80 +7.10 Oil 74.61 + 2.76
If the Dow Jones Industrial Average does not close above 10,625 this month, it will be in a multi-year bear market and likely to be closer to the 5,000 level once the recession is over, a strategist told CNBC Monday.
From CNBC.com
"We've established a trading range (on the Dow Jones Industrial Average), although longer term we are in transition. We need to close above 10,625 this month otherwise we're confirming a multi-year bear market," said Richard Suttmeier, chief market strategist at ValuEngine.com. I am guessing that we close above that number by the end of Oct. and the world will be saved.

They are still looking for the pullback. The beat goes on ...Mikey
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1 comment:

jaxwhitey said...

You staying away from Covers Mikey?

It sucks there without you adding in your thoughts. Come back

October 20, 2008 at 1:02 PM

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