Posting Times

Posts will be between 8:30 PM to 10:00 PM PST
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 13, 2008

Welcome to options expiration week

From CNBC.com
Money market rates eased on Monday after Europe's central banks said they would lend commercial banks as much U.S. dollar funding as they need.
In the latest joint bid to thaw frozen money markets the U.S. Federal Reserve, the European Central Bank, the Bank of England and the Swiss National Bank also scrapped their existing dollar auction systems and replaced them with a new fixed rate system.
"Counterparties in these operations will be able to borrow any amount they wish against the appropriate collateral in each jurisdiction," the Fed said in a st
"Central banks will continue to work together and are prepared to take whatever measures are necessary to provide sufficient liquidity in short-term funding markets." The Bank of Japan said it would also consider similar measures and the Fed said it would increase its currency swap lines with the ECB, SNB and BOE by an unspecified amount to fund the operations.

The moves were welcomed by traders and had an instant impact as three-month Libor dollar rates fell.

"I think they will be hugely helpful, to be honest and the market has a better feel today," said one London-based money market trader. "Given the fact that they are going to allot whatever you need it should bring levels down particularly at the short end."
The move follows top-level meetings over the weekend in Washington and Paris, where policymakers vowed to bring an end to the credit rout which is threatening to tip the global economy into recession.
After several high-profile bank collapses, fear of further failures is paralysing the normal bank-to-bank lending vital for keeping cash in circulation.

Doubts also remain about whether the raft of measures already announced—including historic coordinated interest rate cuts—will help.

My Take
Governments around the world are taking steps to restore investor confidence. When that confidence is restored I sell.

8:30 DJIA 8946 +500 We opened up 300 points and have been trading sideways to up now +500. Acting sluggish and still doubts about this rally. My take is we keep going up until they feel good about these moves. Lets hope the doubts persist for a while. What I am hearing is that they are not sure yet...that's good. Options expire this week lets see if the put buyers from the last 2 weeks are winners..I don't think so. We are going higher here. Should we reach 10200 this week I will reaccess my positions. If I move I will note it here. We are now 1100 points off the low now and there is still uncertainty I am not buying that shows respect too so I hold my positions that I bought last week and wait for better prices.
Gold 834 -25 is starting to realize that the world is not comming to an end at least for now. DZZ my Gold short now 32.35 + 1.20
Oil 80 +3 Bouncing I am looking to short this rally on oil by buying the DUG and the DTO will let you know.

I am looking to reshort NSC MCD and NKE the 3 shorts I covered last week
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