Posting Times

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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 14, 2008

The world is saved

Now profitable on SSO UYG XLF MS positions selling 3/4 of these to reduce exposure near the open.

From CNBC.com:
The US government Tuesday outlined three new initiatives to aid financial institutions amid a historic credit crunch that has frozen lending around the world, which fundamentally change the nation's historic hands-off relationship between government and the private sector.

The moves include a recapitalization of banks, federal guarantees on new bank debt for three years and FDIC insurance for non-interest bearing accounts, mirroring measures taken by other members of the Group of Seven nations.

In a morning news conference Tuesday, President Bush outlined what he called "unprecedented steps" as part of a "coordinated plan of action."

"Each of these new programs contains safeguards to protect the taxpayers," said Bush. "The government's role will be limited and temporary."

Though the bulk of the efforts are directed at financial institutions, Bush made sure to mention that the moves would also help retirement accounts, college savings and small business.

Market watchers applauded the measures, even though critics say the size of the recapitalization plan may be a bit small given the size of the industry and its astronomical amount of outstanding debt.
Revised Rescue Plan at a Glance

U.S. Treasury says to buy up to $250 billion in senior preferred, nonvoting shares in financial institutions.
Treasury says maximum purchase amount will be $25 billion per institution.
Treasury sets deadline of Nov 14 for banks to participate in equity purchase program.
Treasury says preferred shares to pay 5 percent a year for first 5 years, 9 percent after 5 years.
Treasury says firms in program must adopt Treasury's standards executive pay, corporate governance.
Treasury says for firms in program, compensation for top execs won't be tax deductible above $500,000.
Bush said the funding will come from the $700 billion set aside for an auction plan under the emergency legislation of two weeks ago. Participating institutions will also have to abide by the law's restrictions on CEO compensation, including a ban on golden parachutes.

The recap plan is open to participants only until Nov. 14. It has a a maximum of $25 billion for any one institution.

The government will get preferred stock for its equity stake, but without voting rights, which it can redeem after three years.
Under the plan, the US government would take $25 billion in preferred stock in Bank of America [BAC 25.75 2.96 (+12.99%)], Wells Fargo [WFC 33.59 3.19 (+10.49%)], Citigroup [C 18.01 2.26 (+14.35%)], JPMorgan Chase [JPM 40.91 -1.08 (-2.57%)], Goldman Sachs [GS 125.20 14.20 (+12.79%)], Morgan Stanley [MS 22.68 4.58 (+25.3%)] and Bank of New York [BK 32.83 2.15 (+7.01%)].

The above mentioned banks are your long term winners.

6:53 Sold UYG 12.85 MS 22.75 XLF 17.65 SSO 38.90 will eval after the dust settles.
Think we go higher but reducing exposure in here
7:21 DJIA 9534 +145 VIX 63.99 GOLD 837.50 -5 OIL 82.03 +.84
I want to make it clear I think we go higher but I got over exposed on this hit and had to make 6 buys on the positions I sold this AM just reducing these to give me more flexibility. The major trend is down and the market got extremely oversold I made a mistake in trying to play a rally I thought was going to happen into the election. I want to be short to get with the major trend and will be looking to do so at some point in the future. I am looking at the DUG (OIL Stock double short ETF)now at 45.75 want it at 41 to start the positioning. You know 1/4 position etc. This one had a high of 86 friday and will see that again. Also want to buy DXD 74 (double short DJIA ETF) but want it at 63 for 1/4 its high friday was 111 and will see that again. But that is in the future. I am expecting the market to hold up for the next 2months. But will eval after I hear more. Lets see if they like this rally or they say it won't last. I am listening will let you know what I hear.
One thing I think is going to happen is that the volitility of the market is going to slow way down.

12:23 DJIA 9235 - 149 VIX 57.21 Gold 841.60- .90 Oil 79.19 -2.02
I like this action will put in a buy on the SSO at 32.5 1/4 buy starting all over again
12;41 XLF ..financials clearly standing out as a high relative strength group XLF 17.08 + .83 UYG 12.35 + 1.35
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