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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

Friday, November 14, 2008

Don't buy Citi (C) 9.45 Thanks for telling us

From CNBC.com
Citigroup is set for more declines after falling below the "critical and vital" support level of $10.40, which was its 1998 low, Royce Tostrams, technical analyst from Tostrams Groep, told CNBC Friday.
"It has triggered another sell signal which means the downtrend will be resumed and the conclusion is don't buy Citigroup yet. You have to remain on the sidelines," Tostrams told "Squawk Box Europe."
Shares of Citi [C 9.45 --- UNCH (0) ] closed at $9.45 on Thursday, having started the year just shy of $30. The next support level is around $3.50 a share, Tostrams said.
The bearish signal extends to the entire financial sector, according to Tostrams.
Tostrams expects the S&P 500 index to hold a sideways trading range in the short term and bounce between 839 and 1045 points.
"Turnover remains very low. There is no conviction in this market," he added.
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Critical and Vital WOW that must be really important. Hey and double bonus it extend to the whole financial sector. Wait a minute the experts said the stock was cheap at 35 as it broke down from its top but now at 9 bucks we have to sell if after the FED put 25 billion in the bank. The interesting thing is not that this Bozo is saying this but the timing of when they allowed him to come on TV and to pander to everyone' fears about the stock. Your "friends at CNBC all always there to keep you informed. An analogy is when you see T Boone on TV saying Oil is going to 200 it was believable but woops it went to $55.

Notice he says the next support was at 3.50. You know if you own it, now that is a long way for it to fall. What I have observed is that when a stock is either topping or bottoming right at the end of the move the "experts" are on TV telling you saying, you know that price move you just saw, well now, you are really going to see a big one and they pull a number out of their butt that makes you blink. Like when Oil was at the high I heard numbers as high as 500 on a super spike. It always happens at the end. Now Royce suddenly appears on CNBC telling us Citi is going to 3 and that was after our friends Goldman told us on OCT 22 that it was a sell. Go back and read Goldmans research a year ago and at that time the stock was cheap at 35.
This is the game that is played. This stock price is the result of panic selling and with the capital that has been placed in this bank, not to mention that the Government owns part of the damn thing, it is a strong, strong buy if you believe that the US banking system is going to survive.
The last time I saw this type of thing was in the 80's when the loans to South America and Mexico was going to take down the Money Center banks. It had the same feel to it as this does now. They were saying the same thing. I was buying Citi and Bof A in those days. The returns were huge. If you are looking to spot a bottom this kind of thing will happen every time.
By the way, Royce, my man, take a look a the charts the stock broke out in 1995 at guess what 9 bucks. That is support not 3.5
I am buying Citi today at the open ...Thanks Royce and CNBC for the heads up
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