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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 7, 2008

Have you heard? The Economy is really really bad

9:38 DJIA 8840 +144 VIX 58.57 Gold 732.50 unch Oil 61.25 +.48

I thought I would tell you that in case you have been living in a cave. Bad Jobs, bad auto sales, bad retail sales, bad housing sales, bad jobs numbers, failing banks, failing insurance companies, bad government. You get the picture its bad. Now to top it all off Ford and GM have gut wrenching sales and earnings. Have I missed anything? We need a miracle right. As Al Michaels said do you believe in Miracles....YESSSSS. In the world of investing when you have a situation like this one miracles do happen.
I remain commited to the my long positions. I will buy when the opportunity presents itself. To me GM represents an opportunity to me. The wisdom of uncertainty guides my approach and I would say we have maximun uncertainty here.
Will buy GM on close today bought small piece of DXO(double oil long) today at 4.88.
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