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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, November 3, 2008

Here comes the Election ..What are they saying?

12:16 DJIA 9287 -35 uptrend VIX 54.76 topping Gold 725 +6.80 topping Oil 63.98 -3.83bottoming

This is what they are putting out on CNBC:

Stocks are likely to get a bounce after Tuesday's presidential election, but worries about the economy and credit crisis may keep the rally short.
CNBC.com
Barack Obama & John McCain
--------------------------------------------------------------------------------
While the election remains important to the market, expectations of a Democratic victory may already be priced in, market watchers say.
Polls have shown for weeks that Democrat Barack Obama has a fairly substantial lead, so analysts think only an upset win by Republican John McCain could have a significant impact on stocks.
"I'm not necessarily sure we're going to see a significant change in the next week, primarily because I think the market's already betting on a Democratic win and it would only be a Republican win that could change the market in the short term," says Michael Kresh, president of M.D. Kresh Financial Services in Islandia, N.Y.
Kresh thinks Wall Street already has rendered its verdict on the prospect of an Obama victory and the Democrats retaining control over Congress.

"I believe that the market believes that a Democratic Congress and a Democratic president is probably not a good thing," Kresh says. "If the market is nervous about that, it should already be reflected in the market. And a McCain election would be a surprise."

What they are saying is there will be a short bounce and the only way the market will rally is if McCain wins. I will buy the pullback if Obama wins. I hope we can selloff to below 9000. If McCain wins and we rally to 10000 I sell. Those are my parameters for the near term.
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