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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 10, 2008

Lots of problems but market still closes 1000 points above lows

DJIA 8870 -73.27 VIX 59.98 Gold 746.20 +12
Its ugly out there. I mean Goldman is making a new low , GM is going to zero, Circuit City going bankrupt, woe is me. The news is not just rally bad it's scary isn't it? But that's the news from the last 3 months. The DJIA made its low on Oct 10th at 7894 we closed today at 8870. I think that in the next 3 months hope will return and so will higher prices. The beat goes on.....Mikey

Looking to buy Best Buy (BBY) on weakness at about 23.50 will let you know
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