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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, November 25, 2008

Now that's a Bailout!..Where have you been Ben

Futures spiked following news that the Federal Reserve will create a facility to support consumer lending.

The Fed, in another massive life-support move to triage the U.S. financial system, on Tuesday announced a $600 billion program to buy mortgage-related debt and securities and a $200 billion facility to buy consumer debt securities.

The U.S. central bank said it would buy up to $100 billion in debt issued by Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, the government-sponsored mortgage finance enterprises. The Fed also said it would buy up to $500 billion in mortgage-backed securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae.
A government bailout for Citigroup and clarity on the incoming government's economic team helped the Dow Jones Industrial Average secure a 4.9 percent gain Monday, adding to Friday's near 500-point leap.

FNM .50 and FRE .62 look like a buy to me here at these price. I am not buying big just adding to my position. Still expect these to take time

This is good:
The two trading days mark the best performance for US stocks since the rebound after the 1987 crash. Despite the rally, many investors remained wary of further weakness to come

Citigroup [C 5.95 --- UNCH (0) ] shares clawed back much of their recent slump with a 57.8 percent one-day rally Monday. Investors welcomed government plans to guarantee over $300 billion of the bank's troubled assets and inject $20 billion from the TARP.

The stock held on to the gains in pre-market trading and indicated a gain of 1.3 percent and moving above the $6 mark.

One investor welcoming the government intervention and stock turnaround was Saudi Prince Alwaleed bin Talal. Talal, who is building a 5 percent stake in Citi and who told CNBC he has . The same thing happened in 1991 and he made 10 times his money.

A valid question at this point is why wait until now to do this. It was clear that we were in trouble 2 months ago. We need to take out the lows before they did this? I'll let you answer that question.
Posted by at

1 comment:

Anonymous said...

This should have been done a long time ago. The bailout is causing lenders to practically give away money. You would be surprised at how much cheap and in some cases "free" money is going around out there.

Bailouts for Everyone

November 25, 2008 at 1:24 PM

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