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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

Thursday, November 20, 2008

On the edge of a cliff

DJIA 8106 VIX 73.83(amazingly oversold)Gold 751 +15 Oil 51.03 -2.59
We are hanging on to the lows at the last bastion of support before argameddon. It is one day before options expiration and the puts are salavating over all the bad news. For the past Eon they have never paid the puts in this situation. I don't expect the break now. Maybe going out of the next expiration but not now.
Bought my 5 th buy on the UYG at 4 bucks today..such a deal!! I'm gonna be rich I tell ya. I think before we launch the next rally the lows have to go so I am holding off any adds to the SSO or UYM or DIG positions. Everything else is the same.
I have been about as wrong as you can be on the short term lately. My thinking was that there would be an oversold bounce in the commoditites and the markets off the retest of 10000. I was looking for a bounce before the break but got caught up in the bailout hype. That obviously was a sucker play and I bit. I have taken some trades along the way but it has been a costly mistake to try to play a bounce on a bear market. That being said I now will go to war with them and will just keep buying until they pay me. That is were I am now. A nice break of the lows with alot of woe is me noise would give me the opportunity to load up again. For now I just wait and see which way they go with this one.

10:15 Auto loan agreement worked out in Senate GM 3.60 traded to 4. I expect it to seel off like everthing else that got bailed out.
10:21 Just kidding it make not be a deal a "non starter" by the House
Yuck Yuck
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