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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, December 11, 2008

Deflation takes a break.. "Money for nothing and the Chicks for free"

DJIA 8723 -39 VIX 55.72 (rolling Over) Gold 827.30 Oil 45.71 +2.19

If you are watching the commodities and the UYM and DIG you see definite strength over the past 4 days. Money for free will do it every time.

"Money for nothing and the chicks for free".
We gotta install microwave ovens
Custom kitchens deliveries
We gotta move these refrigerators
We gotta move these color tvs

That is the new motto for the Fed. Lets see how deflation does in this kind of environment. The dollar doesn't like it but the economy will
Getting pullbacks on the financials now looking for a place to add on to these. Free money helps everything now. Looking to buy FDX after bad news yesterday but it is out in front so will wait for some sign of a turn....Mikey

By the way regarding my call of 9900. It is not going to happen real soon . I would expect some backing and filling first. I think we are in an intermediate advance and they will keep the news bad for a while. You will know when to sell because they will tell you that everything is going to be OK. We are a long way from that now. So I still have the safety clicked on on the sell trigger. I am looking to add on on AA and IP on any pullbacks. IP in the low's 11's and AA in the low 9's
PS A gallon of Gas will hit 1.90 soon
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