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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 18, 2008

GE Debt Downgraded.OOOOOOOH MY!!! The Wall of Worry is alive

The S&P down graded GE debt OHHHHH MY!!!!!!!!! What do I do Mikey..... I don't know but I will wait 2 days and buy the Hell out of it. This has been a public service announcement by Mikey on the Mikey broadcasting network. I like the stock and the debt.
This adds to the wall of worry. There is no focus on the collapsing mortgage rates and the thawing of the credit markets though. Remember that biggy. The big thaw is starting. This news on GE and Madoff scandal is a diversion. Keep your eye on the ball low rates and lots of money is here and it WILL make a difference.They have already taken the focus off the Fed cut and statement.I will use sell offs on this kind of bad news to add on to my positions bought DXO at 2.79 today looking to buy GE and INTC and SSO over the next couple of trading days. The beat goes on ....Mikey
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