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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

Friday, December 19, 2008

Good News Corporate Bond market thawing and VIX breaking down

DJIA 8633+28 VIX 43.44 (alrighty) Gold 838 -22.60 Okeydokey Oil 42.31 +.64

Despite the Bad news Bernie good things are happening to credit markets. The focus has left this area but that is where the action really is. Bond funds are turning up in a hurry. The Fed statement was drowned out by Bad News Berie but it is the real deal. The VIX used to a topic of conversation has faded into the background as "concern" falls. The VIX is dropping in a hurry now and that is the real good measurement of what is going on now not the scandal.

Oil and Gold should go in opposite directions now. Oil clearly is bottoming to me and I bought the pullback of of the first move yesterday. I think the whole market bottomed and I will look to buy stocks that I like that get slammed in the near term. INTC and GE are on my buy list. Also, I am watching the banks like Citi because of the Scandal to buy on hits. Love the action here and I remain very buillish. The beat goes on Mikey
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