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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, December 2, 2008

DJIA to rally 40%

Charts Predict: Dow 40% Rally to Start on Dec. 15
The Dow Industrial Average is poised for an extended bear-market rally that could see the index gain as much as 40 percent, Sandy Jadeja, chief market strategist at ODL Securities, told CNBC. But don't buy until December 15, Jadeja warned.
"There's a very very very strong rally in the making and it's going to last all the way up into next year into the July period," Jadeja said.
"We can see almost a 25 to 40 percent corrective rally coming up," he said.
The rally will start in or around the week of December 15, but there could be further weakness before then, Jadeja said.
The Dow [.DJIA 8178.64 29.55 (+0.36%) ] could slump to 6,800 or 6,400 in the next two weeks as the index forms a bottom before its half-year upswing, he said.

Once the Dow has rallied during the first half of the year it could then retest lows in the second half, he said.
Hey Jadeja if the rally started before then say last week you would miss it. I am not sweating the retest if it happens so be it.
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