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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 5, 2008

Jobs Bad Oh MY!!!..Keep your eye on the Financials

Stocks fell sharply Friday after the biggest monthly job loss in 34 years and the highest percentage of delinquent mortgages on record.

The Dow Jones Industrial Average opened down about 90 points after the jobs report then doubled that after the mortgage-delinquency report came out at 10am.

The Dow dropped more than 215 points in the previous session, snapping a two-day winning streak.


Major U.S. Indexes.DJIA8193.05-183.19-2.19%315,001,000.NCOMP1419.8-25.76-1.78%225,030,300.SPX827.24-17.98-2.13%1,167,713,500

The number of delinquent mortgage loans, which means at least one payment past due, jumped to 6.99 percent in the third quarter from 5.59 percent a year earlier, the Mortgage Bankers Association reported. That was the highest in the history of the MBA survey. The number of mortgages in foreclosure rose to 2.97 percent from 1.69 percent a year ago.

Subprime mortgages were one of the biggest culprits, with 20 percent of those mortgages in delinquency.

"We haven't gone into past recessions with a housing market in as bad of a shape," Jay Brinkmann, chief economist at the MBA, told Reuters in an interview.

Economists said that job losses will only exacerbate mortgage deliquencies and foreclosures in the coming months.

Employers cut 533,000 jobs from nonfarm payrolls in November, the sharpest job loss since December 1974 and much more than the 340,000 decline economists had expected. The unemployment rate rose to 6.7 percent from 6.5 percent.

The prior two months' job losses were revise to show that a total of 199,000 more jobs were lost than previously thought in September and October. That means 1.25 million jobs were lost in the last three months alone, bringing the total to nearly 2 million since the start of the year.

"This is an eye-poppingly bad number," Art Hogan, chief market analyst at Jefferies, told CNBC. "Everybody seems to be coming out and cutting 10-percent of their workforce — at least. ... Does that mean we’re going to see on average for the next six months a job-loss number in the 500s? No. I think we stabilize at some point, probably in the first half of next year where that number is going to start to work its way back to the 200,000-job (loss) range."

Hogan added that the stimulus packages being worked on now, which will get dumped on the Obama administration’s lap on day one, will help make that happen, as opposed to having to wait to see what the administration does in the first 100 days.

DJIA 8181 -196
Financial index XLF 11.88 +.01 UYG 5.29 -.02 XHB(Housing ETF) 12.22 -.28

Tail end stocks nearsing lows..oil ..commdoities. Financials Housing Showing strength. Watch these to give clues about DJIA.
Of course, I am biased but as I look at these charts I see that they are turning up
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