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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 9, 2008

My comment: Lou who zerrrrrrrrrrrr!!!!

Investors fearful of deflation and riskier assets scrambled to hand over cash to the U.S. Treasury in return for no interest at an auction Tuesday, while some T-bill rates fell below zero in the market.

Pressures on fund managers to stock up on the safest possible assets in advance of year-end book-balancing added to the bid for government securities, traders said.

The U.S. Treasury Department said it sold four-week bills at a high rate of 0.000 percent, a level never before seen, in a $30 billion auction. Watch the accompanying video for more.

When Treasury bill rates turn negative it shows that investors are so concerned about the safety of other assets that they are willing to effectively pay the U.S. government a fee to look after their money.

Rates for three-month bills in the market fell below zero, according to fixed-income trading platform Tradeweb.


RELATED LINKS


"There is just a continuing flight to safety with money that needs to be invested. Money funds want it to be invested rather than under the mattress, which is continuing to push rates lower,'' said Lou Brien, a market strategist with DRW Trading Group in Chicago.

"There is the uncertainty of counterparty risk and concern over the possibility of deflation,'' he said.

Counterparty risk is the distrust among banks and other lenders that the party on the other side of a trade might not repay funds.


Bill rates fell to zero in mid-September when Lehman Brothers collapsed, sending panicked investors to the relative safety of government paper.

"There's still a ton of fear. People are now paying the government to take their money. Something is wrong,'' said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

"For the Treasury, it's great financing. For everyone, it's not a good sign that things will get better ...That's fool optimism. A quick recovery is not going to happen,'' said Rudy Narvas, senior strategist at 4Cast in New York.

I am putting out the word Mikey wants to borrow money and have you pay me. Give me a break!!!! What a racket and investors are betting against the Fed that can get money and all it wants for stinking nothing? I'll bet with the Fed on this one.
The beat goes on ...........Mikey
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