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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

Wednesday, December 3, 2008

Point Counter Point

Point...Old News
Job Weakness, RIMM Outlook Pound Stocks
Stocks opened sharply lower as the looming spectre of disastrous job numbers hindered hopes for a December rally. Major indexes were off about 1.5 percent each, with weakness centered on large banks and technology, where a gloomy outlook from Research in Motion dragged the Nasdaq tech barometer down more than 30 points.

Major U.S. Indexes.DJIA8280.11-138.98-1.65%148,402,000.NCOMP1426.8-23.00-1.59%101,932,600.SPX832.22-16.59-1.95%509,406,000
As the market awaits Friday's Labor Department jobs number, separate private reports showed joblessness in November hitting seven-year highs, while a productivity report indicated worker output slowing though not by as much as analysts had thought.

Counterpoint...New News
President-elect Barack Obama said his economic recovery plan would include tax cuts and increased federal spending, but speed was of the utmost importance. He also said that state governors would have a role in shaping the stimulus plan.
At the same time, mortgage applications staged their largest one-week surge ever, gaining 112 percent as refinancings soared 203 percent following aggressive government moves to buy mortgage-backed securities. Mortgage rates for a 30-year loan fell to 5.47 percent in November.

They keep telling us that the rally is not comming. I find that intersting because who in the hell is looking for a rally with all this bad news and the economy in a recession. I remain bullish and choose to look at the new news.

Stocks that interest me if we turn the corner are ABK 1.31, MBI 5.70, AIG 1.91, MTG 2.17, YRCW 4.50 DXO 3.07 BBY 19.92 RIMM 36.57 INTC 12.94 MS 12.59.

Added to MBI at 5.81
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