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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 10, 2008

The T Boone Pickens of the Banking Industry... Then new Guru of the Obvious

Whitney: Banks On Life Support Next 18 Months
Influential bank analyst Meredith Whitney remains bearish about the economy, and her outlook for the banks that "lubricate the economy" is grim.

"The big banks are going to be on life support for at least 18 months, if not 36 months,"
Oppenheimer's executive director of equity research told CNBC Wednesday morning. "The big banks will not fail, but the big banks will not grow, in my opinion, for at least another two years."

She echoed other analysts who see the funds from the TARP program being used to fill holes, and do nothing to stimulate the economy.

"You've had massive asset deflation," she said. "There's more of this to come

Remember when T Boone said oil was going to 100 and it did and remember when T Boone said it was going to 120 and it did and remember when T Boone said oil was going to 150 and it almost did (148). Well T Boone and all that followed him are damn near broke now.
The new Guru of the obvious is Meredith Whitney. She has been saying bad things about the banking industry for a long tine now and has burst onto the seen as the Guru of banking. This is her last remark on banking. It is interesting that she has all of this credibility now and did not before. Hey Meridith I have some advise for you: Don't believe your own BS this time. She will overstay her spiel just like T Boone. I have seen this a million times a Guru emerges and gains their credibility on one major event and spends the next 20 years blowing people up. They end up on the scrap heap of the obvious. Richard Russell, T Boone, Joe Granville,Elain Garzerelli, ET Al.


DJIA 8815 +120 VIX 57.14 Gold 803.80 +29.60 Oil 44.26 +2.19
Meanwhile back in the market it looks to me that we have an intermediate advance going still climbing that Wall of Worry. Thanks for the worry Meridith

Regarding yesterday's post on the Treasury getting money for free because of deflation worries. That is the biggest joke I have seen in the last 35 years of watching the market. That will be the cover story for rallying the commodities market. I can hear them now ...Hey did you see the T Bill market trading at zero it must mean that this deflation thing is for real. DOE!!!! GIVE ME A BREAK.
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