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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

Monday, December 1, 2008

This just in...We are in a recession.. The Big Con

The National Bureau of Economic Research says the recession began in Dec 2007. Go back and read the comments by Bernakie and Bush for the last half of 2007. This was after the blow up in the subprime markets in early 2007. Now is the opposite of the early 2007 time period. Thre is a repairing of the financial markets but the economy is not OK.
Gold is getting wacked again giving us the impression that deflation is comming. This is part of the reason that they can raise money so cheaply. The Fed wants to give the impression that there is a deflation and you need to be safe with your money. The net result is that all the money runs into US treasuries and lets them finance the next expansion for nothing. The TARP is being financed with cheap rates. At the same time the governments are buying an equity position in everything at fire sale prices.
Give me unlimited amounts of money at 10 year rates of 1.8% and I think I will be OK. In a couple of years this is what we will look back on but few will remember. The beat goes on...Mikey
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