Posting Times

Posts will be between 8:30 PM to 10:00 PM PST
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

Tug of War

DJIA 8485 -341 VIX 62.01 Gold 783.60 -35.40 Oil 50.75 -3.68
The war of bad economic news vs goverment intervention continues. The news on the economy worsens and the response by the central banks increases. Current stock prices reflect the bad news and then some. The interesting thing is that the US is financing all of this stimulus with incredibally cheap money. The ten year note is 2.92 and the 30 year is 3.43. The idea by the system is to get money flowing into treasuries and out of equity. There is a change of ownership going on now. The cheap money will finance the next expansion and the new owners will reap the rewards.
The DJIA rallied above the 10 day average and slightly above the 20 day. The 10 day is at about 8330 where I think it will find support. I think last week broke the back of the decline and this is just a pullback off that move. Still holding long positions will keep you posted.
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)