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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

Thursday, January 15, 2009

Credit Cruch Part 2

DJIA 8222 +21.19 VIX 50.71 Gold 815 +6.20 Oil 35.03 -2.25 Dollar Index 84.52 +.11
COMMODITIES

OIL 35.03-2.25-6.04%
GAS 1.17170.004+0.34%
NG 4.817-0.153-3.08%
Gold 815.06.20+0.77%
SILVER 1056.59.00+0.86%


CURRENCIES
Euro 1.3164-0.0022-0.17%
Yen 89.730.70+0.79%
Pound 1.46560.005+0.34%
FRANC 1.12150.0057+0.51%
CANADA 1.25070.0025+0.2%

BONDS / TREASURIES
3-Mo .091---UNCH
2-Yr 0.7190.02
5-Yr 1.3710.02
10-Yr 2.2110.008
30-Yr 2.871-0.


Crescenzi: Is Another Credit Crunch Here?

Tony Crescenzi
Chief Bond Market Strategist
Miller Tabak + Co

There was only a fractional increase in 3-Libor this morning, but there are indications that it will increase much more at tomorrow's setting, a reflection of renewed concerns about financial companies, falling asset prices, and the health of the global economy.

3-month LIBOR was set at 1.08563% this morning, up a smidge from yesterday's 1.0825%, its lowest level in 5-1/2 years. Near-month Eurodollar futures, which are highly correlated with Libor, indicate the possibility of an increase of at least 5 basis points at tomorrow's setting, and possibly 8 or 9 basis points. Moreover, Tullett Prebon's latest brokered quote on 3-month Libor also suggests an increase of about 5 or 6 basis points.

Swap rates are higher, yet another indication of an increase in fear with respect to credit spreads and variable rates such as Libor.

This concern was apparent in credit spreads yesterday, where Bloomberg data show investment-grade credit spreads having widened for the first time since December 5th. Bloomberg cites Merrill's U.S. Corporate Master Index, which widened 3 basis points yesterday to 560 basis points following a 99 basis point narrowing since December 5th.


Hey Toniiiii last time the libor was at 5 points today it is at 1.08 its that worse or better. Fa-get about it Toniii. Come on Toni do the math.

Don't be fooled its getting better.


Mortgage rates?...

Interest rates on U.S. 30-year fixed-rate mortgages dropped for the 11th straight week to a record low, according to a survey released on Thursday by home funding company Freddie Mac.
Interest rates on the 30-year fixed-rate mortgage averaged 4.96 percent, with an average 0.7 point, for the week ending Jan. 15, down from the previous week's 5.01 percent, according to Freddie Mac.


AP
--------------------------------------------------------------------------------


Low mortgage rates have spurred a surge in home refinancing loans, and refinancing to lower monthly payments should provide a bit of relief to strapped consumers amid rising unemployment and a shrinking economy.

But the precipitous drop in mortgage rates has made only a marginal impact on demand for loans to purchase a home, offering little sign of a recovery from the worst housing downturn since the Great Depression.

What they are saying here is the lower rates don't matter. That is what they should say at this point. Mikey says they will matter

Mortgage rates have dropped dramatically ever since the Federal Reserve unveiled a plan last month to buy up to $500 billion of mortgage securities backed by government-sponsored enterprises, Fannie Mae, Freddie Mac, and Ginnie Mae. The program also entails buying up to $100 billion of debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

I have seen this movie many times it has a good ending....Mikey
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