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

Friday, January 30, 2009

Rally....Failure....Rally...Failure

DJIA 8023 VIX 44.67 Gold 919.50 14.80 Oil 41.65 +.21 Dollar Index 86.45 +.70

Over the past week I have been hearing Bob Pasini saying you have to sell the rally in the bank stocks because every time they rally there is a selloff. He said the same thing about oil in June and July every time they selloff you have to buy because they always rally back up. That continued until it didn't. The point is that that is the way a bottom or top is set. Before you can rally the traders must be made to sell into the rally. How many of those rallies does it take. It is hard to say but when the rally really comes you won't believe it.

Now it is a waiting game. They need to pump more private equity into the banking system. That is being hinted now. If we are to be a capitalist system they need to do it. Capitalism is much preferred over socialism because it is easier to pull off. If they want to put Humpty Dumpty back together again THEY NEED PRIVATE EQUITY PUMPED INTO THE BANKS. To get private equity to come back they need confidence in the banking system to return. Confidence = higher bank stock prices.
It is just a matter of time until this happens. I believe that the time for that to happen is coming near. I say that because Pasini is saying you have to sell the rallies in the banks.

This does not mean that the banks will not make new lows here but I believe the rally that they need is getting closer. I also believe that the rally is going to be alot bigger than most people believe.
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)