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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

Friday, February 6, 2009

GE 11.60 is a stinking buy...They always do this at the lows

GE Facing Dividend Cut, Lowered Price: Analyst

If General Electric loses its coveted triple-A credit rating, which many on Wall Street regard as likely, its $1.24-per-share annual dividend may be next to go, a J.P. Morgan analyst suggested Friday.

In a note to clients, Stephen Tusa said he regarded the loss of the U.S. conglomerate's AAA debt ratings from Standard & Poor's and Moody's Investors Service to be "nearly a foregone conclusion."

Moody's last month joined S&P in putting GE's credit ratings on review. A downgrade could make it more difficult and costly for its GE Capital finance unit to borrow money.

Fairfield, Connecticut-based GE [GE 11.32 0.47 (+4.31%) ] has repeatedly stated its commitment to keeping both, and Chief Executive Jeff Immelt said in New York on Thursday that the world's largest maker of jet engines and electricity-producing turbines had ample cash flow to pay the dividend. He declined to comment on whether he has considered the benefits of cutting that payout.

GE is the parent of CNBC and CNBC.com.

But Tusa said it may be time for GE to reconsider.

"We think that this is another losing battle for GE in 2009, and quite frankly, one that is just not worth fighting," he wrote, saying the company might earn better long-term returns by using that cash to make acquisitions at a time when share prices around the world have been battered down.

Fundamental Pressure

Fundamental pressure continues to mount on GE'S earnings stream, both at GE Capital and at its industrial businesses, said Tusa, who cut his price target on the stock to $9 from $13.

Tusa said the rating loss and dividend cut could be a catalyst for change, possibly including a portfolio restructuring. He kept his "neutral" rating on the stock.

Mikey says: The rating agencies are always a day late and a dollar short. They should have cut the damn rating a year ago. This is yesterdays news. As far as the dividend goes so what the assets are marked down to reflect all of that. I hope they do and am sure they will cut the dividend hell I'll buy more.
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