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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

Tuesday, February 17, 2009

The stimulus package passes the TARP passes and.......

DJIA 7579 -270 Gold 969.10 +26.90 Oil 34.85 -2.66 Dollar Index 88.06 +1.10

The market heads for the low, Gold heads for the high, the dollar breaks out, bonds take off and the 30 year falls to 3.45%. There is talk of nationalition of the banks, the real estate market is being painted as hopeless, another finacial scandal is coming to light with Sanford Financial being closed.

That is the news background for today. It appears to be hopeless. Where is the money going from the public? Into cash, bonds and gold. The public has never been right. My bet stays with the Market and the financials and short gold. ...Mikey
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