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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

Monday, February 9, 2009

Stocks sneaking higher on "Uncertainty"

DJIA 8297 VIX 43.21 GOLD 894 -19.70 Oil 40.56 +.39 Dollar Index 84.90-.74

All I can say is I love uncertainty and rising markets. It also appears that Gold is losing some steam here as it falls below 900. The hype has been buy Gold and the world is coming to an end. That is a bad bet. I am going out on a limb here and saying the world is not coming to an end and Gold gets its ass kicked. It would be a big negative if Gold traded below 850. I still think it is going to 400.

Bought GM 2.84 and IP 8.19 Friday. I think there are three areas they want pumped. The Banks, the Autos and Housing. I suspect that major tax incentives will give to those who buy cars or houses and the banks well you know about the banks I write about them almsot daily.
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