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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, March 10, 2009

Bank rally?Bearish Banker Babe Meridith Whitney says 1st quarter will not hold.

They are bringing out all the bears on this rally as the Guru herself poop poos this rally and says that earnings in the first quarter will be temporary. She and everyone they bring on is throwing cold water on this rally. She says that Citi's capital position is stronger relative to how it was," said Whitney. "But I wouldn’t call it strong, and said that "I'm not optimistic about them." Whitney made her comment after being asked about Citi's Chief Executive Vikram Pandit saying he was confident about the troubled bank's survival prospects. She said Citigroup will have to sell more of its assets to stay in business. She also said that that credit cards are the next credit crunch and said that banks' portfolios continue to shrink and when you shrink the portfolios for the banks, "credit losses eat into earnings and they have to peddle faster to collect on loans and they make less money and lose money."

You know that is all very true Banker babe but the stocks are priced to go out of business. The news today I think tells you that they are going to survive and that means the prices of these banks will be marked up substantially even if earnings do not explode in the near term. That also goes for the market which is in my opinion should be priced at 10500.

Prices of secutities of note:

DJIA 6888 UYG 1.89 XLF 7.16 SSO 16.25 UYM 9.33 DIG 19.97 C 1.43 BAC 4.63 AA 6.07 IP 4.88 DDM 19.46 MBI 3.67 ABK .47 MTG 1.00 GM 1.80 GE 8.82 DZZ 23.46 INTC 13.80 DAL 4.71 FNM 40 FRE 40 XLK 14.02 QQQQ 27.35 Gold 895
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