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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

Wednesday, March 25, 2009

New Home Sales Rise 4.7% and Durable Goods Orders Pop 3.4% in Surprising Gain

DJIA 7824 Vix 41.59 Gold 927 +3.30 Oil 52.69 -1.29 Dollar Index 84.26 -.07

Sales of newly built U.S. single-family homes unexpectedly rose at their fastest pace in 10 months in February, while prices fell by a record margin from a year ago, a government report showed on Wednesday.

The Commerce Department said sales rose 4.7 percent to a 337,000 annual pace, the fastest increase since April last year, from an upwardly revised 322,000 in January.

Despite the increase, February sales were the second lowest ever after the drop in January to the slowest pace in records going back to 1963, the department said.

Economists polled by Reuters had forecast sales at a 300,000 rate in February.

The median sales price in February fell a record 18.1 percent to $200,900 from a year earlier, the department said.

Thee median marks the half-way point, with half of all houses sold above that level and half below.

The inventory of homes available for sale in February was at 330,000, the smallest since June 2002. The February sales pace left the supply of homes available for sale at 12.2 month's worth.

Durable Goods Orders Pop 3.4% in Surprising Gain

New U.S. orders for long-lasting manufactured goods rose in February for first time in seven months, according to a government report Wednesday brought some cheer to an economy mired in recession.

The Commerce Department said durable goods orders rose 3.4 percent to $165.6 billion in February, the biggest increase since December 2007, after a revised 7.3 percent plunge the prior month, previously reported as a 4.5 percent decline.

This is the latest in a series of recent economic data indicating the downturn in the economy after a brutal fourth quarter appears to be moderating a bit.


Mikey says:
Lets see...Lower inventories higher sales lower mortgage rates = HIGHER HOME PRICES. You think that may help our problem? It is starting to kick in. With the lower housing prices and higher affordability and with the Fed buying down the mortgage and the toxic asset plan .... this thing is going to fly as soon as the nabobs of negativity WAKE THE HELL UP. By the way the XHB(housing ETF is 11.51 off of its low of 8.00 on March 9th.

The beat goes on ...Mikey
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