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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

This just in ...The Pros are skeptical...Wink ...Wink

Citigroup Sparks Big Rally, But the Pros Are Skeptical


Wall Street got some good news from Citigroup and responded with a huge rally. But some investment pros are skeptical that the banking giant—or the market itself—had turned the corner.

"I've lost count of how many of these rallies we've seen over the last year and a half and I don't suspect we'll see anything different here," Mike Larson, analyst with Weiss Research, told CNBC.com. "Would I be chasing this? No."


CHASE WHAT? THE MARKET IS AT 6850. I WOULD NOT CALL BUYING IT HERE AS CHASING. At some point they will be chasing it. Is this the rally that goes? I don't know and will never figure that out. This is a process that will continue until one of these these rallies go. This one looks promising but if the traders chase it they will fail it again. How much is enough is is difficult to figure. But this is in my mind a bottom and the rally out of here will be a big one. Traders are definitely concerned about a pullback from any rally and that is what we need to have a sustainable rally. If we trade above about 7600 the shorts will start covering and this thing will feed on itself.

The whole premise of this decline is that the banks are in trouble. The biggest problem bank is supposed to be CITI. Well guess what the damn bank is making money. HELLO!!!!!!!!!!!!!

Citi is selling for 1.44 +.39 and nobody believes....Yet.

It is impossible to know which rally will go and spending your time trying to figure that out is a waste of time and when the rally comes you will miss it. Where we are now is way below the mean and big time oversold. The system is doing things to bring things back to normal. That will happen and I believe that will happen in 1 year. I believe that if I wait for things to return back to normal there is a big return.


Anyway an up day is for today fun and maybe just maybe this is the rally that goes. The beat goes on....Mikey
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