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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

Friday, April 3, 2009

For the Record...The Employment numbers

When it comes to job losses in this recession, March may end up being the cruelest month.

“It almost can’t get any worse,” says economist David Jones of DMJ Advisors.

Friday's jobs report showed that a wide range of employers eliminated a total of 663,000 jobs last month, pushing the unemployment rate to 8.5 percent, the highest since late 1983.
Though the numbers were largely in line with forecasts, they provided fresh evidence of the toll the recession has inflicted on America's workers and companies.

Still, at this relatively late stage in the year-plus long recession, economists are looking past Friday's report and to brighter days.

“I don’t see how we can sustain job losses this severe, never mind intensify them,” says Ken Goldstein, who follows labor and consumer trends for The Conference Board. “I don't see why or how business can sustain it.”

Such thinking is evident in the unusually quick ascent in the jobless rate—from 4.4 percent in March 2007 to 8.5 percent in March. Economists expect a high of 9 to 9.5 percent this year. By comparison, during the 1973-1975 and 1980-1982 periods, the rate didn’t quite double (4.6-9.0 percent, 5.6-10.8 percent.)

By most, though not all, measures, this recession has been the hardest on the labor market in the post-WWII period.
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