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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

Touts on CNBC are warming up to the market...But

DJIA 7930 VIX 41.08

Touts on CNBC are warming up to the market...But the public and the traders are still scared. How do I know? I don't hear any talk about the market going up and what should I buy or any talk about a stock going up. Second,the VIX is still above 40. Any VIX above 40 is a stinking buy. Third, the news is still bad. Lastly, the Bulls and the Bears are all looking for a pullback. Accordingly I am still a buyer and look to buy pullbacks. Looking at MON 77.94 on a downgrade here. I am think that everything goes to the 200 day. The retailers have already done it. Look at BBY JWN HD JCP LOW ..they are at the 200 day. By the way look at Morgan Stanley and Goldman Sacs...they are at the 200 day averages and almost all the way back to their Sept 08 breakdowns. I expect the market to get to the 200 day and above to its Sept 2008 breakdown.

It takes the public 2 to 3 months to figure out that something is happening. I think we have at least that long before I have to sell.The thing I like about the short term is that everyone is looking for a pullback and is afraid of the earnings that are coming up. To me it is the perfect situation for an up market.
The beat goes on .....Mikey
JAX...
This just in Gold Bugs...Gold back to 900.50 -8.40 GLL 2X short Gold is at 16.85

I buy it on a close lower than 900

Added to FNM @.70
Bought GLL @16.87 Gold closed at 897.60
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