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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

Thursday, May 14, 2009

Art Cashen ...Here come da correction.....Not yet Art

DJIA 8347 +63.08 VIX 31.88 -1.77 Oil 57.7 -.23 Gold 926.80+.90 Dollar Indx 82.51 -.11

This AM and the past 3 days in the morning call the interviewers have congratulated Art Cashen for calling the beginning of the correction. Like I said yesterday he has been calling for the correction since the March lows.
They are trying to re write history and give him credibility. As long as Art has credibility then we don't have a serious sell off. I still think we go sideways until we "breakout" to the upside....Then we get the correction Art is looking for and maybe a retest of the lows. The bulls are still too nervous and I think the shorts are coming back now. And Art well he will not be looking lower then...Mikey

Order to buy INTC @ 14.50 sell MTW @6.55
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