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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, May 8, 2009

Fibonacci .318 retracement is 8933 on DJIA and 953 on SPX

DJIA 8495 +86.34 SPX 917.30 VIX 32.43

The 200 day average of the SPX which is falling is at 954.52 and the DJIA is at 8995.57. You can see the convergence of the Fibonacci and the long term averages at this numbers. That would be my low end target numbers for the rally around 9000 on the DJIA and 953 on the SPX. That will be the next level that I would be selling


Selling 1/2 DIG 30.26 will sellout if it hits 34. Will sell all MS on next new high
Hoping for 28 on UYM to exit. DDM target 42 SSO target 35

PS Art Cashen is now turning bullish he likes the oil stocks. Cramer likes TECH, OIL, and Banks, yikes! He reccoed BA 2 days ago at 42. Look for him to be right for the next 2 weeks.


The ETF's I will buy for the downside are the DUG, SCO, DXD, SDS, QID, SKF, FXP, EEV

It is too early to take the short side now I am still 50% long and 50% cash.



Cramer bullish on WFC 26.89 and BAC 14.07 HE LIKES THE BANKS AND SAYS HOUSING MARKET BOTTOMING. This is the guy that said last November sell everything and stay out 5 years
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