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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, June 11, 2009

30 Treasury Auction goes well...Well Well

Treasury Prices Extend Gains After Strong 30-Year Auction

U.S. Treasury prices rose sharply Thursday in a rally fueled by a solid auction of 30-year debt, which assuaged some worries over the cost of financing the nation's rising budget deficit.

The $11 billion sale was the first reopening of a 30-year issue since the government announced in April that it was moving to monthly sales of long bonds. The sale appeared to benefit from a steep sell-off in recent days that cheapened up the market.

This week has also been the first test of the government's long-term borrowing ability since investors began to wonder last month whether the United States' prized AAA credit rating may be living on borrowed time.

A sloppy 10-year auction on Wednesday raised some concerns but the 30-year sale followed up strongly, leaving some fixed income investors heartened.

"The auction results were pretty decent," said Leonard Santow, managing director at Griggs & Santow in New York. "The long rates have backed up about 100 basis points in the last month or so. After that backing up you will draw in some lurking buyers who wanted to get issues on the cheap."

The 30-year long bond rallied in the final minutes before the sale to stand more than one full point higher in price on the day when the results were announced. It was last up 1-8/32, yielding 4.69 percent versus 4.78 percent at Wednesday's close.

The benchmark 10-year note was last up 28/32, yielding 3.84 percent, versus 3.96 percent on Wednesday.
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